Coronavirus has made it so I cannot afford my employees – can I legally let them go or fire them? I need to keep some employees because of their job function, but others I can do without. If I fire those I do not need because of Coronavirus / COVID 19 impacts, is that discrimination?
Your clients and customer traffic are way down due to Coronavirus and government stay-at-home orders, which means your revenues are way down. You may not be able to afford to employ some of your employees, or they have almost nothing to do without customer traffic. Can you legally let your employees go – even if just temporarily? See the answers below.
I am in financial distress and cannot afford to employ some of my employees. Can I legally let them go?
Generally, yes, if you are in an at-will employment state, such as Idaho, and the employee is not under an employment contract for a term and you do not fire the employee for a discriminatory purpose. 1
I can or need to keep some employees, but not others due to their job function. If I let employees go because of financial distress from Coronavirus impact, is that discrimination against the employees for which I can be liable?
No. You are not discriminating against an employee for letting him go due to your financial distress. I have been hearing people talk that employers cannot fire people because of COVID 19 Coronavirus impacts because that is discrimination. This is simply not true. Discrimination is treating someone different (such as firing them) than other individuals based on his or her race, color, religion, sex, national origin, or disability (without reasonable accommodation for their disability). 2 If you have to let people go because your revenues have sunk and you cannot pay wages, that is not discrimination.
Brian Peterson practices employment law, ERISA, real estate / real property law, business law, contracts, and bankruptcy at Johnson May. The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings, and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it do not constitute a lawyer-client relationship.
Please contact us if you would like to speak to an employment attorney.
The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings, and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it do not constitute a lawyer-client relationship.
1 It is settled law in Idaho that “Unless an employee is hired pursuant to a contract which specifies the duration of the employment or limits the reasons for which an employee may be discharged, the employment is at the will of either party and the employer may terminate the relationship at any time for any reason without incurring liability.” See MacNeil v. Minidoka Memorial Hospital, 108 Idaho 588, 701 P.2d 208 (1985); Jackson v. Minidoka Irrigation Dist., 98 Idaho 330, 563 P.2d 54 (1977); Metcalf v. Intermountain Gas Co., 116 Idaho 622, 624 778 P.2d 744, 746 (1989). I have not surveyed the law of other states, but other at-will employment states should have similar laws. See also Idaho Code § 67-5909 (generally prohibiting employers from firing or refusing to hire or firing an employee based on race, color, religion, sex, national origin, or disability (without reasonable accommodation
2 See Idaho Code § 67-5909;