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Policy Changes to Make Before Laying Off Employees

By Stephanie Rabiner, Esq. on June 06, 2012 | Last updated on March 21, 2019

Though there are signs of an improving economy, layoffs continue to persist at an alarming rate. The pharmaceutical industry saw thousands of layoffs in 2011, and a number of companies have kept up the layoff trend in 2012.

If your company hasn't instituted layoffs, it might be time to prepare. With the Equal Employment Opportunity Commission cracking down and employee lawsuits on the rise, it's important that you review and make any of the following policy changes before laying off employees.

1. Institute performance reviews. It's wise to gather evidence before laying off employees and performance reviews are the best way to do this. Reviews should be regular, objective and contain factual narratives, according to Inside Counsel.

Be sure to provide employees with copies -- employees are less likely to sue if they have concrete examples of why they were laid off.

2. Equal employment training. As part of the review process, retrain all management-level employees on discrimination laws and policies. Most are aware of federal law, but state and local laws are broader. Some have also changed in the new year, such as those in California. Gender identity is officially a protected classification.

3. Evaluate severance agreements. Before laying off employees, determine whether you will offer severance packages and at what levels. Create a comprehensive policy that you can point to in times of dissension.

4. Reassess unemployment policies. Does your company have a history of challenging unemployment claims? Before laying off employees, also decide whether this policy should be put on hold. Doing so might dissuade litigation.

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