Employee Offboarding

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Employee Offboarding

Involuntary Terminations

Reductions in Force and Layoffs
Reductions in Force and Layoffs

A reduction in force (RIF) occurs when positions are eliminated without the intention of replacing them.

A layoff is when a position is eliminated (either temporarily, or eventually permanently) due to lack of work available.

Sometimes, a company will conduct a reduction in force or layoffs for a group of employees at the same time, an extremely difficult decision which requires a coordinated effort between many different stakeholders, from HR to the CEO.

Often, the planning process for a group RIF or layoff will begin weeks prior to the actual termination date. It is ideal for the internal decision-maker, such as the CEO, to work in lock-step with HR and Legal, as there are a multitude of details to coordinate when separating from a group of employees at the same time. The entire process should be handled with care and intention to deliver the best possible outcome for both the employees and company.

The below section outlines the tactical aspects of conducting a layoff or RIF once the decision has been made to do so; there is much to consider philosophically and strategically at the leadership level and throughout the company before making the decision to pursue such actions.

Tip: Leadership and HR should always engage employment counsel in this situation as there are additional compliance requirements when conducting a group layoff.

Some questions to consider early on in the planning process:

How many employees will be impacted?

Note: The WARN Act requires that employers of over 75 employees provide 60 days notice if terminated 50 or more employees within a 30 day window. Read more about WARN act requirements

here⁠

How are the impacted employees being selected?

Note: Review the impacted employees to ensure that there is no adverse (disparate) impact to a protected class (a certain race, color, ethnicity, national origin, religion, gender, genetic information, age (40 or over), those with a disability or veterans). If it is determined that the layoff or RIF has an adverse impact on a protected class, that decision will need to be further evaluated and substantiated.

Who needs to be involved in the selection process (manager, department head, etc.)?

Will you offer a severance package to impacted employees? (Strongly recommended)

If severance if being offered, how will you determine what each employee receives (tip: do this in a clear, logical manner, such as basing severance amount on tenure)?

What will the communication process look like?

When will employees be notified? When will leadership be notified? When will the larger company be notified? What will the medium and content be?

Will you offer outplacement services?

Who will prepare the exit paperwork?

Who will participate in the exit meetings?

Once these questions are answered, create a detailed project plan with each step of the process, assignees, dates and dependencies to keep your team aligned.

⁠

What elements are different in a RIF or Layoff?

When an employee is terminated as a part of a RIF or layoff, it is an involuntary termination. For that reason, it shares many of the same steps and elements as the standard

involuntary termination process⁠

. There are, however, some key differences that we’ve outlined below.

Communications

Well-thought out communications are a critical component of a RIF or layoff, and a communications plan should be created from the outset of the process. Here is a

sample communications outline⁠

that you can customize.

Below are some points to keep in mind when drafting messaging for the company. HR should partner closely at the executive level to craft communications.

Take accountability at the CEO level

Recognize the circumstances with empathy ("hug the elephant in the room")

Communicate the why, as much as it makes sense to do so, and convey a consistent message to terminating employees and remaining employees (as the two groups will undoubtedly talk)

Summarize the plan forward → re-establish how the company will be more successful moving forward

Address concerns about future layoffs, if possible

Knowledge Transfer

Similarly to any other involuntary exit, a manager will likely not be able to include the employee in the

knowledge transfer process⁠

Offboarding Coordination

⁠

Offboarding Coordination⁠

will include coordinating with your Legal, Benefits, Payroll, and IT teams (as outlined

here⁠

), however HR may want to involve additional resources if multiple employees are exiting simultaneously — to help ensure that access is cut off at the appropriate time, that employees are able to be escorted out, and that paperwork is sent timely.

Talking Points for the Termination Meeting

Review the

Talking Points for Managers - RIF⁠

document.

Exit Meeting

HR and the manager should conduct an individual exit meeting with each employee. While it may be tempting to meet with all affected employees at once, each individual employee may react differently, have their own personal questions, or want to hear the message directly from their manager. Individual meetings allow the time and space for this to happen.

Because news travels fast, you’ll want to schedule each exit meeting as close together as possible, so everyone is generally receiving the news around the same time. Otherwise, the exit meeting will generally run the same as outlined

here⁠

Offboarding Compliance

RIFs or layoffs may have additional compliance components. If you’re offering Separation Agreement and Releases, there are different signing requirements for employees over 40, as outlined by the Older Workers Benefits Protection Act (OWBPA):

If you are laying off two or more employees over the age of 40, the consideration to sign period increases from 21 days to 45 days (and still includes a 7-day revocable period).

Employers must also include an additional attachment to the Separation Agreement and Release, outlining the “decisional unit” — the job titles and ages of employees in the decisional unit eligible for or selected for the “program,” as well as the job titles and ages of employees not eligible for or selected for the program (

SHRM⁠

Your employment counsel can guide you on putting these additional materials together

You’ll still need to send all of the regular paperwork outlined in the

involuntary termination process⁠

⁠