Lawyers.com > Understand Your Legal Issue > Labor & Employment Law > RIF or Layoff: What Difference Does it Make?

People have always made a living by working for others. And the fact that people sometimes lose their jobs is just as old as work itself. However, very recently there's been a huge increase in job losses. As you undoubtedly know, these job losses are the result of a general global economic downturn, as well as an economic crisis specific to the US.

Maybe it's happened, or about to happen, to you or someone you know. On the news, in the paper, in an e-mail message, or at the water cooler, you're probably hearing words like "reduction-in-force" (RIF), "layoff," or "downsizing." And you may wonder, does it make any difference what it's called?

Is There a Difference?

For all practical purposes, there isn't any real difference between RIFs and layoffs. You lose your job either way. There are some subtle differences, though. A layoff is when a particular employee, or a group of specific employees, is taken off the payroll, usually because there's a lack of work or the employer's economic condition makes it impossible to meet payroll obligations.

Traditionally, a "layoff" meant that you were out of work only temporarily, that is, there was a chance that you'd be rehired when there was enough work for you to do or the employer's finances improved. For example, a roofing company may layoff workers during the winter when there's less work to do, and then rehire those workers in the spring or summer when business picks up again.

Today, that distinction is all but lost. A layoff is usually permanent. Nonetheless, if you're being laid off, you should ask your employer if there's any chance that you might be rehired in the future.

A RIF, on the other hand, is the total elimination of jobs or positions. Again, RIFs usually occur because of a lack of work or a lack of enough funds to pay everyone doing a particular job or task. For example, say your employer makes and sells a product, and you and several other workers make the product. Your employer decides that the product isn't making money and decides to stop making and selling it. Through a RIF, the employer can terminate all job positions related to the product.

Take the same example, but your employer only wants to reduce the volume of product it makes, rather than stop manufacturing it completely. Here, the employer has to be careful. It has to come up with a plan to identify which workers will be eliminated. Usually, the decision will be based on factors like each employee's past performance and number of years with the company, or "seniority." The idea here is simple: Your employer should be trying to keep its best, most qualified workers. It can't use a RIF to discriminate against specific employees. In other words, it can't use a RIF to terminate employees based upon things like their age, race, or gender.

Benefits if You Lose Your Job

Generally, if you're laid off or lose a job in a RIF, you can collect unemployment compensation benefits. These payments are meant to help you make ends meet until you find a new job. How much money you can receive and for how long depends on the unemployment compensation laws in your area. In most states, you can't receive these benefits if you voluntarily quit your job for no good reason (you just didn't like your boss, for example), you voluntarily resign, or if you're fired "for just cause," such as having a poor attendance record or stealing from your employer.

Also, if your employer had a group health care plan for its employees and you're laid off, you may be able to keep your health insurance. Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), you can keep your benefits under certain conditions, such as if you're employer has at least 20 employees and you pay all of the costs of the coverage after you're laid off. Generally, you can take COBRA coverage for up to 18 months. The American Recovery and Reinvestment Act of 2009 also offers assistance to some workers in paying the premiums for COBRA coverage, which can be hefty.

If your employer is covered by the Worker Adjustment and Retraining Notification Act (WARN), you're generally entitled to some forms of help or assistance to find a new job, such as:

• Job search placement assistance
• Job training or retraining, including help with formal classroom education
• Help writing your resume and preparing for job interviews

WARN applies to large employers, those with 100 or more employees, and benefits kick-in only when certain layoffs or RIFs occur, such as when 50 or more workers are laid off.

Should You Sue?

Probably not. No one wants to lose his job, and when new jobs are hard to come by, a natural reaction is to fight for the job you've lost. The reality is, however, you probably don't have anything to fight with. The general rule in the US is that a worker can be fired (or she can quit) for any reason or for no reason at all. This is called employment at will. An exception is when you have an employment contract, which generally is an agreement that you'll be employed for a certain period of time and can be fired only specific reasons, like poor performance.

So, realistically, unless you can show that you were laid off or lost your job in a RIF for some improper or illegal reason, such as your age, gender, or sex, or in violation of the terms of your employment contract, you've got nothing to gain by suing your employer. Of course, if you think you've been treated unfairly in a layoff or RIF, you should talk to an attorney who's experienced in labor and employment law immediately.

Questions for Your Attorney

• I was recently laid off and my employer didn't pay me for all of the hours I actually worked in the last pay period. What can I do?
• Several of my co-workers and I think that we were targeted for a layoff because of our age. We are all over 40 years old, and our employer didn't fire anyone under the age of 35. What kind of proof do we need for a discrimination claim? How does an age-based claim relate to the pay level of older employees, who have earned raises over the years? Do you think we have a case?
• Four months ago, I, along with six co-workers and lost our jobs in a RIF, at least that's what they called it. I just found out that company hired four new people to do the same job we were fired from. Can it do that? Didn't the employer have to offer those jobs to the seven of us who were let go?

Related Resources on Lawyers.com^sm

- Sample Employment Agreement
- Unemployment Compensation
- Job Search Companies
- Employer: Job Discrimination FAQs
- Selecting a Good Labor and Employment Lawyer
- Visit our Employment message board for more help