Laid-off employee contracts in a post-COVID world

Things are looking up for Ohio businesses and employers. People are getting vaccinated, businesses are reopening and expanding staff, and employees who were furloughed or laid off are coming back to work. This is good news; however, employers who seek to bring back furloughed or laid-off employees must be mindful of how to do so properly to avoid legal pitfalls.

As employers navigate rebuilding their workforces quickly and safely, there are many legalities to keep in mind. Furloughed employees are on an unpaid leave of absence but remain employees and receive benefits such as health care. Layoffs end the employment relationship. Some employers furloughed employees instead of severing ties during the pandemic because of the uncertain duration of closures and because it had taken years to secure a talented workforce in a tight labor market.

When bringing back furloughed employees, the decision cannot be discriminative. For example, employers cannot choose to bring back younger workers and keep older workers on furlough. Rather, employees should be brought back based on job function, skills and performance, and these criteria should be clearly defined and documented. It is also important to follow established policies and collective bargaining agreements.

Another consideration is whether to do background checks and drug test employees before their return. An employer’s ability to conduct these screenings may be prohibited or limited by federal, state and local laws. However, if an employer opts to conduct rescreening, clear policies need to be set regarding the parameters. Policies should include consideration of the length of time the individual was away from the workplace, and the role individual’s role. For example, it may be prudent to rescreen those who were away for six months or more and forgo rescreening those away for weeks. Either way, clear and uniformly applied policies are important to establish and follow.

Reaching out to furloughed employees should be treated as an offer of re-employment that will either be accepted or rejected. The communication asking furloughed employees to return to work will supersede any prior employment terms, so be clear regarding terms, job responsibilities, salary, hours and how a return will affect seniority and accrued benefits.

Some may have found employment elsewhere and may not wish to return. If a furloughed employee chooses not to return, employment can be terminated.

When bringing back laid-off employees, a business cannot discriminate, and decisions should be based upon legitimate business needs to avoid disparate treatment of those being brought back. Rehiring laid-off workers creates a new employment relationship, and all employment terms should be spelled out, particularly changes in schedules or compensation and benefits. All employment documents, contracts and acknowledgments should be signed anew.

It is also important to distribute the most recent employee handbook and have employees sign new acknowledgment forms reflecting that they received the most recent handbook. All employees returning to work after being laid off are subject to the employer’s policies regarding background checks and drug testing. Employers should also document any refusals by laid-off workers to return to work and should notify the Ohio Department of Jobs and Family Services if the individual is still receiving unemployment compensation.

COVID-19 and its effect on businesses are not in the rear view mirror, but many employers are looking forward to reopening and rebuilding their workforce.

Elizabeth Weeden is lead attorney at Perez & Morris LLC.