Rehiring Laid-Off Employees
What are the legal implications?
Q: Several months ago, my company laid off a number of employees during a reduction in force. Can we rehire some of these former employees on a temporary basis to perform the jobs they were doing before the reduction? If so, what are the implications?
A: While the answers to these questions will, at least in part, depend on individual state law as well as on whether there is a collective bargaining agreement, some general principles apply. It is crucial for employers to understand that their policies and practices relating to both reductions in force (RIFs) and recalls are regulated by federal and state laws governing job discrimination and fair employment practices. Discrimination on the basis of race, color, religion, sex, national origin, age and/or disability is prohibited in layoffs and recalls.
If a previously laid-off employee believes an employer has discriminatorily recalled (or failed to recall) her, she can file a charge with the Equal Employment Opportunity Commission (EEOC). Employers should consider ways to minimize the potential for such claims, including but not limited to the following:
- Implement a policy on recalling employees. If a company decides to recall employees following a RIF, how these recalls are handled will depend on the company's policy. To try to avoid potential liability, any company policy regarding recalls must be reasonable and non-discriminatory on its face as well as in its application. Points that can be included in a policy to help accomplish this goal include:
1. Placing responsibility on the employee to contact the employer to express interest when vacancies occur. This keeps the employer from assuming the administrative burden and obligation to identify positions for which laid-off employees would be interested and qualified.
2. Putting a time limit on how long an employee will be entitled to preferential consideration for rehire. This will help avoid the argument from employees that the company was required to rehire them, on a preferential basis, indefinitely.
3. Specifying that the company retains the discretion to consider employees' skills and its business needs ahead of seniority in deciding who to recall. Oftentimes, the order of recall reverses the order of the layoffs. In other words, the last person to be laid off is the first person recalled. However, this policy may not always be practical. Therefore, retaining discretion is helpful. Of course, employers (and all personnel involved in the recall decision) must make certain that what it labels a "business need" is not merely a pretext for discriminatorily recalling some employees over others.
Whether the employer already has a policy or implements a new one, it should also be sure to train any and all personnel involved in the recall decisions on how to apply the policy in a non-discriminatory manner.
- Be specific about the terms and conditions of recall. Assuming the employer has legitimate, non-discriminatory reasons for determining who it recalls and under what conditions, and absent an agreement with the employee, there are no specific legal requirements as to what terms and conditions must be offered to a recalled employee. Rather, a company's needs will dictate what jobs become available and to what extent. The company's needs will also dictate what it is willing to pay and what benefits to offer. If an employer only has a temporary need, it should make this clear at the time of rehire.
Employers should keep in mind that when a former employee is recalled, whether on a temporary or non-temporary basis, the employer should make sure the employee fully understands the terms of the re-engagement. This is especially important if the terms and conditions of employment upon rehire are not the same as those under which the employee was working prior to his layoff.
Note: The information in this column is provided by the author, not Entrepreneur.com. All answers are general in nature, not legal advice and not warranted or guaranteed. Readers are cautioned not to rely on this information. Because laws change over time and in different jurisdictions, it is imperative that you consult an attorney in your area regarding legal matters and an accountant regarding tax matters.
Larry Rosenfeld is co-chair of the national labor and employment practice of the law firm Greenberg Traurig LLP. A frequent writer and lecturer on employment law topics, Rosenfeld is experienced in the areas of federal laws pertaining to employment issues, EEOC, ADA, termination matters, employment liability and the Fair Labor Standards Act.
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