Generally, yes. Lay-offs for economic reasons are not illegal. However, an employer is not allowed to lay off all of its older workers to save money, just because they earn more. They are also not allowed to falsify an employment record to justify a lay-off based on performance. Employers are not insulated from being sued under the wrongful termination laws simply because they label their conduct a “lay-off.” All of the same laws apply.
Furthermore, even if a lay-off is legitimate, there still are many legal issues that employees must consider. They include personnel file issues, severance pay, accrued personal time, commissions, incentive compensation, overtime pay, unemployment, reference letters, restrictive covenants and more.
Our Connecticut Lay-Off Survival Guide addresses these issues and provides helpful links to resources on those topics.