It used to be that once an employee left a job, they were cutting ties with the organization forever. However, it’s becoming more common for employers to rehire former employees, anyone from seasonal workers to full-time professionals. A 2015 national survey of more than 1,800 human resources professionals, managers and employees found that ”nearly half of HR professionals claim their organization previously had a policy against rehiring former employees – even if the employee left in good standing – but 76 percent say they are more accepting of hiring boomerang employees today than in the past.” So - how do you do it right?
Is it worth rehiring?
Your company could save time and money by rehiring instead of bringing on new employees. Even if new job duties differ from old ones, a rehire is already familiar with your corporate culture, coworkers and channels of communication. They will require less training and are ready to hit the ground running - boosting your productivity.
You can also save on job advertising and recruiting costs if you hire a former employee directly. According to Business Insider, “most employees will not work at the same company for their whole career, and even if a job doesn't last, relationships will.” So if you’re connected with past employees through social media like LinkedIn, or even if you move in the same professional circles, it can be easier to reach out than advertise.
There’s always a risk that other employees won’t be anxious to welcome back their former coworker, especially if they’ll be in a new, higher-level position. Likewise, you’ll want to carefully review past employment records and exit interview documents to screen for possible grievances or performance issues that could crop up again. Do your homework, keep existing employees in the loop and make an informed decision.
What’s the rehire process?
Even if rehiring hasn’t come up in your organization yet, it probably will. So, if you don’t have a rehire policy in place, take time to make one before you need it. Policies help you cover all of your HR bases and treat employees consistently, and rehires are no exception. According to the Society for Human Resource Management, “the requirements for a former employee’s eligibility for rehire, the circumstances under which a former employee will be ineligible for rehire, and treatment of rehired employees with respect to recognition of prior service and benefits should be set forth in a policy.” Check out their sample rehire policy for more ideas.
Your policy should cover how you’ll handle paperwork, specifically I-9 and W4 forms. When it comes to a rehire’s I-9 form, you have a couple of options. If you’re rehiring within three years of the date of the previous I-9, you can use Section 3 of the I-9 to record their date of rehire (or you can opt to complete a new I-9). If more than three years have passed since the original I-9 was completed, you must complete a new form. To streamline the process, Nolo.com advises that “employers must make a policy decision: to use Section 3 of the existing I-9 when possible (doing new I-9s only when legally required) or to skip the analysis and simply do new I-9s for all rehires.”
Technically a new W-4 form would only be required for changes to an employee’s tax status (e.g. marriage, change in number of dependents, etc.). Your rehire policy should explain when you will require a new W-4 for rehires: How long have they been away? What, if anything, has changed about their tax status? Remember that the IRS requires employers to retain W-4 forms for employees for four years, so if the rehiring falls within that window, you should have the previous form to check.
Be sure to review your new hire documents to find any that expire when employment is terminated – you’ll need to include these in your rehire packet. And be sure to check with your state for any other forms that have been introduced or changed since the employee worked for you previously. Even though you’re hiring someone who’s familiar with your organization, if more than a few months have passed, they could need a refresher on policies and other documents that go in your standard new-hire packet, so include those too.
Horizon Payroll Services can help you stay on top of your rehiring and other HR needs. Contact us today for more information.