Layoffs Involve Some Strict Rules with a Bit of Employer Discretion

Due to a number of reasons, we are going to have to lay off a few employees. I have heard that there are certain rules to layoffs. What are those rules?

First, both California and federal law require advance notice of mass layoffs. These rules are strict, but again — this is in the event of a “mass” layoff, not the question posed above.

Second, if the company is unionized, the terms of the Collective Bargaining Agreement (CBA) apply, so any rules regulating layoffs in the CBA must be followed.

Next, some employees may have employment contracts that offer protections. Some employees have written employment agreements that guarantee continued employment for a certain period. If there is such a clause, it must be honored.

No Discrimination

Additionally, employers must not discriminate in layoffs. Even though employment in California is “at will,” meaning employees can quit or be fired for any reason as long as it’s not an illegal reason, employers must take care not to discriminate when choosing which employees will be subject to a layoff.

If all employees chosen are in a particular protected category, the employer should rethink their reasons for the layoff.

Nevertheless, employers have a certain amount of discretion in deciding whom to lay off. A common misconception is that there is a requirement of “last hired is first fired.” Certainly, employers can follow that policy, but this is not the law.

Layoffs can be a time for parting with poor performers, employees with chronic absenteeism that is not protected, employees with poor attitude, or simply individuals who aren’t working out.

No Promises

Whatever reason an employer uses to lay off staff, it is important not to make promises of re-employment down the road. Even if the employer does want to rehire an individual, things can change, and most companies don’t want to be boxed in to rehiring someone.

Last, laying off employees can be tricky, and employers may find it beneficial to consult an employment law professional before making the layoff decisions.

Column based on questions asked by callers on the Labor Law Helpline, a service to California Chamber of Commerce preferred and executive members. For expert explanations of labor laws and Cal/OSHA regulations, not legal counsel for specific situations, call (800) 348-2262 or submit your question at