Layoffs versus Firing

March 1, 2005

One of my partners decided to move out of state. Rather than replace him, we're just going to run a smaller practice. Because of this reduction, we are going to lay off a full-time employee. I'm very familiar with firing an employee, but want to know how laying off an employee differs from firing.

Question: One of my partners decided to move out of state. Rather than replace him, we're just going to run a smaller practice. Because of this reduction, we are going to lay off a full-time employee. I'm very familiar with firing an employee, but want to know how laying off an employee differs from firing.

Answer: Conducting a layoff is very similar to a termination. However, if the layoff is due to "lack of work," the employee is eligible for unemployment insurance and benefits continuation as a terminated employee. Be sure to provide the employee a letter explaining the reason for the separation - "lack of work" - and the details of the severance package (if any).