We're planning a layoff. What are the issues we should consider?

Employers must be cautious about laying off an employee who is on a protected leave of absence in light of a claims of discrimination or retaliation. You may consider employees on a protected type of leave for layoff however, you should use objective criteria for determining which employees will be included in the layoff. You should not choose to lay off only those employees who are already on a leave of absence. Certain California laws restrict laying off some janitorial and building service personnel, grocery workers and other displaced workers.

Dismissal Criteria

Criteria you may use for determining layoffs include:

  • Seniority
  • Job duties
  • Department
  • Performance

Seniority, although not required to be used as the basis, is the least problematic as the most junior employee would be effected by layoff irrespective of whether or not that employee was on a leave.

Employers cannot use salary alone as a basis for a layoff decision, because it usually will result in discrimination on the basis of age (over 40).

Required Action

If you are going to make a layoff decision on the basis of job performance, it should be well-documented, and employees should be aware of any performance deficiencies. All employees who will be laid off, including those on a leave of absence, should receive any required advance notices if applicable under the WARN Act (state or federal in the case of a mass layoff or plant closing).

An employer should provide all employees with the same information about the layoff at the same time giving as much advance notice as possible.

To minimize the risk of discrimination claims and litigation it is recommended that employers consult with legal counsel before making final lay off decisions.

You can find more information on Layoffs and Mass Layoffs and Plant Closings in the HR Library.