What is a 'Zero Layoff Policy'

A zero layoff policy dictates that no employees shall be terminated as a result of business-based purposes dictated by the economy. This policy does not exempt termination as a result of poor performance or other violations of the employment contract, such as ethical lapses. Such policies are enacted in recognition that the welfare of employees should not be harmed due to economic factors that are out of their control. A zero layoffs policy may also be referred to as a "no layoffs policy."

Breaking Down 'Zero Layoff Policy'

A zero layoff policy means that an employer will do everything in its power to avoid terminating employees when the economy falls into a recession. This may include salary cuts, cuts to benefits, natural attrition, moving employees to part-time schedules or other cost-cutting means. A zero layoff policy runs contrary to the current habit of treating employees like free agents, almost devoid of any sense of loyalty on both sides. Such a policy is seen by some as a throwback to times of greater paternalism among employers. Having a zero layoff policy has a positive effect on employee morale, especially during rough economic times, as employees do not have to fear being unemployed. Companies that employ zero layoff policies frequently find themselves in lists of top places to work.

Zero Layoff Policy in Use

A zero layoff policy is especially evident in recessionary times, when most companies will cut headcount in order to improve their financial position. Companies that employ a zero layoff policy tend to treat employees like investments. They hire carefully and tend to train their employees to cover a variety of jobs. 

Zero Layoff Policy Examples

As of the beginning of 2017, the following companies have never laid off an employee. Some have been able to maintain a zero layoff policy due to steady growth and lean operating principles, as well as engendering a sense of teamwork among employees that makes occasional belt-tightening more palatable.

  • Southwest Airlines: The low-cost airline believes that its zero-layoff policy contributes to its winning attitude.
  • NuStar Energy: Despite the volatility of the energy industry, this San Antonio, Texas, company maintains a zero layoff policy.
  • The Container Store: Retail may have its vicissitudes, but this company has chosen to pay its employees higher than average hourly wages and forego layoffs.
  • Nucor: This steel company, in an industry that features low-cost competition from around the world, has grown since 2009 and has a no layoff policy.
  • Publix: This Southern grocery store chain is consistently ranked among the best places to work in America and features a zero layoff policy.
RELATED TERMS
  1. Worker Adjustment And Retraining ...

    A United States labor law that offers protection to workers, ...
  2. Golden Boot

    A golden boot is a financial package offered to encourage an ...
  3. Zero Percent

    Zero percent refers to a promotional interest rate often offered ...
  4. Unemployment Compensation Amendment ...

    Unemployment Compensation Amendment of 1992 allows a terminated ...
  5. Zero-Bound Interest Rate

    A zero-bound interest rate is the lower limit of zero on short-term ...
  6. Key Employee

    A key employee is a staffer who is a stakeholder with a decision-making ...
Related Articles
  1. Insights

    What Increasing Tech Layoffs Mean For Silicon Valley (YHOO, ADSK)

    Find out the reasons for layoffs by Bay area tech companies in 2016. Learn which factors indicate that the regional job market is still strong.
  2. Insights

    Boeing to Cut Hundreds of Engineering Jobs

    Boeing is planning to lay off hundreds of engineers at its commercial aircraft division.
  3. Personal Finance

    Alternatives To Layoffs

    Companies lay off employees during times of economic hardship, but there are other, less severe, ways to cut back on the money spent on salaries.
  4. Investing

    Why Retail Layoffs Are on the Rise

    Many retailers are struggling, which is leading to increased layoffs. But it's not all bad news.
  5. Small Business

    How to Make a Layoff Less Painful

    Getting laid off is never fun, but there are ways you can prepare yourself emotionally and financially to best manage a layoff.
  6. Financial Advisor

    Life Insurance Plans to Help Your Small Business Retain Employees

    How to use and design cash value life insurance plans as an incentive to help attract and retain key employees.
  7. Investing

    Microsoft Job Cuts Are for Its Own Good: Stifel

    Stifel Nicolaus says Microsoft cutting 3,000 workers will be good for the company's profits.
  8. Investing

    Mass Layoffs and Missed Revenues Speed up Intel's Slide (INTC)

    Not only did Intel report first quarter revenue that missed Street expectations, but the company also announced a massive layoff of 12,000 worldwide employees, representing about 11% of its global ...
  9. Personal Finance

    How Unemployment Stats Affect Employed People

    Unemployment is still hovering close to 10%, but what does it all mean to you? Find out how unemployment statistics affect your employment.
RELATED FAQS
  1. Can LLCs have employees?

    Discover how limited liability corporations (LLC) can have an unlimited number of employees and the legal steps required ... Read Answer >>
  2. Why does unemployment rise during a recession?

    Learn what a recession is, some attributes of an economy in a recession, and why the unemployment rate tends to rise during ... Read Answer >>
Trading Center