Making the decision about whether or not to reduce your workforce is important. Equally important is the decision of how you choose to administer the reduction in force. 

There are a number of considerations that can inform your approach to the reduction and determine the degree to which your company has specific legal liability. For example, will you rehire employees you’ve eliminated once economic conditions have improved? 

If so, your company should have in place a hire-back policy. Rehires can be valuable team members since they already know the industry and business and like the business enough to want to come back. Those are wins all around! 

When you must layoff groups of people you will want to ask if they are re-hireable. You’ll want that in their file and on a list that you can use as a reference when needing to fill positions once the company rebounds from whatever trouble they are currently in.

 The process you should follow, includes…

  • Checking your legal obligations

Consider your company policy, collective bargaining agreements, and anti-discrimination law. Your company lawyer can help you work through this process.

  • Weighing the pros and cons

The pros are that there is no training necessary, there will be improved morale to see a hire back after a downsize period, however, if the rehire takes a position that a current employee wanted there could be resentment. Are the circumstances different now that a rehire would make sense?

  • Rehiring the employee

This process should be the same as when you originally hired them, and how you would access anyone else applying for the position. Be very clear about expectations and terms and make an offer. You’ll want to have full communication with current employees as well. Be sure to monitor the rehire and how they reintegrate back into the company and their new role.

Small business Chronicle offers tips and warnings for this procedure, saying “ “Be aware of state laws, union pacts and collective bargaining agreements that may dictate who you should rehire. Do not pass over employees with more experience and seniority in favor of a less experienced employee who will work for less. Even if you can’t afford to pay a wage or salary more experienced employees to expect, offer them a position. They can turn it down and they won’t have grounds for a discrimination suit.”

According to Vault, “another issue that needs to be addressed is the benefits of the re-hired employees. Many, though certainly not all, companies allow rehired workers to retain their former benefits as if they had not left the company. This means that they will receive all of their accrued vacation time and have no waiting period for health insurance or retirement plans. Other companies may reduce the time of the probationary period before reinstatement.”

Introducing and documenting a comprehensive rehiring program can lessen the emotional blow of layoffs, support organizational morale, and help to ensure that the company’s valuable investment in training is not lost. 

 

Cynthia Measom, “How to Rehire a Laid-Off Employee” Small Business Chronical, https://smallbusiness.chron.com/rehire-laidoff-employee-39398.html

Clinton M. Sandvick, JD, PhD, “How to Rehire Employees You aid Off”
Wikihow, July 27, 2019 https://www.wikihow.com/Rehire-Employees-You-Laid-Off

Kindra, “What are the Legal Issues in Rehiring Laid-off Employees”
Vault, March 10, 2009 https://www.vault.com/blogs/workplace-issues/what-are-the-legal-issues-in-rehiring-laid-off-employees-ask-the-hr-guy