Layoff and Unemployment Checklist for Employers

Laying off an employee is never easy, and what comes next can be just as complex. The unemployment process often raises questions for both employers and employees, especially when terms like “furlough” or “recall rights” get used interchangeably with layoff.

But no matter how the separation is labeled, if an employee is no longer working or being paid, she or he may be eligible for unemployment benefits. To reduce legal risk and support a smoother transition, employers need more than good intentions. A thoughtful layoff process, with clear documentation, consistent messaging, and careful planning, is essential for compliance and fairness.

One other important factor is delivering a consistent message to reduce the chance of discriminatory or otherwise inappropriate comments being made during the layoff meeting. Involving fewer people lowers the chance of missteps. Ideally, HR and a senior leader should conduct the meeting. Employers should prepare a script in advance outlining what will be said and which documents will be provided.

Unemployment checklist

1. Review and document business justification for the layoff

• Clearly document the reason for the layoff (e.g., restructuring, cost-cutting, reorganization, closure).
• Ensure the decision is based on business needs and not discriminatory. Keep in mind that a layoff of one person may raise questions about discriminatory intent.

2. Check employment agreements and company policies

• Review the employee’s contract (if applicable), offer letter, and your employee handbook for any termination clauses or severance obligations. For example, does the contract or handbook provide for any formalized recall process from a layoff?

3. Comply with advance-notice laws

• Massachusetts law does not require any advance notice of separation from employment.
• The federal Worker Adjustment and Retraining Notification (WARN) Act requires employers with 100 or more employees to provide at least 60 days’ advance written notice to employees, their representatives (such as unions), and local government officials — including the Massachusetts Rapid Response team — before a plant closing or mass layoff.
• The WARN Act applies if you lay off 50+ employees at a single site and the layoff affects at least 33% of the workforce (or 500 employees regardless of percentage).

4. Final wages

Massachusetts law requires employers to pay separated employees all wages due on the final day of work. Final pay includes wages earned until the final day of employment and all accrued unused vacation time. Failure to timely pay final wages may expose the employer to a lawsuit by the employee seeking triple damages for unpaid wages.

5. Severance (Optional, Unless Required by Policy or Contract)

Severance is often offered in exchange for a release of claims — a contractual agreement in which the employee waives the right to sue the employer in return for payment. Employers should consult legal counsel to ensure the release is properly drafted.

If an employee signs a full release of claims in exchange for severance, unemployment benefits will not be delayed.  If no release is signed, benefits may be delayed for the duration of the severance period. Depending upon the age of the employees and the number of employees involved, the Older Workers Benefit Protection Act may also provide additional rights to your employees.

6. Issue Required Documents

• Separation Notice (Form 0590-A): Required for all terminated Massachusetts employees within 30 days of separation.
• COBRA Notice: If applicable, for continuation of health benefits.

7. Conduct a Respectful Termination Meeting

• Be clear, concise, and compassionate.
• If available, offer support resources such as outplacement services.

8. Personnel information

• Confirm current contact information in case the employee is recalled or needs to receive tax documentation.

Final Thoughts: Managing Layoffs with Integrity and Planning

Laying off employees is a high-stakes process that goes far beyond simply checking legal boxes. It requires planning, consistent communication, and a commitment to treating people with dignity during a difficult transition. Every step, from how decisions are made to what is said in the room, can have lasting legal, reputational, and cultural consequences.

Employers should not only focus on what is required in the moment but also consider how their decisions and documentation may be viewed by former employees, remaining staff, and regulatory agencies. Involving the right stakeholders early, preparing clear and respectful messaging, and documenting each step of the process are all critical safeguards.

With thoughtful preparation and the right support, organizations can approach layoffs not just as a business necessity, but as a moment to lead with integrity and minimize harm to both people and the business.

Need Support with a Layoff?

If you have questions about compliance, unemployment eligibility, or other HR considerations, contact the AIM Helpline at 1-800-470-6277 or helpline@aimnet.org.

For hands-on support navigating the layoff process, including documentation, communication planning, and meeting facilitation, contact AIM HR Solutions. Our team can help you manage the process with care and confidence. Contact us at HRInfo@AIMHRSolutions.com.