Lay Off Policy

We are a small non profit agency that is looking to lay off employees this summer if our grants do not come through this year with more money. We may have to close a classroom and eliminate some positions. My problem is the agency I worked for got caught up in a grievance issue this past year and had to rehire a terminated employee for not following proper policy and procedures. I was never included in this procedure from start to finish. Anyways, this employee was placed in another site to work since her original site would have nothing to do with her. The federal regulations only allow us to pay for 2 employees and we currently have three. I'm not so sure these regulations are true but the PD swears by it. So now we have to let one of these employees go and we have not developed any criteria to follow in determining how to lay off employees. Does anyone have a policy that I may follow? We would like to settle this before the school year begins in September. The jobs that appear to be affected are teachers and teachers aide. Any help will suffice! Sorry for the length!

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