Layoff

Last Updated: January 2, 2019

Definition - What does Layoff mean?

A layoff refers to a loss or suspension of a person's job due to an action of management and without fault on the part of the individual. Layoffs may occur because an employer does not have enough tasks for workers to perform, as a result of budgetary constraints or due to equipment malfunctions or other infrastructure issues. Often a layoff is temporary and workers will be recalled when the employer's reason for calling the layoff is rectified. However, in some instances, a layoff may be permanent or indefinite, forcing an employee to seek new employment or sources of income.

WorkplaceTesting explains Layoff

A layoff is an involuntary separation from employment, but it is not the same as being fired. Layoffs occur due to a decision made by the employer that usually affects a group of employees. Some federal and state laws provide for specific limitations regarding the manner in which an employer can conduct layoffs. For example, pursuant to the federal Worker Adjustment and Retraining Notification (WARN) Act large employers may be required to provide notice before ordering layoffs. In addition, an employer may not use layoffs as a means to achieve a discriminatory act. Following a layoff, an employee may have certain rights including the right to collect contractually agreed severance payments and to continue his or her health insurance plan pursuant to the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) law.

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