Extract: As sections of the country open up for business, companies will have to decide how, when and who to rehire after furloughs and layoffs.
The coronavirus pandemic led many employers to reduce their staff to save money. The Paycheck Protection Program was created by the U.S. government to provide funds to small businesses for payroll costs, mortgage or rent payments and utilities expenses.
The PPP is a loan that can be fully forgiven if the employer can maintain or quickly rehire employees to the same level they had prior to the pandemic.
Here is some important information about rehiring that all HR professionals going through this process should know:
Differences between furloughed and laid off employees
Many employers needed to reduce their staff at the outset of the pandemic. They may have either furloughed employees or laid them off – and there’s a significant difference between the two, especially as companies bring workers back.
Furlough is a temporary leave. Recalling these employees is fairly easy, comprised simply of reactivating the payroll process for the people coming back, according to Law360.
A layoff, on the other hand, is a bit more complicated. Some laid off employees probably received severance packages. Employers might request that people returning to work after a layoff repay the compensation they received from the severance package.
What to know about discrimination
Deciding who to bring back and who to cut ties with is never an easy decision. In this situation, the potential for lawsuits makes it even more difficult.
It’s illegal for employers to make hiring decisions based on protected classes, including race, age, gender, religion and more. It should go without saying that you should not discriminate during the rehiring process.
However, there’s potential for employees to view your decisions to be unlawful, even if you have good intentions.
To avoid discrimination lawsuits, create a documented policy detailing your rehiring process, Richard D. Alaniz, an employment law expert, wrote for The Air Conditioning, Heating and Refrigeration NEWS. The policy should include:
- How you’ll decide who to bring back, noting that you will make decisions based on company needs and employee skills.
- Notice requirements, for both the company and the employee.
- How furlough will impact benefits such as vacation time.
- Time limit on recall rights, after which the recall expires.
- How to handle benefits payouts for workers not coming back.
You may be tempted to not recall workers who are more vulnerable to contracting the virus, such as older employees or those with disabilities. Even if you’re thinking of their health and safety first, deciding to not recall someone for these reasons is illegal.
Communicate with all furloughed employees
As you bring back certain workers, it’s important to maintain a line of communication with all furloughed employees awaiting news. Be as transparent with these people as you are with the employees you bring back early on.
Some companies may decide not to bring back certain employees after they’ve been laid off or furloughed. If this is the case, tell them so as soon as possible. Keeping important information such as this from them may create negative sentiments and could discourage them from searching for new employment.
When rehiring employees, make sure to follow all legal regulations to avoid potential lawsuits or fines. If you have questions, Payday HCM’s Human Resources Consulting Team can provide the support and guidance you need through the rehiring process.