What Makes an Employee Eligible for Rehire?

September 22, 2023・6 mins read
What Makes an Employee Eligible for Rehire?

There are benefits to rehiring former workers — but not all ex-employees should be considered.

When it comes to staffing, flexibility is key. As market conditions for talent acquisition wax and wane, it’s important to adapt to whatever comes your way. A rehire option may be a best practice for business, depending on the employee and their reason for leaving. Some may not be eligible for rehire, meaning there’s some formality or official reason why it wouldn’t be appropriate.

For some businesses, employees who left the fold are no longer welcome to return and are automatically considered not eligible for rehire. But a blanket “no rehire” policy may be counterproductive. When staff members leave voluntarily or are subject to downsizing, eliminating them for rehire may mean missing out on talent that knows the company culture, is trained and can often hit the ground running. There are reasons to include or exclude employees for rehire: Some are common sense, others may be more nuanced. Let’s start with the basics.

Who Should Be Ineligible for Rehire?

Not all former employees should be eligible for rehire. In these cases, they shouldn’t.

Involuntary separation

Employees who left the organization due to termination of employment for cause should not be eligible for rehire. This could include employees fired due to:

  • Theft.
  • Inappropriate behavior.
  • Harassment or discrimination.
  • Job abandonment.

Company policy should note that these terminated employees are not eligible for rehire. You can include this in your company handbook, policy manual and new hire information.

Ghost employees

Some organizations eliminate employees for rehire if they abandoned their position at any time; some if they left before completing a mandatory training or probationary period. Depending on the length and cost of your training protocols, this may be a best practice. If you’re investing substantial time and resources to train, a staff member with a history of program incompletion probably shouldn’t be eligible to rehire.

The exception to the rule

For some positions, including entry-level, retail and food service, job abandonment may have been the result of fierce competition in your area. A new recruit may have received a better offer just before or just after starting at your company. If you’ve ever tried to snatch up a new hire from another company in your area, you understand. For these staff members, it might be worthwhile to consider them for rehire, particularly if your training period and investment are not as complex.

Who Should Be Eligible for Rehire?

Certain employees who formerly worked at your company might warrant eligibility for rehire, meaning they can be a good fit and deserve consideration. Reserve rehire eligibility for those whose circumstances represent the following situations.

Involuntary terminations

Downsized or laid off employees should always be eligible for rehire. These staff members were likely performing well when market conditions dictated their separation. Returning them to the job should be your first line of rehires whenever possible.

Voluntary terminations

Employees who left voluntarily might also be strong candidates for rehire, depending on their status at separation. If they were productive employees when they left, consider putting them back on the payroll. They know the organization, the work and the team And if they left for another job that didn’t work out, they may have learned the grass isn’t always greener.

Return to work

When it comes to rehiring employees, consider the ones who left the company to:

  • Attend to personal situations.
  • Attend to the needs of a family member.
  • Raise their children.

Some may have left the fold short-term; others may have had years away from the organization. But all will have experience with the culture and workings of the business. While they may require upskilling in some areas and training in new procedures, their historical knowledge can be invaluable.

Rehire Fine Print

What does eligible for rehire mean in your organization, and what will rehire status mean to employees? This is important to determine in advance.

Many companies outline the specifics of their rehire policy based on employee status. Laid off or downsized employees who are rehired are often fully reinstated with their seniority and benefits, including PTO eligibility. They can continue as though they never left.

For some, employees who were on the job for less than six to 12 months are considered “new hires” if brought back to the organization. For these rehires, seniority and benefits reset according to the newest hire date.

The amount of time the employee was off the payroll may be the criteria you use to establish whether the returning employees are considered a rehire or a new hire. You may set a limit, as in six months or one year. If the employee is rehired before the time limit, their benefits are fully reinstated; if after, seniority and benefits reset to the new hire date.

Unless you have a collective bargaining agreement that outlines layoff/reinstatement requirements, you can create a policy that outlines your terms for employee rehire, seniority, and benefits. Make sure to advise staff members of the policy and adhere to it equally across all categories of workers.

Welcome Back Policy

If your policy allows for rehires, make sure to reinforce during each exit interview with staff who leaves voluntarily that they’re welcome to apply to return in the future. Remind them that the organization will be open to discussing any suitable available positions that may exist.. While you cannot guarantee the position they vacated will be open, assure them you’re willing to talk about opportunities the company has to offer if they become available.

Note in the employee’s personnel record whether they are eligible for rehire and what terms, if any, will apply if they return to the organization.

Bonus Tip: The Rehire Code

Many companies are loath to provide reference checks for their past employees. Your own organization may be one of them. With the risk of litigation, most businesses will verify dates of employment and title only. Some businesses may provide salary information, but it’s rare for an employer to give details about an employee’s performance.

An easy way to find out whether or not they were a positive addition to their former employer’s staff is to ask if they’re eligible for rehire. If yes, you know they were an acceptable employee; if no, there may be a good reason why not. Make sure to ask if the company has a blanket “no rehire” policy, which many do, to assure you’re getting all the information you need. You may even ask why they are eligible or ineligible, but you may not get a detailed response.

There may be circumstances beyond a blanket no rehire policy that keep you from reinstating a good employee. For many organizations, rehiring means bidding wars for workers leveraging external offers against their current salary. For others, the “boomerang” effect may create a no rehire policy. This is when employees quit and return repeatedly, sometimes based on their eligibility to collect unemployment insurance.

Depending on conditions in your area, a blanket no rehire policy may be biting off your nose to spite your face, but an indiscriminate rehire policy may not be the best choice either. You may want to develop a policy that outlines your terms and needs, then considers rehire eligibility for employees not terminated involuntarily on a case-by-case basis.

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