As economic uncertainty swirls, many employers have begun whispering one of the most dreaded words in the HR lexicon: layoffs. Even if you don’t believe you will have to eliminate jobs any time soon, it’s probably a good idea to start formulating preliminary layoff plans now so you can move quickly if the need arises.
According to Mark Zandi, chief economist at Moody’s Analytics, the Trump administration’s tariffs on goods from other countries will raise prices and lead to fewer jobs and a weaker economy during 2025.
While a recession isn’t certain, planning as if one could happen will make any eventual layoff go more smoothly. For example, if your company finds itself having to conduct a mass layoff, preparing now will help you comply with the federal Worker Adjustment and Retraining Notification Act and state mini-WARN laws. The laws require employers to give advance notice of any significant layoffs; some even require you to make severance payments.
The first step in preparing for a layoff is building a list of people and positions to be terminated. Here’s how to create a layoff list:
Base it on performance reviews. Whether you need to lay off 10 employees or hundreds, you will need a layoff list. Prepare it in a way that doesn’t discriminate. The best way to avoid bias is by basing job cuts on recent and up-to-date performance reviews that score each employee on a competitive scale based on objective, measurable performance metrics. Employees who scored lowest on your scale should be the first to be laid off.
Exclude illegal considerations. Check your list for employees who have taken any form of protected leave, such as FMLA leave, or time off as an ADA reasonable accommodation. It is illegal to base any adverse employment action on job-protected leave. Don’t count that time off against employees when arriving at their performance-review scores. For example, if you mark down an employee’s score because they missed their yearly sales quotas, you must have adjusted the goal to account for time missed for taking FMLA or disability-related leave.
Check your list for disparate impact. Depending on how you structure the layoff, it may have a disparate impact on members of a protected group. That could amount to illegal discrimination under Title VII of the Civil Rights Act and other federal and state laws. For example, if your layoff significantly or disproportionately causes job losses for employees over age 40, that disparate impact may trigger an age-discrimination lawsuit.
Recent case: Donna had been a nurse at the University of Pittsburgh Medical Center for more than 30 years when she was terminated for breaking numerous rules. She is diabetic and must eat regularly to maintain steady blood sugar levels. Otherwise, she experiences hypoglycemic episodes accompanied by irritability. She was allowed to take regular breaks and she only worked two 12-hour shifts and two eight-hour shifts instead of the standard three 12-hour shifts.
In 2011, Donna was suspended for violating patient confidentiality. In 2014, she was written up for pharmaceutical mistakes that could have endangered patients. Meanwhile, she was counseled repeatedly for being rude and hostile. She received a final warning.
Then, during one of her 12-hour shifts, Donna claimed she was too busy to eat and became “irritable and cranky” due to a hypoglycemic episode. She argued with a doctor and threatened to hurt co-workers. She was fired.
Donna sued, claiming her disability triggered the outbursts and therefore the hospital fired her because she was disabled. The court didn’t buy her excuses and tossed out her case. (Katz v. UPMC, 3rd Cir.)
But it’s not just open posts to X or other social media platforms that companies use that are a concern. So are the private-messaging parts of social media platforms like Facebook’s Messenger and Instagram’s Direct Message services, as well as the instant-messaging services cell phone users can access. Supervisors routinely respond to messages from employees about missing a specific shift due to illness or injury and about assignments and the like. Communication that used to take place over landlines or at a press conference now takes place over a long list of social media services.
What happens in the case of a lawsuit? You know that if sued, employers must preserve the evidence for potential use in litigation. That’s when the authenticity of these posts comes into question. Did the post originate from whom it purports to have derived? Can litigants gain access to the record showing when and who made the post? And most importantly, what happens if your organization destroyed the social media accounts or posts on those accounts?
Spoliation. Spoliation happens when an organization knows there’s a legal claim and its records may be relevant. If a worker was fired for breaking a call-off rule, he may claim he did communicate his anticipated absence by messaging his supervisor. If the employer can’t produce that evidence for the court because someone deleted it after the company knew there was a claim, that may be a case of spoliation. Essentially, it is destroying the evidence, and the court will generally instruct the jury that they can make a negative inference against the party that deleted the information. In this case, that might mean inferring that the employer’s stated reason that it fired the worker for not calling off was a pretext for discrimination.
Due diligence. To avoid spoliation, know how to preserve all forms of electronic communication, including that accomplished through social media platforms. Here’s how:
Tell managers or supervisors not to use their personal devices to communicate with employees. You don’t have control over whether they can delete information.
1. Excessive tardiness, unexcused absences. Accurate attendance records—listing dates and times—form the backbone of many decisions to discipline or terminate.
2. Incompetent job performance. Describe what the employee did or did not do, how that violated your rules or standards, and the consequences of the poor performance. Cite attempts you made to help the employee improve.
3. Failure to comply with policy or with established safety procedures. Specificity matters here, too. Detail the policy or procedure that was violated. Especially where safety violations are concerned, document that you counseled the employee.
4. Physical violence, verbal threats. Especially if your zero-tolerance policy requires termination, spell out exactly what happened.
5. Complaints of sexual harassment or discrimination. Documentation is critical here because these complaints so often turn into lawsuits. Include details of your follow-up investigation. Assume that your records will become evidence in court.
6. Proven instances of on-the-job alcohol or drug impairment. Explain why you believe the employee was under the influence. Document that you followed established protocols for alcohol or drug testing.
7. Positive performance. A file containing only negative comments can make it look like you had it in for the employee. Give credit when it’s due.
A: There are several definitions of compensatory time. One type refers to the idea of having nonexempt, hourly employees work more than 40 hours per week but receive future paid time off for those hours rather than having those hours be paid at time-and-a-half.
For example, an hourly worker might receive $10 per hour and regularly work 40 hours per week. If they work an additional 10 hours that week, they would ordinarily be paid $400 for the first 40 hours and then an additional $150 for the extra 10 hours (10 hours at $15 per hour). That’s what is required under the Fair Labor Standards Act.
If the employer were to pay just for the 40 regular hours and provide the employee a 15-hour credit towards future time off, the employer might believe it was legitimately providing comp time. There’s just one big problem with this arrangement: It is illegal under the FLSA for all but a specific set of employers—namely public employers. Even then, there are strict limits on how the arrangement is set up, how much comp time can accrue and when it must be paid out if not used.
There is another definition of comp time that applies to exempt employees who are not ordinarily entitled to overtime pay—in other words, exempt employees. Employers may provide them with comp time off if they choose, but they are not required to. Because exempt workers can be made to work as long and as hard as necessary to get their work done, they sometimes work more than 40 hours per week. Their employer is free to reward them for working long hours and can do so with comp time.
The employer then sets the rules defining when they will grant comp time and how they will calculate how much leave to provide. The terms are up to the employer since there is no legal requirement to provide comp time for exempt workers.
The most common approach is to focus on special events that require extra work, but not to regularly provide comp time whenever an exempt worker works more than eight hours per day or 40 hours per week.
Employers that don’t have a written exempt-employee comp-time policy and would like to implement one may want to consult their attorneys to draft one.
Re: Managing Difficult Situations
There’s no shortage of negative employee behaviors that can have an ill effect on the entire workplace. The problem is when the behavior is not so bad to warrant discipline or termination, but the manager must do something. And that something isn’t to drop the problem employee in HR’s lap!
Learn how to overcome some of the most griped-about employee behaviors with these tricks of the managerial trade.
Gripe #1: She thinks she’s too good to [fill in the blank] just because she’s an exceptional performer.
Manager actions: You need to set this employee straight. If you want her to complete the duties that she finds beneath her, then by all means tell her so.
Just so there’s no confusion, explain exactly what you expect her to do. In other words, don’t just tell her she has to start doing the “grunt” work; give her a bulleted list of the tasks you expect her to complete and the frequency with which she’s to complete them.
Remind her that the duties are part and parcel of the job and that success is not a get-out-of-grunt-work-free card. Express your confidence in her abilities to handle these duties while remaining a high performer.
Gripe #2: He constantly interrupts my conversations with other employees for no good reason.
Manager actions: There’s an art to putting someone off without making him feel put off, which requires being firm and polite. When his issue doesn’t warrant that you immediately stop what you’re doing and devote your attention to him, then boundaries need to be set. Explain why he must wait and when he will get his turn. Say something like: “Jane and I are just finishing up resolving a customer’s complaint. We’ll be done in 10 minutes. I’ll come down to your office then.”
People often interrupt due to an inflated sense of self-importance. The tactic described above ought to do the trick. But in situations where the individual is riddled with self-doubt and truly believes his issues require immediate attention, then take the extra step to allay his fears that waiting 10 minutes will not mean the end of the world.
Gripe #3: She gets her work done, but she always waits until the last minute to get started.
Manager actions: Point out the obvious—that she shouldn’t wait until the last minute in case she needs to drop everything in order to put out a fire. If pointing this out doesn’t case a change in her behavior, you need to work with her on prioritizing and scheduling her work. Establish a game plan ahead of time. Cut big projects into smaller assignments and set mini-deadlines for them.
Or, give her false deadlines. Nothing drastic, perhaps a day or two earlier than normal; just make sure she still has a reasonable amount of time to complete the task, but also enough time to handle anything that may pop up unexpectedly.
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Re: Employment Law–Basic Training
When you’re faced with an employee or applicant who may have a physical or mental disability, your legal antenna should go up right away. That’s because the complex Americans with Disabilities Act (ADA) gives qualified disabled people special rights in the workplace. Here’s what a manager needs to know about the ADA:
Who is protected?
The ADA covers more people than those who are deaf, blind or in wheelchairs. Technically, people are “disabled” under the ADA if they have a physical or mental impairment that “substantially limits one or more major life activities,” such as sleeping, standing or working.
Depending on the person’s condition, that can include ailments such as epilepsy, diabetes or arthritis, plus mental impairments, such as major depression and bipolar disorder. The ADA protects people with a history of such impairments, such as an employee whose cancer is in remission.
The law also says that if an employer treats a person as being disabled, then that person earns protection under the law, even if he or she wouldn’t otherwise qualify. That’s why, when faced with an employee or applicant who may be disabled, it’s important for managers to talk with HR about how to respond.
What are you required to do?
Employers must make sure that people with disabilities have equal access to jobs, compensation and promotions. The ADA also requires employers to prevent harassment because of a person’s disability. With limited exceptions, you must keep confidential any medical information about applicants or employees. If a person is “disabled” under the law, you must provide reasonable accommodations to assist that person.
Can you ask disabilities?
The ADA says employers can’t ask questions about a person’s disability during the application process. That includes direct questions about the impairment, questions about medications they take or questions about the person’s workers’ comp history.
You can, however, make business-based inquiries, such as:
• Whether they have the right experience, training and skills.
• Whether they can satisfy the job’s essential functions.
• How much time off the applicant took in past jobs (but not why).
After making a job offer, you can then ask any disability-related questions and conduct medical exams, as long as you do this for everyone in that same job category. You can’t pull back a job offer simply because you discover a person is disabled. That would be blatant discrimination.
You can, however, withdraw a job offer if it’s clear after the medical inquiry that
the person can’t perform the job’s essential functions with or without a “reasonable accommodation.”
Note: You don’t have to hire a disabled person who doesn’t have the appropriate skills and experience. But if the deciding factor is the disability, you must prove that the disability interferes with the job’s essential functions.
What's a 'reasonable' accommodation?
If an employee has a qualified disability, you must make “reasonable accommodations” to help him or her perform the job’s essential functions. Some examples:
• A diabetic employee may need regular breaks to eat properly and monitor blood levels.
• A person with a back problem may need a stiff-backed chair.
• A person with cancer may need leave to have radiation treatments.
When potentially disabled employees approach you with accommodation requests, they set in motion the ADA’s “interactive process.” It’s important to be able to identify such requests as possible ADA-covered requests and then alert HR. You should begin laying a paper trail now to show a good-faith effort to comply with the law.
Employers don’t have to go along with every accommodation request. Requests are unreasonable if they cause the organization an “undue hardship,” meaning it’s too difficult or too expensive to provide.
What if a disability threatens safety?
The ADA allows you to ask questions related to a disability and even require a medical exam if an employee’s medical condition appears to be causing performance or safety problems. You can also reject a job applicant (or terminate an employee) with a disability for safety reasons if the person poses a direct threat to others.
What about drug and alcohol use?
Current illegal use of drugs isn't protected by the ADA, so you don’t need to hire or retain someone who is using illegal drugs or fails a drug test. Also, employees who are found drinking on the job can be fired for company violations.
However, recovering alcoholics may be a different story; they could be covered under ADA protections. As a result, you may need to offer accommodations, such as allowing periodic calls to their AA sponsor or leave for meetings.
The ADA at a glance
The ADA prohibits private employers with 15 or more employees from discriminating against qualified people with disabilities during hiring, firing, promotions, pay and training. (Some state laws apply to smaller employers.) Specifically:
• You can’t ask about a person’s disability during hiring.
• Job offers can be conditional on a medical exam, as long as all applicants take the same exam.
• The ADA defines a disability as “a physical or mental impairment that substantially limits one or more major life activities.”
• Employers must make reasonable accommodations for the person’s disability unless doing so would create an “undue hardship” for the organization.
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Re: Employee Lawsuit Risks
Lawsuits by employees against their employers have grown tremendously in the past decade. Sometimes those lawsuits have merit, sometimes they don’t. But either way, those lawsuits cost time and money to fight—money that is better spent on product development, training and raises.
Even worse, some laws—including federal overtime law and the FMLA—allow employees to sue their supervisors directly, meaning a manager’s personal bank account could be at stake.
Most lawsuits are not triggered by great injustices. Instead, simple management mistakes and perceived slights start the snowball of discontent rolling downhill toward the courtroom.
Here are 12 of the biggest manager mistakes that harm an organization’s credibility in court. Use these points as a checklist to shore up your personal employment law defense:
1. Sloppy documentation
Most discrimination cases aren’t won with “smoking gun” evidence. They’re proved circumstantially, often through documents or statements made by managers. Documents, particularly email, can help the employee show discriminatory intent.
The lesson: Always speak and write as if your comments will be held up to a jury someday.
2. Not knowing policies, procedures
Courts expect supervisors to know their organization’s policies and procedures. If a manager admits ignorance, legal experts say juries typically view that as purposeful, not forgetfulness.
That’s why it’s vital to make sure you understand company policies. Don’t make decisions based on a vague memory of a policy. Double-check it or check with HR before taking action.
3. Inflated appraisals
Performance reviews are one of the most important forms of documentation, yet managers sometimes inflate the ratings for various reasons. If a manager later tries to cite “poor performance” for that same person’s termination or demotion, those overly positive appraisals create a heap of credibility concerns.
Be direct, honest and consistent.
4. Shrugging off complaints
Turning a blind eye to any employee’s complaints of unfairness or perceived illegal actions is a guaranteed credibility buster. Comments like “I’m not a babysitter” or “Boys will be boys” will hurt employee morale and jeopardize your standing in court.
5. Interview errors
It may be easy to answer the question: “Why did you hire that person?” But managers often run into trouble when they have to answer: “Why did you reject certain other candidates?”
That’s because rejection decisions typically aren’t well-documented and the decisionmaker may not recall the reasons later.
During interviews, avoid any question that doesn’t focus on this central issue: How well would this person perform the job he or she has applied for? Never ask about age, race, marital status, children, day care plans, religion, health status or political affiliation.
6. Changing your story
If an organization changes its reasoning for making an adverse employment decision (firing, discipline, demotion, etc.) midstream, its credibility is shot.
Be straight with employees from the start about reasons for discipline. Don’t sugarcoat your comments.
7. ‘Papering’ an employee’s file
Most managers hear the mantra, “Document, document, document.” But it’s possible to overdocument, especially when it occurs right before a firing. Courts will be able to see through a rush of disciplinary actions cited in the days before termination.
Be consistent in documenting negative and positive performance and employee behavior. It’s best to keep a “performance log” for each employee, regularly making notes in each file.
8. Being rude, mean-spirited
An organization can have the best case in the world, but if the key supervisor comes across as rude, insensitive and mean, the attorney’s job of selling the case to the jury will be much harder.
Use the golden rule in handling staff.
9. Careless statements to feds
When responding to charges filed with the EEOC or state agencies, employers often have to submit position statements. Managers may be called upon to help provide some of that information. You can bet the employee’s attorney will review these statements, particularly affidavits, and introduce them at trial, especially if your story has changed. Keep your story consistent.
10. Lack of legal knowledge
Juries will expect—and the plaintiff’s lawyer will encourage them to expect—that employers stay abreast of developments in employment law. Refresh yourself regularly on your organization’s policies, read communications sent from HR and, when in doubt, ask questions.
11. Dictating accommodations
Under federal law, employers must make “reasonable” workplace changes to accommodate an employee’s disability. How do you choose those accommodations? The law says it must be a give-and-take process to reach a solution. Managers too often try to dictate the solution.
12. Firing employees too fast
Managers who fire without first trying to improve the worker’s performance will appear insensitive and potentially discriminatory in court. Conversely, managers who try to improve things before resorting to firing will stand a better chance of avoiding a lawsuit.
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