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Employee Layoff and Recall Policy Template

Outline your company's layoff and recall policy for employees with this template.

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Employee Layoff and Recall Policy Template

Outline your company's layoff and recall policy for employees with this template.


Our Commitment During a Layoff or Recall

In the dynamic landscape of business, challenges and changes are inevitable. It's with a deep sense of responsibility and foresight that we introduce our Layoff and Recall Policy. 

The primary purpose of this policy is to provide a clear framework for situations where economic, structural, or operational adjustments necessitate workforce changes. Establishing such a policy underscores our unwavering commitment to fairness and transparency, ensuring that all decisions made are rooted in clear criteria, and not arbitrary or biased judgments.

As a business, we recognize the invaluable contributions of our team members and believe in treating everyone with respect and dignity. The policy serves as a testament to this ethos, providing clarity and predictability during uncertain times. By outlining our approach, we aim to reassure our employees that any difficult decisions will always be approached methodically, with care and in the best interests of both the individual and the collective. 

It's not just about adhering to regulations; it's about upholding our values, fostering trust, and ensuring our actions reflect our unwavering commitment to our team and our broader community.

Definitions of Important Terms

To eliminate ambiguity and ensure all employees have a precise understanding of this policy's parameters, here are some important terms you should know: 

  1. Layoff: A temporary or permanent separation from employment initiated by an employer due to reasons not related to an employee's performance or conduct. Common reasons include economic downturns, company restructuring, or changes in operational needs.
  2. Recall: The process by which employees who have been laid off are invited back to work once conditions allow. This could be due to improved economic conditions, restructuring completion, or the reopening of a business segment.
  3. Temporary Layoff: A temporary separation from employment with the expectation that the employee will be called back to their same or equivalent position within a specified time frame.
  4. Permanent Layoff: A final separation from employment with no expectation of being recalled. This often comes with severance packages and other conditions, as outlined in the policy or employment contracts.
  5. Seniority: The length of time an employee has worked for the company, often used as a criterion in determining order of layoffs and recalls. It helps to ensure that decisions are not arbitrary and are based on measurable, consistent standards.
  6. Severance: Compensation provided to employees upon permanent layoffs, which might include monetary pay, continuation of certain benefits, or other forms of compensation, as outlined in employment agreements or company policy.
  7. Outplacement services: Services provided by a company or third-party vendors to assist laid-off employees in finding new employment, which may include resume writing, interview training, and job placement.
  8. Cross-training: The process of training employees to perform tasks and duties outside of their regular responsibilities. This is especially relevant in the context of recalls, where returning employees might be required to assume slightly different roles or tasks due to organizational changes.
  9. Affected employees: Employees who are directly impacted by the layoff or recall policy, whether through being laid off or being considered for recall.

Implementing Layoffs

Layoff Selection Criteria

As a business committed to fairness, transparency, and the well-being of our employees, we approach the sensitive issue of layoffs with utmost diligence. The process, though challenging, is anchored in clearly defined criteria that ensure consistent and equitable decision-making. Here's a comprehensive outline of how we determine which employees face temporary or permanent layoffs:

  1. Operational needs: The primary factor is the operational requirements of the company. Departments or roles that have seen a reduction in workload or have been rendered redundant due to external business shifts will be considered first for layoffs.
  2. Performance metrics: While we recognize and appreciate the efforts of every team member, in situations necessitating layoffs, we may need to assess employees based on their performance evaluations. Consistently low performers — gauged through a combination of periodic reviews, productivity metrics, and feedback — might be more susceptible.
  3. Seniority: The time an employee has spent with the company may be a deciding factor. Typically, a last-in, first-out (LIFO) approach is applied, meaning newer employees might face layoffs before those with longer tenure. However, this is considered alongside other criteria and isn't solely determinative.
  4. Skill set and versatility: Employees who possess unique skills or have undergone cross-training to perform multiple roles provide added value. In tight situations, versatility can be an asset, making these individuals less likely candidates for layoffs.
  5. Economic considerations: For permanent layoffs, the financial implications of severance packages, benefits, and other compensations are factored in. Some roles may come with higher associated layoff costs which can influence decisions.
  6. Future business plans: Our vision for the company's future can also play a role. If we anticipate the resurgence or growth of certain sectors, roles pivotal to those plans may be retained.

It's important to note that the combination of these criteria provides a holistic picture. No single criterion determines a layoff decision; rather, a balanced assessment is carried out. We assure our employees that such decisions are never taken lightly and are always made with the broader interests of both the individual and the company in mind.

Communication and Timeline of the Layoff Process

In the unfortunate event that layoffs become necessary, we are committed to managing the process with the utmost care, transparency, and respect for all affected employees. Our approach is meticulously planned, ensuring that each step is conducted with compassion and empathy.

All notifications about layoffs will be conveyed in 1:1 meetings. Our managers and HR representatives are trained to approach these conversations with empathy, understanding, and clarity. During these meetings, employees will be informed of the reason for the layoff, their entitlements, and the support available to them.

In line with our commitment to transparency, we aim to provide affected employees with a notice period of at least 60 days before the layoff becomes effective, whenever possible. This heads-up is intended to offer employees ample time to make necessary arrangements and to avail the assistance we provide.

Affected employees will be introduced to the assistance programs we offer (details to be outlined later). This includes outplacement services, training opportunities, and counseling sessions.

On the concluding day, a final meeting will be held with each affected employee to ensure all administrative tasks are complete, and any remaining concerns are addressed. This is also when we'll provide them with any pertinent documents, such as service letters.

In this trying period, our dedication is not just to the continuation of business but to the well-being of every individual who has been a part of our journey. We aim for a process that, while difficult, remains dignified and respectful at every stage.

Rights and Obligations of Laid-off Employees

Navigating a layoff is challenging, both for the company and the affected employees. It's paramount that we provide clarity on the rights and obligations of those facing this transition. This ensures we both maintain mutual respect, trust, and understanding during the process.

Rights of Laid-off Employees:

  1. Severance: All employees are entitled to severance pay, as outlined in this policy.
  2. Final Pay: You have the right to receive any outstanding wages, overtime, bonuses, and unpaid leave accrued up to the date of separation.
  3. Benefits continuation: Depending on the conditions of your layoff and local laws, you may be entitled to continuation of certain benefits, like health insurance, for a specified period.
  4. Retirement benefits: Employees have the right to understand and access any vested retirement benefits.
  5. Unemployment benefits: Depending on local regulations, you may be eligible for unemployment compensation and will be provided with information on how to apply.
  6. Outplacement services: Employees are entitled to take advantage of any outplacement or job training services offered by the company.
  7. Service and recommendation letters: You have the right to request letters that outline your service and performance, which can be useful for future employment endeavors.

Obligations of Laid-off Employees:

  1. Return of property: Employees are obligated to return any company-owned materials, tools, equipment, or electronic devices upon or before their departure.
  2. Final Procedures: Employees should complete any administrative procedures, such as exit interviews or paperwork, as directed by HR.
  3. Update contact information: To facilitate any future communications, such as for final pay or tax documents, you should provide updated contact details if they change post-departure.

By understanding and respecting these rights and obligations, we ensure a smooth transition that upholds the dignity, respect, and mutual understanding that both the company and its team members deserve.

Eligibility for Severance and Benefits

In recognition of the dedication and hard work of our team members, our company has established a thorough severance and benefits plan to support those facing layoffs. We strive to provide assistance that reflects our gratitude and commitment to their well-being.

For Permanent Layoffs:

Severance pay:

  • Less than 1 year: 2 weeks of base pay.
  • 1-3 years: 1 month of base pay.
  • 3-5 years: 2 months of base pay.
  • 5 years and above: 3 months of base pay plus an additional week's pay for every year beyond 5 years.

Continued health benefits: Coverage for up to 3 months post-layoff or until the employee secures new employment, whichever comes first.

Retirement and pension plans: Employees will receive any vested benefits. We will also provide assistance in rolling over 401(k) or other plans to new providers if needed.

Outplacement services: Access to job counseling, resume workshops, and placement services for up to 3 months.

For Temporary Layoffs:

Partial pay: 50% of base pay for the first month of the layoff period.

Continued health benefits: Maintained throughout the layoff period, ensuring no gap in coverage.

Access to company resources: Use of company learning platforms, online libraries, and other resources to upgrade skills during the layoff period.

Guarantee of position: Assurance that employees will return to their same or a similar position at the end of the layoff period.

Notification of return: A minimum of 2 weeks' notice before the expected recall date.

We understand that layoffs, whether temporary or permanent, can be a period of uncertainty. Through this comprehensive severance and benefits plan, we aim to alleviate some of the concerns and hardships, reaffirming our respect and appreciation for each employee's contributions.

Assistance for Affected Employees

In our unwavering commitment to the well-being of our team members, especially during challenging periods of layoffs, we pledge to provide assistance that extends beyond financial compensation. Our goal is to facilitate a smoother transition, equipping affected employees with tools and resources to navigate their next steps with confidence. Here are the types of assistance we offer:

Outplacement services:

  • Job placement assistance: We collaborate with reputed outplacement agencies to help affected employees find suitable job opportunities, matching their skills and preferences.
  • Resume building and interview coaching: Specialized workshops will be organized, assisting employees in updating their resumes, optimizing LinkedIn profiles, and preparing for interviews. Personalized coaching sessions will enhance their chances of securing new roles.
  • Networking events: Regular networking seminars will be facilitated, giving employees the chance to connect with potential employers, industry peers, and recruitment specialists.

Emotional and mental health support:

  • Counseling services: Recognizing the emotional toll of layoffs, we provide access to professional counseling services. Employees can attend sessions to discuss their feelings, concerns, and anxieties in a confidential setting.
  • Mindfulness and stress-relief workshops: Periodic workshops focusing on mental well-being, meditation, and stress-relief techniques will be organized, helping employees maintain balance and perspective during the transition.

Skill development and training:

  • Online courses: Affected employees will be granted complimentary access to select online learning platforms, enabling them to upskill or explore new career avenues.
  • Certification sponsorships: For those interested in pursuing certifications in their respective fields or in new sectors, partial sponsorships will be provided, paving the way for broader career opportunities.
  • On-site workshops: Regular on-site training sessions on various trending industry topics will be hosted, ensuring employees stay updated and competitive in the job market.

By offering these diverse forms of assistance, we aim to stand by our employees, ensuring they feel supported, valued, and empowered even during the most challenging times.

Employee Recalls

Recall Criteria

In instances where business conditions improve and we find ourselves in a position to reinstate previously laid-off employees, our recall process is designed to be clear, fair, and systematic. Here's a concise outline of the recall criteria:

  1. Operational Necessity: The foremost factor driving recalls is the operational need of the company. Employees from departments or roles that are being revived or expanded will be prioritized for recall.
  2. Performance History: Previous performance evaluations play a significant role. Those with consistently strong performance records, demonstrated through periodic reviews and positive feedback, will be considered preferentially.
  3. Tenure with Company: Seniority is another crucial factor. All things being equal, those with a longer tenure may be given precedence in the recall process.
  4. Skill Set Relevance: As business needs evolve, the demand for certain skills may shift. Employees possessing the skills that align with our current requirements will be recalled first.
  5. Layoff Communication: At the time of the layoff, affected employees will be informed about the potential for future recalls. If they qualify based on the above criteria, they will be told to remain available for communication about potential reinstatement.

It's our commitment to ensure the recall process is executed transparently and gives a fair chance to all affected employees. By setting clear criteria, we aim to eliminate ambiguities and maintain trust with our dedicated team members.

Notification and Timeline

The process of recalling employees to work is approached with the same level of diligence, care, and transparency as during layoffs. Our aim is to provide ample clarity and allow smooth reintegration into the workforce.

Qualified employees will be contacted primarily via email, followed by a phone call. It is the employee’s responsibility to maintain contact to affirm their availability. This communication will provide details on the recall, including the expected date of return, any changes in roles or responsibilities, and updates on workplace policies if applicable.

Employees will be given five business days to confirm their intention to return. This allows you ample time to make personal and professional arrangements.

On the expected date of return, recalled employees will undergo a brief reorientation program, ensuring you are updated on any company changes and refreshed on organizational protocols. Then, you will officially return to your role, rejoining the team with a clear understanding of your responsibilities.

In the event that the company layoff lasts longer than six months, employees who are considered temporary layoffs will become permanently laid off and will become eligible for the severance and benefits package for permanently laid-off employees.

Declining a Recall

Recognizing that circumstances can change, and some employees may opt to not return post-layoff, we've established a clear process to decline a recall notice:

1. Prompt communication: If you choose not to accept the recall offer, please notify the HR department as soon as possible. This allows us to make timely adjustments and extend the opportunity to another eligible employee.

2. Formal notification: Provide a written declaration, either through email or a letter, stating your intention to decline the recall. This documentation ensures clarity and serves as a record for both you and us.

3. Opting out of the recall list: If, at any point, you decide you do not wish to be considered for recalls, communicate this explicitly to the HR department in writing. Please understand that once you opt out, you will be permanently removed from the recall list, and future opportunities for reinstatement with the company will not be extended.

4. Exit formalities: Even if declining a recall, any pending formalities or discussions from the layoff period should be completed to ensure a clean closure.

We respect each individual's decision and strive to maintain an open, understanding approach throughout the recall process, honoring each employee's choices and circumstances.


At our company, we view our employees not merely as resources, but as the invaluable pillars upon which our foundation stands and thrives. This layoff and recall policy demonstrates our commitment to transparency, fairness, and empathy, even amidst the most challenging business scenarios.

We understand that the journey through layoffs and potential recalls is laden with emotions, questions, and concerns. This policy is meticulously crafted to address these, providing clarity, guidance, and support at every juncture. Our goal is to foster an environment where, even in uncertainty, trust and mutual respect are unwavering.

Remember, while business landscapes may change, our core values and commitment to our workforce remain steadfast. In every policy, decision, and action, we strive to reflect the respect, gratitude, and admiration we have for the individuals who make our company the outstanding organization it is.

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