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How to Draft an Airtight Layoff Letter

By Andrew Chow, Esq. on March 13, 2012 | Last updated on March 21, 2019

Laying off employees is never pleasant, but how you break the news can be just as important as the layoffs themselves. So what's the best way to draft a legal layoff letter?

First, keep your audience in mind. The employee you're laying off will want to know why, when, and how your company plans to implement layoffs.

Disgruntled employees who receive a layoff letter may also be looking for reasons to sue. That's why it's so important to draft a legally sound layoff letter.

In general, experts say your layoff letter should include:

Your reason for the layoffs.

Tell your employees what led you to decide on layoffs -- for example, tough economic times, a merger, or increased competition, TheHRSpecialist.com suggests. You don't have to go into too much detail, but giving no explanation probably won't stand up in court.

Your criteria for choosing which employees are laid off.

Laid-off employees who sue usually allege unfairness. That's why it's important to clearly explain your criteria in your legal layoff letter. Courts have held that companies can use an employee's length of employment and productivity as legitimate criteria for layoffs, TheHRSpecialist.com says.

But your criteria cannot rest upon characteristics like gender, religion, or national origin. Your layoff policy also cannot have the unintended effect of discriminating against minorities, women, or older workers.

The right tone.

The tone of your layoff letter needs to be professional but not impersonal, and definitely not condescending, TheHRSpecialist.com says. The website recommends telling your workers you appreciate their efforts without too much sugarcoating.

An explanation of severance packages and benefits.

Your legal layoff letter should clearly explain your company's severance and benefits packages, and your company's procedures for handling final paychecks. It's also a good idea to include contact information for Human Resources personnel, in case your employees have further questions.

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