Layoffs

A layoff used to be only a temporary suspension of employment, especially in factories when the cycles of demand were down. It has recently come to mean an actual permanent termination of employment, and, in today’s economy, is becoming more and more prevalent. It has become an incredibly negative term because of the amount of layoffs that are occurring, but it can often be a very good move for the business.

Businesses typically use layoffs to downsize in an effort to become more efficient when they are struggling financially. Layoffs typically result in the elimination of entire positions, not simply terminating the people who work in them. There are many terms being used now that essentially mean laying off employees, like “downsizing,” “rightsizing,” “workforce optimization,” or “reduction in force.”

When workers are laid off, depending on the exact jurisdiction, they are typically eligible for unemployment benefits. This is not the case if the worker leaves voluntarily or is terminated for misconduct.

If, however, in an effort to become more efficient and eliminate some positions, a company lays off a worker, that employee would be eligible for unemployment benefits. Most states have a statute that allows workers to recoup some of their losses by filing an unemployment claim after being laid off.

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If you have questions about business or employment law, contact the Austin employment attorneys of Melton & Kumler, LLP at 512-330-0017 today for guidance.