What is a layoff in the context of employment law?

In the context of employment law, a layoff refers to the temporary or permanent termination of an employee's job due to business factors, such as economic downturns, company restructuring, or changes in operational needs. This is distinct from a termination for cause, which is typically tied to employee performance or misconduct.

Layoffs are often a strategic response by employers to manage staffing levels while trying to maintain flexibility in their workforce during periods of uncertainty. Because of the nature of layoffs, they can be either temporary, with the possibility of reinstatement when conditions improve, or permanent, depending on the circumstances surrounding the business's needs. Understanding this definition is crucial for recognizing the legal implications and potential employee rights related to layoffs, such as eligibility for unemployment benefits or severance packages.