How to Conduct a Layoff, Furlough, or Recall Legally During the Coronavirus Crisis

View of conference room where HR leaders are considering how to conduct a layoff legally, during the coronavirus crisis.

We’ve entered a new phase of the coronavirus crisis. This month, some non-essential businesses have been allowed to reopen and are asking employees to return to the workplace, while others are planning for long-term work-from-home situations. Yet others have been put in the tough situation of turning furloughs into layoffs.

Many laws—quite a few of them created just in the last few months—apply to all of those decisions. And as an HR professional, you are tasked with staying abreast of them as you help your organization adapt to these fast-changing times.

To get answers for our HR community during this uncertain period, we spoke with Sabrina Shadi, attorney and partner at law firm BakerHostetler. Sabrina answered timely and pressing questions you may have about legal issues that you and your workforce may encounter during this next phase of the pandemic. More information is also available at the BakerHostetler COVID-19 resource page.

Below is a condensed version of the Q&A, edited for clarity.

Even before the coronavirus pandemic began, we already had many federal and state laws around furloughs and layoffs. Are there regulations HR professionals should be paying special attention to during these times?

A lot of the advice that we’ve been giving is to stick to those things that were best practices before, with regard to furloughs and layoffs. It’s easy, with all of the focus on the new laws around COVID, to think old rules don’t apply—but most of them do.

First, when selecting which employees will be affected, you have to make sure the choices don’t have an disparate impact on a protected group. Whenever we’re helping an organization plan for workforce reductions or reorganizations, we ask our clients to show us their employee census and list of impacted employees. Then we take a look at that and ask questions like, “Does this look fair and objective or does it look like we’re having a disparate impact on females or people in a protected category such as a racial or ethnic minority or employees who have taken protected leave?”

I think HR professionals and management need to know that, just because there’s COVID and many organizations are laying people off, it does not mean that rules against discrimination and retaliation go out the window. Later, someone can come back and say, ‘Okay, you ranked people based on performance, but were you using metrics or other standards that were backed up by meaningful historical documentation?’ Is someone going to easily be able to articulate a theory you just found COVID a convenient opportunity to terminate them for an impermissible reason?

If you get sued, your defense still has to be that you had a legitimate business reason for the choice that you made, as opposed to some discriminatory or retaliatory reason. In most cases, the employer will face the burden of being able to show that they had that legitimate business reason.

Are there new employment laws that have been prompted by the pandemic that HR professionals should be aware of?

There’s a whole host of them, from the local up all the way up to federal level. For example, when selecting which employees will be laid off, we now need to drill down to look at factors beyond all the things that we traditionally would have been looking at (e.g., gender, ethnicity, recent workers compensation claims). Now, we need to ask: Did the person take a leave under the Families First Coronavirus Response Act (FFCRA) or one of the state or local special leave provisions around coronavirus? Has this person made any safety-related complaints? Those questions are going to take on additional layers in terms of the scope of things that somebody may have complained about that could be protected activity, as well as the scope of leaves that someone could have taken that would be protected leaves during this time.

Things are more challenging for HR in this environment because there are some limitations placed on how much information you can ask an employee to provide if they’re asking you to take leave surrounding COVID. You can, of course, get them to tell you it’s related to a COVID purpose—childcare, taking care of a sick member of the household, for example. But unlike in other scenarios where you could require a doctor’s note or documentation from a child’s school, right now you are more limited in asking for those kinds of things.

In addition, some cities have passed laws related to recall rights. So, if you conducted furloughs or layoffs, but then end up calling some people back or doing some hiring in a period of time following the layoffs, your former employees may have some rights in terms of reinstatement. These laws are more rare, and some apply only to certain industries, but they’re looming out there. An HR professional would definitely need to check to see if any of those types of issues apply to their organization.

Related: Top 10 Legal HR Questions For Navigating Through and Out of The Coronavirus Crisis, Answered

What about companies that conducted furloughs a few months ago, who may now need to turn those furloughs into permanent layoffs? The federal Worker Adjustment and Retraining Notification (WARN) Act requires companies with 100 or more full-time employees to give 60-days notice before a layoff—unless the layoff is a temporary furlough that lasts six months or less due to an unforeseen circumstance. Do companies that furloughed employees without notice when the pandemic began now need to prepare layoff notices, to address that six-month mark?

Yes. We have helped a lot of clients do furlough notices in the past months, and with some of those, we are now updating them to be layoff notices. We’ve also had some employers anticipate that they are going to hit the six month mark for at least some people, and we’ve started working on the federal WARN notices for people who were furloughed early on but now are probably going to be laid off or furloughed for an extended time.

In addition to the federal WARN Act, we’ve got the state mini WARN Acts too. Employers who’ve made workforce changes really do need to keep an eye on forecasting, asking, “Where do we think we’re going to be 30, 60 and 90 days from now?”

It’s obviously a very difficult thing for people to be able to do. With every employer who asks us for advice, I ask: Where are you, what locations are you talking about and how many employees do you have for each location? These days, you have to drill down to the state level for WARN and to city and county levels for different job and benefit protections and leave rights. Also, who’s considered essential or not essential, who is required to stay home to work or allowed to leave—that’s different all over the place.

We’ve seen many headlines in recent weeks about employees who are reluctant to return to the workplace, or refusing to return outright, for a variety of reasons. What are employers allowed to do legally in a recall scenario if the employee will not return? What issues should HR professionals be keeping in mind in this regard, and what are best practices?

If you know that, as an organization, you are following all of the safety restrictions and that you’ve followed all of your state, local, federal guidance or requirements for being open, you can terminate an at-will employee who refuses to return for job abandonment.

But you’ve got to be sensitive to the special circumstances. Did this person take FFCRA leave? Did they take some other type of leave recently? Do I know that they have a disability which makes them part of a vulnerable population, and if so, is allowing that person to remain at home a reasonable accommodation? Are they an older worker for whom the risk of contracting coronavirus would be deemed a disparate impact?

Considering those questions, sometimes you want to look at an alternative to termination. You really have to talk to your people and explore the reasons. Is it just general fear? Or is it something that’s actually tied to a specific reason? Is the employee saying, “I don’t think that you are in compliance with CDC standards, OSHA standards, or city and county standards”? You have to drill down to figure out if the employee really has something that needs to be accommodated, to have a dialogue to get to the bottom of what their rights and your rights may be.

For employers who are specifically in the situation of furloughs potentially becoming layoffs, what should they be doing now from a legal standpoint?

Try to figure out the population of who’s going to be impacted, and the demographics of that population—not just age, gender, and race, but also their leaves of absence and other protected activities, looking back six months to a year. You really want to get clear on the criteria that you’re going to be using to select these people. Make sure that these criteria are as objective as possible, that they will be well supported, that they’re measurable.

Then, put it to the test. HR professionals, along with your managers, can start identifying people to be impacted based on the selected criteria. When you run your employee population through your criteria, you might realize they don’t get you to the right place in terms of what your organization needs. If that happens, you’ll need to change your criteria.

Certainly, if your company can afford counsel or has in-house counsel, work with counsel through this process. If you have decisions you might be making or analysis you might be performing that you might want to have privileged conversations around, you’ll need counsel. But there’s a lot you can do as an HR professional to help ensure layoffs are conducted legally. For example, if your organization doesn’t really do regular performance evaluations, you can come up with an evaluation tool to be able to rank people for layoff selection. You want to get a good start on putting those types of materials together to support the process and make sure they are useful and meaningful to your company’s decisionmakers.

Related: How to Lay Off an Employee, Plus: Virtual Layoffs

Are there legal issues around asking certain employees to return to the workplace while asking others to work from home? For example, a manufacturing company might need some of the line workers to return, but not necessarily need their sales force to return to the office. In other cases, employers may not be able to bring everyone back to the workplace simply because there isn’t adequate space for social distancing if the entire workforce returns. How can employers navigate these types of scenarios?

We need to look at these issues piece by piece. To start, employers have to guarantee a safe and healthy workplace for all employees, in compliance with whatever laws apply. And right now, many cities, states, counties, et cetera, that have orders allowing people to return to work still call for having anybody who can work from home continue to do so. So the presumption in many jurisdictions still is that if someone can stay at home, have them continue to work at home

The views expressed within this publication are those of the individual authors writing in their individual capacities only—not those of their respective employers. This publication is not intended to be and should not be construed as legal advice to any reader. All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed. The content on this posting is provided “as is” and no representations are made that the content is error-free.

INTOO Staff Writer

INTOO staff writers come from diverse backgrounds and have extensive experience writing about topics that matter to the HR and business communities, including outplacement, layoffs, career development, internal mobility, candidate experience, succession planning, talent acquisition, and more.

All author posts