Layoff checklist for HR

This list follows the order the work usually falls in, from the first count of who is affected to the weeks after people leave. It also serves as a reduction in force checklist: the steps are the same under either name.

Settle the plan

• Name one person who owns this whole list, even if legal, finance, and HR each own parts of it.
• Write down why the layoff is happening, in two or three plain sentences. Everyone who delivers the news will need the same answer.
• Ask whether fewer hours, a hiring freeze, or a voluntary exit would meet the need.
• Bring in your employment lawyer now, before any names are chosen.
• Read any union contract, employment agreements, and your handbook for layoff terms.

Check the notice rules

• Count your employees. The federal WARN rule generally covers an employer in either of two cases: 100 or more employees, not counting part-time employees, or 100 or more employees, counting part-time employees, who together work at least 4,000 hours a week.
• Know who counts as part-time. Under the federal rule, it is someone who averages fewer than 20 hours a week, or who has been employed for fewer than 6 of the last 12 months.
• Test the numbers for each site. Federal notice generally applies to a plant closing with 50 or more job losses at one site in a 30-day period. It also applies to a mass layoff at one site of at least 50 employees who are at least 33 percent of the active employees there, not counting part-time employees. A layoff of 500 or more at one site counts whatever the percentage.
• Look at the whole period. Add up job losses 30 days back and 30 days ahead of any date. Smaller groups are added up the same way over 90 days, unless they have separate causes.
• Count deep hour cuts too. The federal rule treats a cut of more than 50% in an employee's hours, in each month of a 6-month period, as a job loss. So does a layoff longer than 6 months.
• If the rule applies, plan for at least 60 calendar days of notice before the first person leaves.
• Check your state. Several set lower thresholds or longer notice, and the state WARN guide gives the rules we have read, with sources.
• Ask your lawyer before relying on any exception that shortens the notice. The rule puts the burden of proof on the employer.

Choose who is affected

• Write the selection criteria before anyone writes a name.
• Apply the criteria the same way across every team.
• Ask your lawyer to review the results for any pattern by age, race, sex, or another protected group.
• Flag anyone on leave and ask your lawyer about each one. Washington, for one, generally does not let an employer include someone on paid family or medical leave in a mass layoff.

Prepare what each person will receive

• Write the notice. Our layoff letter template follows the federal list of what an employee notice must say.
• Decide on severance, if any, and put the terms in writing.
• If severance comes with a signed release, have a lawyer draft it. The EEOC's guide says a release of age discrimination claims from an employee age 40 or over must allow at least 21 days to consider it. In a group layoff the minimum is 45 days, and the employer must give added written information.
• Set the final pay date. Federal law does not require an immediate final paycheck, but some states do.
• Confirm when health coverage ends and who sends the COBRA notice, which tells people how to continue their health coverage. COBRA generally applies to group health plans of employers with 20 or more employees in the prior year.
• Decide what happens with unused paid time off, bonuses, commissions, and company equipment. Ask your lawyer where state law sets the answer.
• Put the answers on one page: last day, final pay, benefits, who to call, and how to file for unemployment.

Prepare the people who deliver the news

• Give each manager a short script and walk through it with them.
• Decide who speaks to each person, where, and in what order.
• Hold each talk in a private room or a private video call, never in a group email.
• Plan when system access changes, so nobody finds out from a locked screen.
• Write the message for the people who stay, and decide who answers customers and reporters.

Send the required notices

• Under the federal rule, notice goes to affected employees or their union representative, your state's dislocated worker unit, and the chief elected official of the local government. Some states add more names.
• Use a delivery method designed to reach people at least 60 days ahead: first class mail, personal delivery, or the pay envelope.
• A notice written for this layoff can go in the pay envelope. A standing preprinted notice that goes in every paycheck is not acceptable, and neither is a bulletin board post.
• Call your state's Rapid Response team, which coordinates services for affected workers. The Department of Labor says the sooner they start, the better.

On the day

• Tell the people affected first, before any wider message.
• Keep each talk short and clear: what is happening, the last day, pay, benefits, and who to call.
• Hand over the written notice and the one-page summary. Few people keep the details from a hard conversation.
• Leave time for questions, and let people collect their things and say goodbye.
• Tell the people who stay the same day.

The weeks after

• Answer questions about pay, benefits, and unemployment quickly.
• Tell people what you will say when a future employer calls for a reference.
• If dates move, send more notice. Under the federal rule, a delay of less than 60 days needs added notice as soon as possible, and a delay of 60 days or more needs a new notice.
• Keep the criteria, notices, and proof of delivery together, and ask your lawyer how long to hold them.
• Check in with the managers and the team who stayed.