It is not illegal to layoff an employee on maternity or paternity leave. However, it is against the law to layoff someone because they are on maternity of paternity leave.
Let’s look into an example where it makes sense to layoff someone on maternity leave:
Jane has been on maternity leave for 2 months from her company, Pennsylvania Manufacturing. Unfortunately the plant where she worked at before her maternity leave is in the process of being shut down. There isn’t an opportunity for Jane to relocate, and there won’t be a plant for her to go back to work at after she completes her maternity leave.
In this situation, Jane would be laid off, even though she is on maternity leave. If Jane wasn’t on maternity leave, should would still have been laid off. The employer can back up their decision to layoff Jane with their business needs.
And now let’s look into an example that would be seen as illegal:
Jill has been on maternity leave for a month from her company, Jayhawk Medicine. Her boss is annoyed with all of the extra work that has resulted from Jill’s leave, so she decides to lay off Jill.
In this situation, Jill has been laid off because of her maternity leave, which is against the law.
It should also be stated that just because something is legal, does not mean that it is ethical.
Because of the long term implications of your organization’s employer brand, and your ethical duty to treat your employees well, your human resources team should take into account every option to support someone on maternity or paternity leave before laying them off.
Also, it is a best practice to provide extra weeks of severance pay based on the leave time that person had left when they are given a layoff notice. For example, if your organization typically gives 5 weeks of severance pay, and your employee has 6 weeks of maternity leave left, their severance pay should be 11 weeks.
Before you layoff anyone on maternity or paternity leave, please consult with your corporate counsel or attorney. We only intend to provide information, not legal advice. Laws around these issues differ from state and state and require thorough examination before action is taken.