Layoff and Recall Policy: What HR Needs to Know
July 13, 2018 by Josh Hrala
Layoffs are trying times for any organization going through them. No matter what the reason for the event, tensions run extremely high and HR is expected to manage the brunt of the work from notifying and meeting with those being let go to executing the paperwork and reports that happen behind the scenes.
Given that this event can be so taxing, the internet is awash with tips and tricks on how to hold a layoff meeting, how to send out a notification letter, and other aspects of layoffs that are known stressors for HR.
However, what about a recall policy? After all, layoffs are a temporary thing (on paper, anyway). How should your organization get some of those people to come back?
This area is shockingly unreported on. So, to help change all of that, we put together this brief guide that goes over what HR needs to know about layoff and recall policy to make sure your organization is prepared should you ever need to hold a layoff event.
Let’s get into it.
Layoff and Recall: The Basics
First, we need to discuss a simple, yet important distinction. Though many people look at a layoff as a permanent reduction event, the term layoff – on paper – means that employees may get recalled to work other roles or in other departments at the company.
A permanent reduction is a called a reduction in force (RIF), which sets the expectation that those being let go will not have a new role in the company if one becomes available.
While many HR experts understand this difference, it’s still important to mention it up top to make sure we’re all on the same page.
That being said, whenever you announce a layoff, you need to have a recall policy on paper should you want to recall employees who were originally let go.
“Layoffs that are expected to be temporary will generally be handled according to the provisions of this policy,” reports the Society for Human Resource Management (SHRM).
“Selections for layoffs that are known to be permanent will be made according to this policy and then handled according to company termination of employment and severance pay policies.”
Let’s dig into some details about what these policies typically look like. Again, and we say this in every article about reduction events, always check with your legal team before initiating any sort of RIF or layoff to make sure your policies and actions comply with all local, state, and federal laws.
Layoff Recall Policy: The Core Points
Your recall policy should explain that layoffs are generally seen as a temporary reduction and that your company may let individuals come back to work in new roles that they are suited for.
You need to also explain how employees will be selected for new roles and how HR will reach out to them. If your event becomes a permanent one, you will need to then follow your company’s severance and termination policies to ensure the event goes smoothly.
Basically, you need to explain – in clear language – how your recall will play out, how long employees should expect to wait to hear word, and what they should do if they want to be removed from the list.
Here’s everything you need to explain in the policy:
- What a layoff is
- How far in advance will employees be notified (check with your legal team)
- How employees are selected for recall
- How an employee’s tenure is calculated when factoring for seniority
- How long members of the recall list will remain on the list
- How an employee can remove themselves from the list
- How vacation, sick leave, etc will carry throughout the event
That seems like quite a bit of stuff! But, in reality, it’s not that hard to manage given the other stressful events that take place during a layoff event.
We’ve already covered what a layoff technically is and how far in advance employees need to know about the event. Now, let’s break these other points up into some simple categories for us to better understand:
How to Select Employees for a Recall
When you start looking at what employees might make for good recalls, you need to evaluate how they will fit into a new role and how their performance in that role can benefit the company. After all, if the person is unable to perform in a new role that might be slightly different than the one they just left, it doesn’t make financial sense to hire them back.
According to SHRM, there are for key aspects that should go into who is recalled and who isn’t:
- The employee’s ability to gain promotion (success) in the new role as well as their transferable skills
- How they performed in their old role
- The needs of the company, such as to fulfill project requirements, deadlines, etc
- How long the employee has worked at the organization (tenure)
In short, you need to make sure that those you recall can not only perform the new role but thrive in it. When you look at the pool of employees that you have let go, it’s important to keep that at the forefront of your mind while also taking into account their past performance, what your company needs to fulfill orders or make deadlines, and also how long the person has been with you.
If you use these four criteria to help nail down who you will recall, you’ll be able to recall the right people while not hurting your bottom line.
Explain How the Recall List Works
The other major aspect of recall policy that you need to hit is how the list actually works.
What do we mean by that?
Basically, you need to explain in your layoff recall policy that people will stay on the list for X amount of time. This could be six months, three months, a month – whatever you deem fit.
After that period of time, the reduction is permanent, meaning that those who were not recalled will not be. You should also explain how someone can opt out of the recall list themselves. For example, if someone immediately finds a new role, have them call in to the office to get removed from the list so HR and management knows that they are off the table.
If you do recall someone, make sure you send them a notice that they will receive. This seems like a weird thing to mention but it’s super important. If you don’t have the right address for your employee or they decided to travel during the layoff, you may have problems reaching them.
It’s always good to write down that the employee has a certain amount of time to respond to the recall notice, too. Typically, HR departments offer around seven days – a full week – to hear back from those who are recalled. If they don’t get back to you, they are removed from the recall list.
Here’s how SHRM puts it:
“Employees will be recalled according to the needs of [Company Name], their classification and their ability to perform the job. Notice of recall will be sent by registered mail, return receipt requested, to the current home address on record with the HR department. Unless an employee responds to the recall notice within seven days following receipt of the notice or its attempted delivery, the employee’s name will be removed from the recall list and the employee will no longer have any job rights with [Company Name].”
Recall Policy: How to Track Seniority and Tenure
During a recall, companies typically keep tracking employee tenure until the recall list is switched to a permanent reduction.
In other words, if someone is laid off and they have 30 months of experience at the company. The recall window is six months long. At the end of the recall window, that person will have 36 months of experience, or seniority, or tenure (or whatever you want to call it).
This is important because it can impact benefits if the employee is recalled. If that same employee was to be recalled and reinstated in a new role, you don’t want them to go from 30 months to zero, starting from scratch.
This part of the policy largely depends on how your organization works.
Despite this, layoff periods typically do not allow employees on the recall list to collect more vacation time or other time-based benefits like sick leave. Instead, if the layoff is expected to be longer than 30 days, the employee’s vacation time that they have accrued should be paid out to them when the layoff starts.
Layoff Recall Policy: The Final Say
We’ve covered quite a bit here about recall policies and how they work at a high-level.
The tips explained here are commonly used by HR experts, but it’s always important to make sure your policy works for your business. No two companies are exactly the same, so make sure that you are doing what your employees expect you to do.
Also, as a final reminder, make sure that you always consult with your legal team before, during, and after reduction events – even temporary ones – to ensure that you are complying with all local, state, and federal laws.
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