A voluntary layoff is a layoff that is initiated by an employee rather than an employer. In this situation, employees volunteer to be laid off in exchange for a severance package. This differs from a traditional layoff in which management chooses individuals to be laid off.
During budget cuts or an economic downturn, some businesses may issue a call for voluntary layoffs and give their employees the option of requesting to be laid off.
A voluntary layoff is generally seen as a win-win situation by all parties as it allows the employee to receive a severance package while the business is able to reduce their labor costs. Businesses will sometimes send out a voluntary layoff letter notifying employees of their options so that they do not have to resort to involuntary layoffs.
Layoff Letter Due to COVID-19 (Coronavirus):
UK employers will want to read up on the government furlough scheme.
Why Do Companies do Voluntary Separation?
- It is a show of good faith to employees.
- A voluntary layoff prevents retaliation by former employees.
- The workforce can be reduced without forcing people out.
- Some employees may be ready to retire for their position.
What is being done for small businesses affected by the Coronavirus (COVID-19)?
Governments worldwide are working on emergency relief packages to help companies continue to operate and get through these times. Here are some resources you'll want to review.
In the United States:
See our complete guide to U.S. resources.
- See our complete guide to Canadian employer resources.
- See our complete guide to Canadian worker resources.
See our complete guide to Australian resources.
In the UK:
Can you collect unemployment for a voluntary layoff?
If you ask for a voluntary layoff, you may not be able to collect unemployment. Some states will allow you to collect unemployment even after a voluntary layoff, but many deny your request since it was your decision to leave. Check with your state to find out.
Can you ask for a voluntary layoff?
Yes. Even if a business does not issue a call for voluntary layoffs, you can request one and start a conversation with management about what they might be willing to do.
What does involuntary layoff mean?
An involuntary layoff is a layoff that is chosen by management. In other words, the employee has no choice.
Should I take voluntary severance?
Every situation is different, so the choice is up to you. If you want to keep working, then you don't have to sign up for a voluntary severance package. However, if you like the severance terms, it may be worth considering.
What is a voluntary severance package?
A voluntary severance package is a package this is offered to anyone in a business who volunteers to be laid off. The severance package may include continued pay for a limited period of time, access to group benefits, and more.