What Makes an Employee Eligible for Rehire?

Learn about reasons to include or exclude former employees for rehire.

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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.

For some businesses, employees who left the fold are no longer welcome to return, 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 not be eligible for rehire

Not all former employees should be eligible for rehire. Here are the ones who shouldn’t.

Involuntary separation

Employees who left the organization due to termination of employment for cause should not be eligible for rehire.

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

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

Company policy should note that 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 non-completion 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. They may have received a better offer just before or just after starting at your company. You’ve likely tried to snatch up a new hire from another company in your area, as well. 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 can be a good fit for rehire. These are the ones you should consider.

Involuntary terminations

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

Downsized or laid off employees should always be eligible for rehire. These staff members were likely performing well when market conditions required their separation.

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, or
  • To 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

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 6 months (or a year) 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 time limit (6 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.

You’re welcome back

If your policy allows for rehires, make sure to reinforce they’re welcome to return when you exit interview any staff member who leaves voluntarily. Remind them the organization will be open to discussing available positions if they’re considering returning. 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’s likely 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 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 single, no rehire policy may be biting off your nose to spite your face, but a blanket 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 for employees not terminated involuntarily on a case-by-case basis.

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