How to Effectively Lay Off Workers

Employers should be familiar with federal and state laws, regulations and resources prior to effecting a layoff. Laying off employees causes trauma to employees and their families, as well as employers and the staff responsible for processing layoffs. In circumstances where layoffs are inevitable, such as economic downturn, loss of business or inability to sustain payroll for all employees, employers should approach layoffs from a serious yet compassionate perspective. The impact of one layoff has the power to change the dynamics of the working relationship and your company's reputation.

Instructions

1. Obtain information regarding layoff procedures and rules from the U.S. Department of Labor and your state's labor department. If you are a private-sector employer with 100 or more employees, laying off half of the workforce, you must follow the guidelines and notifications provided within the Worker Readjustment and Training Notification Act. State government agencies and the Department of Labor work collaboratively to provide employers with support during layoffs.

   Support comes in the form of job counseling, guidance, training options, unemployment compensation matters and general advice to employees faced with the prospect of being unemployed for a lengthy period or indefinitely. The Worker Readjustment and Training Notification Act applicability has other conditions; therefore, it's an important read for employers planning to reduce staff.

2. Compose an all-staff speech about the state of the company, the developments that led to the decision to impose layoffs and how the decision was made concerning departments or certain work areas affected by the changes. Typically, employees don't want to listen to flowery, executive monologues that circumvent the real issues. Be direct, candid and straightforward with your employees. Avoid sugarcoating the news.

   Treat your employees with dignity and respect through honest and frank talk. When you are composing the company's address to employees, draft as many questions and answers as possible to prepare you for the numerous questions employees will ask after your announcement. Some employees may request one-on-one visits with members of the human resources staff to discuss their options, pay and remaining benefits. If your organization doesn't already have one, it's wise to implement an open-door policy after announcing a layoff.

3. Seek advice from your legal counsel on matters involving certain employees and their rights during layoffs. For example, the Older Workers Benefits Protection Act, the Age Discrimination in Employment Act and other laws and regulations the U.S. Equal Employment Opportunity Commission enforces must be consulted for preparing severance agreements for employees who are 40 years of age and older.

References

• Law.com; "Legal Times;" Furloughs May Be Smarter Than Layoffs; Eric Bellafronto, et. al.; March 2009
• U.S. Department of Labor: Rapid Response Services for Laid Off Workers
• U.S. Department of Labor: Worker Adjustment and Retraining Notification (WARN) Act; July 2003
• U.S. Equal Employee Opportunity Commission: Understanding Waivers of Discrimination Claims in Employee Severance Agreements; July 2009
• Business Insider: How To Lay Off Employees (And Not Get Sued); Nicholas Carson; November 2008
• NPR; Beyond "You're Fired:" How to Lay Off Workers; Wade Goodwyn; December 2008

Resources

• HR.com
• Society for Human Resource Management
• National Human Resources Association
• Workforce Management
• Society for Industrial and Organizational Psychology, Inc.