Voluntary Layoffs

2626987 · May 2002

Our company is currently experiencing slow business.
We have had several employees take advantage of this
who have asked for 1 - 2 days off, without pay, from
work. We have had other employees ask for a week or two.
My boss and I have discussed the possibility of
offering a "temporary, voluntary layoff" to those employees
who would like to take some time off with no pay, and the
opportunity to return to work when business has picked up.
We have never used this practice before. What are the legal
remifications of a "voluntary layoff" if employees sign up
for such a benefit? How can we make this a "win-win" situation
for both employee and company?

Golf · May 2002

I don’t know of any legal ramifications you have to worry about. When you get the questionnaire from unemployment just indicate lack of work as the reason for layoff. It makes it easier on the employee if you can indicate a return to work date. That way they don’t have to look for other work.

To make it a real win situation for the employee, find a way to keep their health benefits going or at least pay they’re COBRA.

Jackie · May 2002

We have used Voluntary Layoffs regularly - even with Salary employees. For Salary employees, we require them to take off a full pay period (we get paid 2x per month) so that payroll runs smoothly. Our Salary employees usually don't want more than a month off.

In our Hourly group, we are required to ask all employees if they want Voluntary layoff before we can go to Involuntary layoff status.

In both cases, we allow employees to continue their insurance at their regular rate into the 2nd month off. We find Voluntary layoffs are better for plant morale than Involuntary. In the Hourly group, VLO prevents having to transfer employees back & forth between jobs too frequently, where we lose time retraining employees in jobs they would only hold for a few weeks.

In both groups, the big concern is the insurance coverge & job search requirements. We always advise Workforce Development that the layoff is short-term - they waive the job search requirement then.

jules2001 · May 2002

We have struggled with this occasionally also. On of the times that we needed to cut payroll hours, we simply made it mandatory that all employees cut their hours by 5-6 hours per week and we cut out all overtime. That meant that most employees only cut back about 1 hour per day. This was one way that we did not have to ask for volunteers and we did not have to find a way for management to choose who would get laid off. It did, however, require that the supervisors carefully manage thier hours.

One thing that I would recommend is to be very careful how you choose who is to get laid off, if you do not ask for or get enough volunteers. Be sure that whatever system you use, seniority, recent discpline action or your system that you use it for all employees across the board.

Voluntary Layoffs

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