Rehiring Former Employees

Have you ever rehired a former employee? Are there any circumstances where you might possibly do so in the future? If you have or if you might, what are the rules on benefits? Do their former years of service count towards current vacation levels and other benefits?

Why would anyone rehire a former employee? I have my own thoughts on that but perhaps we can save that for a future LegalBriefs.

The question is – does a rehired employee’s prior years’ of service count when determining current benefit levels? The answer is – the choice is up to you.

Let’s say you have a vacation program where the number of weeks of vacation each year depend upon the number of years of service. This is a common plan. If you want the prior years’ service to count when determining the vacation level, you can do so. If you want the employee to start over, you can require that too.

There are, however, two things you must do.

(1) You must tell the returning employee whether the prior time of service counts towards benefits at the time you offer them a job. Do this in writing.

(2) You must not discriminate. You can not intentionally or unintentionally discriminate on the basis of age, sex, race, color, national origin, religion, marital status, disability, sexual preference (beginning in Oregon on January 1, 2008) or other protected class.

There may be reasons why you might recruit a former employee with special skills or that can make unique contributions to your business. As part of your recruitment, you might agree to credit the prior time of service to the current benefit level. If you don’t do that for other returning employees or you want to preserve the option to start other returning employees at zero, you need to state the reason for your decision. What is it about this employee that makes him or her unique that you are offering a special incentive to rejoin? Set this out in writing at the time of rehire. Make sure, however, you are not unintentionally discriminating against a protected class of employees.

You have the ability to define the terms of employment. Your employment terms, however, cannot discriminate. If you do not put it in writing, however, any uncertainty will likely be resolved by the court in favor of the employee. Prevent that from happening by setting out the terms of rehire in writing. If you make a special exception for one employee, state your reasons for doing so in writing as well.