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Factors to Keep in Mind When Rehiring Furloughed Employees

We are gearing up to restart our business soon. We furloughed several employees. Are there any concerns about rehiring? When we furloughed these people, we did not consider it a layoff because we knew we would be rehiring them soon.

First, many small businesses took advantage of the Paycheck Protection Program (PPP) loans, put into place by the Small Business Administration, to stay “afloat.” These loans will be forgiven if the borrower follows all the rules.

One requirement of that program is that the borrower (employer) must offer to rehire (for the same salary/wages and same number of hours) laid-off employees.

For purposes of loan forgiveness, the borrower must have made a good faith, written offer of rehire. However, if the employee rejects that offer, it must be documented by the borrower. Some employees prefer, for safety or other reasons, to remain at home and not to return to work.

Other Considerations

There are other factors to consider.

• If the business is unionized, the collective bargaining agreement should be reviewed. Wages, hours and working conditions are covered by such agreements, and possibly any concerns about rehiring employees who have been laid off for certain conditions. Those policies need to be reviewed to assure the employer is in compliance with the agreement.

• Also, an employer needs to review its own internal policies and practices. Many companies have specified written policies and/or practices on rehiring employees who have been laid off. If that is the case, the employer needs to be consistent with those practices.

Obviously, rehiring practices need to be nondiscriminatory. However, absent the circumstances noted above, there are no rehiring practices required by law. An employee who was, for example, on the cusp of being terminated when furloughed is not guaranteed re-employment.

It can be a good idea to review the furloughed employees’ disciplinary practices before deciding to re-employ them.

Safety Procedures

Lastly, it’s advisable to let the rehires know about various issues, such as exact dates to return, what might have changed (or not), and new safety procedures. Many business are highly regulated by such safety procedures, such as:

• Handwashing;

• Disinfection of surfaces;

• Continued social distancing;

• Staggered shifts;

• Other industry-specific requirements.

Remember, asking a furloughed employee to return to work is a positive thing. Just remember to follow the proper procedures and keep aware of any local requirements.


Column based on questions asked by callers on the Labor Law Helpline, a service to California Chamber of Commerce preferred and executive members. For expert explanations of labor laws and Cal/OSHA regulations, not legal counsel for specific situations, call (800) 348-2262 or submit your question at www.hrcalifornia.com.

Staff Contact: Dana Leisinger

Dana Leisinger

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