How much notice should you give employees when you do layoffs?

Martina Glorens Lead Copywriter bei MeMyselfAndI

September 19th, 2016

I am advising the founder of a company that needs to cut some costs in order to continue extending the runway. I wonder what is the standard notice that needs to be given to employees and how to do it in order to avoid issues.

John II Entrepreneur - Technologist - Software Architect. The Code Wookie is focused on helping people get the most out of tech.

September 19th, 2016

First, the founder should definitely consult an attorney familiar with HR law in the state for which the action will have jurisdiction as employment / labor law varies from state to state. I have (unfortunately) been involved in several such actions in a large company. In planning the action, the founder will need to ensure the layoff does not disproportionately impact a protected class based on race, gender, etc. (basically anybody but a white heterosexual male who is under 40 and has not disabilities).

The standard I have seen is to terminate immediately with two weeks of pay, remove all access to systems while the action is taking place, and have them pack personal belongings while being supervised, and escorted from the premises. No severance may be legally required but you have to balance the professional courtesy versus cash flow needs. The employee will be eligible for unemployment benefits, which will impact unemployment insurance rates in the long term. One nice thing may be to provide a letter of recommendation for each employee to help them in their job search or even contact recruiters and have a list of numbers / jobs for staff being separated.

But I don't recommend doing anything unless an attorney okays its.

Brad Craig Managment Consultant Vuzix

September 19th, 2016

Hi Martina: It's typically one week, per year. It really depends on how well you may want to award some employees, for past service, if your waiting until the next round of funding, and want to secure their loyalty than you'll need to payout higher pay, and maybe consider paying medical. Regards, Brad Craig Sent from my iPad