2.1.17 Layoffs

Formerly Known As Policy Number: 22.16

This Guide Memo describes Stanford University’s policies and procedures regarding permanent layoffs, temporary layoffs, and seasonal leaves of employees.

Applicability:

Applies to all regular staff and academic staff, as defined in Guide Memo 2.2.1: Definitions. This policy does not apply to Academic Staff-Teaching, who should refer to the Academic Staff-Teaching and Other Teaching Staff Handbook, employees in their trial period, or contingent (temporary and casual) employees. Senior Staff should refer to Guide Memo 2.1.14: Senior Staff. Employees covered by a collective bargaining agreement should refer to the applicable agreements at Labor Relations & Collective Bargaining. 

1. Policy Statement

Permanent layoff, temporary layoff, and seasonal leave may happen due to reasons such as budget cuts, lack of work, reorganization, or changes in the university's or department's needs. The university determines when layoffs or seasonal leave will happen, which department or team will be affected, and which positions will be laid off or placed on seasonal leave. These decisions are not subject to review. Layoffs must be coordinated with the local HR manager and approved by University Human Resources - Employee & Labor Relations.

2. Temporary Layoff and Seasonal Leave

a. Definitions

1. Temporary layoff occurs when a regular staff employee is removed from work for up to six months because the university determines that a temporary reduction in the workforce or specific types of work is needed in a particular layoff unit. During this time, there is no break in the employee’s service with the university.
2. Seasonal leave applies to a regular staff employee whose offer letter or appointment letter specifies that their position consistently performs work for less than 12 months during the fiscal year. Seasonal leave for such employees occurs each year for a set period, up to six months.  During the seasonal leave, there is no break in the employee’s service with the university.

b. Layoff Notice

1. Employees who are being temporarily laid off must be given at least two weeks' (14 calendar days') notice in writing before the layoff date, except in cases of emergency or in circumstances beyond the university’s control. Employees subject to seasonal leave should be reminded of the start and end date in advance.
2. The written notice should include the effective date of the temporary layoff or seasonal leave and the date the employee is expected to return to work. Any changes to the dates of the temporary layoff or seasonal leave should also be confirmed in writing.

c. Benefits and Time Off

1. Medical Plan, Dental, and Vision Coverage: For employees on temporary layoff or seasonal leave, the university will continue to contribute to the employee’s medical, dental, vision, and life insurance plans, as long as the employee promptly pays any required contributions during the temporary layoff or seasonal leave period (up to six months).

2. Vacation, Personal Time Off, and Floating Holiday 

   A. During the temporary layoff period, the employee can use any accrued vacation, personal time off (PTO), or floating holiday if their return-to-work date is within the same pay period in which the temporary layoff began.  If the employee’s return-to-work date is not within the same pay period in which the temporary layoff began, their accrued and unused vacation, PTO, and floating holiday will be paid out to them at the start of the temporary layoff. 

   B. During seasonal leave, the employee can use any accrued vacation, PTO, or floating holiday. 

   C. The employee will continue to earn vacation as if they were working regular hours during their temporary layoff or seasonal leave (see Guide Memo 2.1.6: Vacations). 

   D. If the employee is on a temporary layoff or seasonal leave on January 1, the employee will have floating holidays and PTO available starting January 1, in accordance with Guide Memo 2.1.13: Paid Holidays and Guide Memo 2.1.8: Miscellaneous Authorized Absences.

3. Sick Leave: The employee will continue to earn sick leave as if they were working regular hours during the temporary layoff or seasonal leave (see Guide Memo 2.1.7: Sick Time: Regular Staff Employees, Regular Academic Staff-Research and Regular Academic Staff-Professional Librarians).
4. Holiday Pay: If the employee is on a temporary layoff or seasonal leave for up to 25 days, they will receive holiday pay for their regular hours upon returning to work (see Guide Memo 2.1.13: Paid Holidays).  An employee who is on a temporary layoff or seasonal leave for more than 25 days will not receive holiday pay.

d. Selection for Temporary Layoff 

Management of the department will decide which employees will be temporarily laid off. 

e. Failure to Return to Work 

If an employee on temporary layoff or seasonal leave does not return to work when scheduled or when recalled, the employee will be considered to have resigned, unless they request and are approved for an additional leave of absence before the return date. The employee must be given written notice of the separation, including the effective date and information about applying for unemployment benefits.

3. Permanent Layoff

a. Definitions

A permanent layoff is when a regular staff employee who has completed their trial period is separated from the university due to:

1. The position being eliminated,
2. The position being reduced to less than 75% of full-time,
3. The position being changed from regular to non-regular status, or
4. The position being changed from continuing to fixed-term status.

b. Layoff Notice

1. Notice or Pay in Lieu of Notice: For permanent layoffs, the department must provide 30 days’ written notice. In limited circumstances, with approval from University Human Resources - Employee & Labor Relations, the department may give up to 90 days' notice if the employee will be working during the notice period. The department may also offer pay instead of notice in limited circumstances, with approval from University Human Resources - Employee & Labor Relations. If pay is given in lieu of notice, it can only be for up to 30 days.

2. Layoff of Academic Staff-Research and Academic Staff-Libraries

   A. If an Academic Staff-Research or Academic Staff-Libraries employee is laid off for programmatic reasons, they must be given 90 days' written notice. If pay is provided in lieu of notice, it can be for a maximum of 90 days.

   B. If the layoff is due to non-programmatic reasons, such as a lack of funding, the employee must receive at least 30 days’ written notice, but no more than 90 days. If pay is given in lieu of notice, it can be for a maximum of 30 days.

3. Resignation from University During Notice Period: If an employee resigns after receiving a written notice of a permanent layoff but before the layoff effective date, they will not be paid for the remaining notice period. However, the employee will still be eligible for severance pay as outlined in this policy (see section 3.f). The severance pay will be adjusted based on the employee’s last day of employment.

c. Change in Layoff Status

Notice of layoff to a regular staff employee may be changed in the following ways:

1. Deferral of Layoff: If the department finds additional work and/or funding for an employee who has been notified of a layoff to continue working in their current position for a period lasting less than six months, their layoff date will be postponed until the end of the deferral period. A new letter with the updated layoff date will be given to the employee.  At the end of the deferral period, the employee will be eligible to receive severance pay, which will be recalculated based on their last day of employment. The deferral must be approved by University Human Resources - Employee & Labor Relations. A layoff can only be deferred once.
2. Retained in Same Position or Hired into Another Position at Stanford: If an employee who has been notified of a layoff is retained in the same position or hired into another regular benefits-eligible position in the same or different department before their layoff becomes effective, they will no longer be laid off or be eligible for severance pay. The department will provide written notice to the employee that they will no longer be laid off and will not be eligible for severance pay. 

d. Benefits and Time Off

1. Medical Plan Coverage: Stanford will continue to pay for the employee's medical plan (for both the employee and any enrolled dependents) for the first three months after a permanent layoff, provided that the employee (1) signs the General Release of All Claims and Severance Repayment Agreement, (2) timely elects COBRA and makes the required medical coverage selections, and (3) timely pays any contributions they owe. After the first three months, the laid-off employee will have to pay the full cost of the coverage, plus an administrative fee.
2. Dental and Vision Coverage: The permanently laid-off employee must pay the full cost of COBRA coverage for dental and vision, including administrative fees, starting from the first day they are eligible for COBRA. The university does not contribute to this coverage.
3. Vacation and Sick Leave: A regular staff employee who has been notified of a permanent layoff can still accrue vacation and sick leave until their last day of employment.
4. Floating Holiday/Personal Time Off: A regular staff employee who is in their layoff notice period as of January 1 will have floating holidays and personal time off available starting January 1, in accordance with Guide Memo 2.1.13: Paid Holidays and Guide Memo 2.1.8: Miscellaneous Authorized Absences.
5. Holiday Pay: A regular staff employee who has been notified of a layoff may receive holiday pay during the layoff notice period.
6. Outplacement Services: Employees who are permanently laid off will be eligible for three months of outplacement services, starting within six months of receiving their layoff notice. The university will provide these services through a provider designated by the university at no cost to the employee. The university will pay for the services, with the amount set by the university.
7. Employees Concurrently Offered a Position at Stanford Health Care or Lucile Packard Children’s Hospital: If a regular staff employee receives a permanent layoff notice from the university but is concurrently offered a job at Stanford Health Care or Lucile Packard Children’s Hospital, and they accept the offer, they will not be eligible for any layoff benefits.
8. Reemployment After Layoff: If an employee who has been permanently laid off applies for another job at the university, they have a hiring preference as outlined in Guide Memo 2.1.2: Recruiting & Hiring of Regular Staff.

e. Selection for Layoff

1. Before giving notice of a permanent layoff to a regular staff employee, the university should first consider terminating contingent (temporary and casual) employees and trial period employees, as long as the remaining employees in the layoff unit have the necessary skills and abilities to do the required work. The elimination or reduction of a position will not lead to a permanent layoff under this Guide Memo if:

   A. The position is held by an employee still in their trial period, in which case the employee will be terminated during the trial period (see Guide Memo 2.1.15: Trial Period),

   B. The position is held by a fixed-term employee whose assignment ends at the same time the position is eliminated or reduced,

   C. The position is held by a contingent employee, in which case the employee will be terminated, or

   D. The position is held by an employee who accepts an alternative job within the university before the layoff effective date.

If none of these situations apply, the elimination or reduction of a position may lead to a permanent layoff.

2. Management will choose which employees will be laid off or retained based on their judgment of the department’s needs and whether the employee’s performance, skills, and abilities meet those needs.
3. If employees have similar skills, performance, and abilities, management will consider length of continuous employment with the university when deciding who to lay off or retain.

f. Severance Pay

1. Severance Payment: A regular staff employee who has worked continuously at the university for one year or more is eligible for severance pay when they are permanently laid off. To receive severance pay, the employee must sign the General Release of All Claims and Severance Repayment Agreement, and the agreement’s revocation period (if applicable) must have passed. Severance pay is generally paid on the last day of employment or within five working days after the revocation period ends, whichever is later.

2. Calculating Severance Pay: An employee will only receive severance pay once for the same period of service with the university. If an employee previously received severance pay and is permanently laid off again, they may not receive more months of severance pay in total than if they had no break in service. In no event can an employee receive more than 12 months of severance. To calculate severance pay if an employee was laid off previously:

   A. Determine how much severance pay they are eligible for (in months of base pay), based on the table below.

   B. Subtract the number of months of severance pay they have already received for previous severance pay.

   C. Add back any months or partial months of severance pay they have repaid to the university (see Section 3.g).

g. Repayment of Severance Pay

If an employee is rehired by the university as a regular benefits-eligible employee before their severance repayment period ends, they can keep the portion of severance pay equal to the amount they would have earned had they not been laid off. The "severance repayment period" begins the day after the layoff is effective and is equal to the same number of months as the severance pay received.

If the employee is rehired into a position with fewer hours or a lower pay rate than the position they were laid off from, the severance pay will be prorated accordingly. Any remaining severance pay must be repaid in full when the employee is rehired, unless the employee agrees to a repayment plan that is approved by the university. The repayment plan, which may involve payroll deductions, should be completed within the same tax year and must be documented in writing using a form provided by University Human Resources - Employee & Labor Relations.

h. Grievance

An employee who is laid off can file a grievance under Guide Memo 2.1.11: Staff Grievance Policy. However, only the decision to select the particular employee for layoff can be grieved.

Footnote(s):

¹ Continuous regular employment means the period of employment starting from the employee's most recent hire date as a regular staff member. If there is a break in service, the reinstated hire date is explained in Section 2.d of Guide Memo 2.1.2: Recruiting & Hiring of Regular Staff.

² Base pay refers to the employee's regular monthly salary and does not include extra pay such as shift differentials, overtime, or additional bonuses. Severance pay is calculated based on either the employee’s monthly base pay at the time of layoff or the average base monthly pay from the past 12 months, whichever amount is higher.