Several companies in tech and other industries have undergone mass layoffs in recent months. While this is not the first time the US economy has faced mass layoffs, a new set of factors underlie current economic and hiring trends.
In this blog post, we’ll look at how companies navigated past layoff cycles successfully. We’ll also talk about how to protect your business when layoffs or reductions in staffing are necessary.
Create an objective, neutral process for layoffs.
To protect your business from legal action and preserve your reputation as a fair employer, never perform mass layoffs according to personal taste or whim. Rather, create an objective, neutral list of criteria for eliminating workers.
Focus on skills that are essential for the company to continue its business and grow once again as the economy recovers. Align the selection process with the company’s goals to ensure clarity and resilience through tough economic times.
Be aware of the effects of layoffs on protected classes.
When choosing criteria for layoffs, bear in mind that some criteria cannot legally be factored into decision-making. These include items like leave status, protected conduct like whistleblowing, and personal characteristics like race, color, ethnicity, national origin, religion, gender, age, disability, or veteran status. Your state may also have additional characteristics listed, like sexual orientation.
Even if a selection of criteria doesn’t explicitly mention any of these categories, it will require reevaluation if it disproportionately impacts certain groups. For instance, if you choose to perform layoffs based on seniority, check to make sure that doing so won’t eliminate a disproportionate number of people of color from your team.
Comply with federal and state law.
The federal Worker Adjustment and Retraining Notification (WARN) Act requires employers to give at least 60 days’ notice when conducting mass layoffs. Many states also have their own versions of the WARN Act, which may have slightly different requirements. Follow these requirements carefully to avoid legal complications during layoffs.