Adopt A Layoff Policy Far In Advance
Posted by: John Gilliland
May 25, 2007

From the news, it seems like more layoffs are happening than a few years ago.  It's made me think back to the late 1990s when many home health agencies had to reduce to the size of their workforces to stay in business.   It was a sad time for the industry.  However, it did show how valuable a written layoff policy is.  Agencies that had written policies found the reduction in their workforces went smoothly. Those that did not have written policies experienced confusion and hard feelings. The time to develop a layoff policy is long before you think you will ever need one.  The worst time is when you are in the midst of having to reduce the size of your workforce.  If you have the policy in place before you need it, the layoff then simply becomes a matter of implementing that policy, and employees will be more accepting of how the layoff occurs than if you try to develop the policy in the heat of the moment. A good layoff policy should address several things:

• Short Term vs Long Term Layoff?  Do you want to distinguish between a short term layoff and a long term layoff?  Say, for one that is for 30 days or less verses one for more than 30 days?  Often, employers do want to make such a distinction with more formality given to the longer layoff. 

• Who Will Be Laid Off?  For each kind of layoff, establish how those who will be laid off will be selected.  It does not have to be by seniority, but you probably will want to use seniority for purposes of choosing between otherwise equally qualified employees.
  
  If you use seniority, is it seniority with your agency or in the job?  Often, I have found employers initially say "with our agency, of course" but, then, change their minds as they think about it, because they need to retain the employees who are most experienced in the job affected.

Also, are layoffs done agency wide?  Or, by job title or office? 

• Affect on Employment?  What is the affect on employment of being laid off?  You will find it easiest to say that employment ends upon being laid off as part of a long term layoff.  Typically, in a short term layoff, employment does not end because it is simply temporary for a short time.

• Use of Benefits?   If the layoff does not terminate the employee's employment, what is the situation concerning benefit continuation during the layoff?  Can the employee use paid time off to receive pay during the layoff?
  
  Remember the time to develop your agency's layoff policy is before you think you will need it. Take the time to do it now
  
  Sometimes, health care providers try to use a "low census" policy rather than a layoff.  I will talk about those next week.

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