Open Arms: Rehiring Former Employees

December 4, 2018

Rehiring former employees is tempting for a variety of reasons, but before you jump on the opportunity, here are a few things to remember and check out!

Rehiring Former Employees cover

The world is seemingly becoming smaller by the second. Just take a look at LinkedIn, Facebook, or Instagram, and you’ll see countless friends, acquaintances, and former associates who are connected with one another—independently from you.

If that isn’t reminder enough not to burn any bridges, then here’s something to consider: one way or another, you could either be the person returning to a former employer, or you could be the person rehiring former employees.

Welcoming back former employees can be a sticky process. There can be a myriad of reasons why a person has left the company. Think about the various people who have left your company, and why they have left.

Perhaps an employee moved cities or states, but returned shortly thereafter.  Maybe an employee left your company for a better opportunity, but the opportunity didn’t turn out to be better.  Or an employee left your company to stay home with children, then after the children started school, decided to return to work.

There are other not-so-positive reasons why employees might leave a company. These include being laid-off or being fired for any number of reasons. Whatever the reason for leaving, if you are considering rehiring former employees, there are things to consider before doing so.

A candidate just like anyone else

Rehiring Former Employees image 1

Snatching up most of your former employees may be tempting, should they come knocking again. After all, they know the company.  A former employee is familiar with the business, with the industry, and most importantly, the people working within the building.  Depending on how long a former employee has been gone, existing employees will likely know (or at least know of) the former employee.

Having this knowledge and understanding of the former employee effectively takes the edge off where new-employee jitters are concerned.  No one wonders if the new person will fit in, because most people already know whether or not they meshed well with the team.

While familiarity with a potential future associate is an advantage during the hiring process, you still need to ensure that you scout the best candidate.  Yes, you might feel quite certain that the former employee is still a great match for the open position.  However, if you already have an open requisition and a pool of candidates, you should consider that former employee to be a candidate just like anyone else.

Despite the desire to fling the door open and put that person to work, require them to go through the same process as other candidates. Make certain that this is truly the most qualified person for the position.  When rehiring former employees, going through a rigorous interview and hiring process like anyone else really puts a person’s loyalty in check.

Related:  Employee Classification: How to Properly Classify and Avoid Misclassification penalities

Qualified does not equal quality

Speaking of qualified candidates for a position, try not to get “qualified” confused with quality. There are plenty of qualified people in the workforce. Remember though, someone can know the ins and outs of an industry, and still have a terrible work ethic.

Rehiring Former Employees image 2

The first place to start when considering the quality of a former employee is the employee file, where you will likely find notes pertaining to the reason for termination.  If your company has kept thorough records, it’s possible you’ll find a resignation letter and notes from an exit interview.

These documents should refresh your memory.  Especially if details are hazy, if you weren’t in your current position, or if you weren’t even with the company when the former employee was.  Sometimes it is easy to forget the reasons why someone left. You may gloss over misconduct or interpersonal issues, especially when you’re in a pinch to fill an open requisition.

Rehiring former employees might seem like a dream come true when you are desperate. The dream can quickly turn into a nightmare scenario if you’re too quick to hire someone without fully investigating their reason for leaving.

Paperwork for rehiring former employees

Regardless of whether you’re hiring new candidates or rehiring former employees, you’ll still want to enforce your onboarding process.

First, make sure they have a welcome letter, the employee handbook, and that the employee understands the compensation package and any fringe benefits your company offers.  It is also possible that certain things have changed within your company since the former employee’s termination, including policies found within the employee handbook, and benefit offerings.

Your employee will also need clarification regarding the new role, as certain things might have changed in the interim, including territories, technology platforms, and quotas.

Rehiring Former Employees image 5

After the policies, compensation, and duties have been clarified, you must make sure specific paperwork is completed.  While it seems silly in some instances, better safe than sorry! “Reusing” paperwork can lead to incorrect banking information, addresses, tax status, and withholding amounts, and most importantly, compliance.

Furthermore, since documents pertaining to former employees are only required to be saved for a finite amount of time, it is not guaranteed that they will still be in the company’s possession when rehiring former employees.


The first document any new hire should complete is the I-9 form.  The I-9 verifies their eligibility to work in the U.S. So you could say it’s a big deal!

If you’re rehiring former employees returning within 3 years of completing the form, according to the IRS you can either complete a new form, or update the existing form.  If you choose to update the existing form, you will fill out section 3 of the I-9.  This section requires you to verify the name and date of the rehire.

Related:  Attorney? HR Consultant? Who You Gonna Call?

You’ll also need to verify that the employee is still eligible to work in the U.S.  Make new copies of their documentation proving their identity and work eligibility.  Finally, you will sign and date the last box in section 3.  Keep this document on file for 1-3 years (three years after the date the employee is hired, or one year after termination, whichever is later).


Unlike the I-9, the IRS does not provide rules about the completion of a new W-4 when rehiring former employees.  However, best practice is to always require a new W-4. Even if the employee was only terminated for a month, require a new W-4.  It’s much easier to have a re-hire fill out their W-4 with the same information, than to re-use their previous form and find out at year end their withholding amounts weren’t updated. Never assume!

Requiring this form when rehiring former employees ensures you’ve collected the most current information for tax purposes.  This document needs to be kept on file for no fewer than four years.

So now I come to you with open arms

Rehiring Former Employees image 6

Rehiring former employees can be an advantage or it can be a mistake.  It is up to each employer to fully consider each candidate, in order to be certain that you are making the best decision when looking for a new hire to fill a role within your company.

Feel free to peruse their social media pages if you are on the fence about rehiring any former employees! Sometimes you can gain a lot of insight about what a person has been up to since leaving your company. Perhaps you may even find some sentiments they expressed that you are unaware of.  If you do, however, decide to welcome someone back with open arms, consider yourself lucky that this seems to be a mutually beneficial relationship.

Subscribe to our newsletter

Get the latest from the world of payroll & HR delivered straight to your inbox!