Employee Layoff Checklist: Legal, HR, and Communication Steps for Employers
If you’re planning a layoff, use this checklist to ensure legal compliance and clear communication.
Employee Layoff Checklist (Legal, HR & Communication Steps)
1. Confirm the Business Need
☐ Document the financial or operational reason for the layoff
☐ Evaluate alternatives (reduced hours, hiring freeze, voluntary exits)
☐ Define whether the layoff is temporary or permanent
2. Review Federal & State Legal Requirements
☐ Determine if the WARN Act applies (company size, number of employees affected)
☐ Check state-specific mini-WARN laws
☐ Confirm final pay timing requirements
☐ Review unemployment insurance obligations
3. Identify Affected Positions (Not People)
☐ Select roles based on objective business criteria
☐ Ensure decisions are nondiscriminatory
☐ Document selection criteria
☐ Review decisions with HR or legal counsel
4. Prepare Required Documentation
☐ Written layoff notice or termination letter
☐ Final paycheck calculation
☐ Benefits continuation information (COBRA or state equivalent)
☐ Severance agreement (if offered)
☐ Return-of-property checklist
5. Plan the Employee Communication
☐ Decide who will deliver the message (manager + HR)
☐ Schedule private meetings
☐ Prepare a consistent script
☐ Train managers on compassionate delivery
☐ Anticipate employee questions
6. Conduct the Layoff Meeting
☐ Clearly explain the decision and timeline
☐ Avoid performance-based language
☐ Review final pay and benefits
☐ Provide written materials
☐ Allow time for questions
7. Handle Final Pay & Benefits Correctly
☐ Issue final paycheck on time (state law compliant)
☐ Include unused PTO if required
☐ Provide COBRA or benefits continuation notice
☐ Share unemployment filing instructions
8. Support Remaining Employees
☐ Communicate next steps to the team
☐ Address workload redistribution
☐ Reinforce company stability and direction
☐ Provide manager talking points
9. Maintain Compliance Records
☐ Keep layoff documentation on file
☐ Store selection criteria securely
☐ Record dates, notices, and acknowledgments
☐ Prepare for potential audits or claims
10. Review & Adjust Going Forward
☐ Evaluate what worked and what didn’t
☐ Update internal policies
☐ Plan for workforce recovery or restructuring
Employee Layoff Checklist (Quick Summary)
This employee layoff checklist outlines the legal, HR, and communication steps employers should follow when conducting a layoff. It includes compliance considerations such as WARN Act review, final pay requirements, benefits continuation, documentation, and best practices for communicating layoffs respectfully and legally.
FAQs About Employee Layoffs
What steps should employers take before laying off employees?
Before laying off employees, employers should clearly document the business reason for the layoff, review federal and state labor laws, determine whether the WARN Act applies, and establish objective criteria for selecting affected positions. Planning communication and preparing required paperwork in advance helps reduce legal and employee-relations risk.
Yes. A layoff is driven by business needs such as financial uncertainty, restructuring, or reduced demand—not employee performance. Termination is typically related to individual conduct or performance. Layoffs should never be communicated as performance-based decisions.
The federal WARN Act generally applies to employers with 100 or more employees, but some states have mini-WARN laws with lower thresholds. Even small businesses should review state-specific requirements before conducting a layoff to avoid compliance issues.
A layoff notice should clearly state the employee’s last day of work, whether the layoff is temporary or permanent, final pay details, benefits continuation options, and next steps such as how to apply for unemployment benefits.
Final paycheck timing varies by state. Some states require immediate payment upon separation, while others allow payment on the next scheduled payroll date. Employers should confirm state wage payment laws before finalizing the layoff timeline.
Severance pay is not required under federal law in most cases. However, many employers choose to offer severance to support affected employees and reduce legal risk, often in exchange for a signed release agreement.
Layoff conversations should be private, respectful, and direct. Managers should explain the business reason for the layoff, avoid assigning blame, review next steps, and provide written information to help employees understand their options.
Employers should retain documentation related to the layoff, including selection criteria, notices provided, final pay records, benefits communications, and any signed agreements. Proper recordkeeping helps protect the business if questions arise later.
Legal Disclaimer: This document is intended for informational purposes only and does not constitute legal information or advice. This information is provided in consultation with federal and state statutes and does not encompass other regulations that may exist, such as local ordinances and does not constitute legal advice.
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