Rehire eligibility policy template: exit codes, documented reasons and a shorter track for returners

A rehire eligibility policy decides, at the point someone leaves, whether the company would hire them again, records why, and says how that decision is reviewed if they apply years later. Most policies use three codes: eligible, eligible after review, and not eligible, with "not eligible" limited to documented reasons and approved by someone other than the departing employee's manager. As of October 2026, no US federal law requires a rehire policy, but a no-rehire decision cannot be retaliation against someone who complained of discrimination (42 U.S.C. 2000e-3(a)), California voids most no-rehire clauses in employment settlement agreements, and returning service members have reemployment rights.

Below: the codes, a copy-ready policy, the exit-form section that feeds it, where blanket no-rehire rules go wrong, and a shorter interview track for returners, often called boomerang hires. The paperwork for a rehire's Form I-9 is in Form I-9 for rehires; checking what someone did while they were away is in how to verify employment history.

What should a rehire eligibility policy cover?

• When the code is set: at exit, by HR, from a short form the manager completes.
• Which codes exist and what each one means when the person applies again.
• Which reasons justify "not eligible", and the evidence that has to be on file.
• Who approves a not-eligible code, and who can never set one alone.
• Review and appeal: when a code expires or can be reconsidered.
• The returner hiring track: which steps a former employee skips and which they do not.
• Records: where the code lives, who can see it, and how long it is kept.

Which rehire eligibility codes should you use?

Leave out codes that describe the person rather than the facts, such as "bad attitude" or "not a culture fit". A code is only as defensible as the documented reason behind it.

The rehire eligibility policy template

REHIRE ELIGIBILITY POLICY
[Company name]   Owner: [HR lead]   Effective: [date]   Review: [yearly]

1. PURPOSE
To decide consistently whether former employees may be hired again,
and to give returning employees a fair, efficient process.

2. SCOPE
All employees who leave [Company], for any reason. [Contractors and
agency workers: covered / not covered.]

3. CODES
Every departing employee receives one code, set by HR within [5]
working days of the last day:
- ELIGIBLE: may apply for any role and follows the returner track.
- ELIGIBLE AFTER REVIEW: may apply; HR and the hiring manager review
  the exit record before any interview.
- NOT ELIGIBLE: will not be considered for employment or for
  assignment through an agency, unless the code is changed under
  section 6.

4. REASONS FOR "NOT ELIGIBLE"
Only for conduct documented in the personnel file, such as:
[theft or fraud; violence or threats; harassment or discrimination
found after an investigation; falsifying records; a serious safety
breach; (other)]. Performance alone is "eligible after review".

5. APPROVAL
- The manager recommends a code on the exit form, with the reason.
- HR sets the code. A NOT ELIGIBLE code also needs approval from
  [HR lead / legal].
- No code is set or changed because the employee raised a concern
  about discrimination, harassment, pay, safety or another legal
  right, or took part in an investigation.

6. REVIEW AND APPEAL
- ELIGIBLE AFTER REVIEW is reviewed when the person applies.
- NOT ELIGIBLE may be reviewed after [3] years on request, or sooner
  if new information shows the documented reason was wrong.
- The former employee may ask HR for a review in writing at
  [address]. HR replies within [30] days.

7. RETURNER TRACK
Former employees coded ELIGIBLE who left within the last [5] years:
- skip the recruiter screen;
- complete one structured interview on the new role's criteria
  and on what changed while they were away;
- reference: the former manager's view is checked against the file;
- offers follow the normal approval and pay-range process.
Work authorization is verified as for any hire (see section 8).

8. RECORDS
Codes are stored in [HRIS], visible to HR and recruiting only.
Rehires complete Form I-9 under USCIS rules for rehired employees.
Exit records are kept for [X] years under [retention policy].

9. CONTACT
[HR contact]

The exit-form section that sets the code

The code is only as good as the information captured on the way out. Add this block to your exit form; the exit interview form template covers the rest of the conversation.

REHIRE RECOMMENDATION (manager)
Employee: [name]   Role: [title]   Last day: [date]
Reason for leaving: [resigned / end of contract / role eliminated /
  dismissed / other]
Would you hire this person again into the same role?  [yes / no]
Into a different role?  [yes / no / depends: ______]
If no, the documented reason and where it is filed: [______]
Recommended code: [Eligible / Eligible after review / Not eligible]
Manager: [name, date]

HR DECISION
Code set: [ ]   Reason on file checked: [yes / no]
Second approver (if Not eligible): [name, date]

Where do blanket no-rehire rules create legal risk?

The riskiest policy is the simplest one: "anyone who was dismissed, or anyone who sued us, is never rehired". Four rules cut against it, as of October 2026:

• Retaliation. Title VII makes it unlawful to discriminate against "employees or applicants for employment" because they opposed an unlawful practice or took part in a charge, investigation or proceeding (42 U.S.C. 2000e-3(a)). The EEOC's enforcement guidance on retaliation (August 25, 2016) lists refusal to hire among materially adverse actions and says protection continues after the employment relationship ends. A code set because someone complained is the textbook problem.
• Disparate impact. A neutral-looking rule can still be unlawful if it "causes a disparate impact" on a protected basis and is not "job related for the position in question and consistent with business necessity" (42 U.S.C. 2000e-2(k)). A rule such as "never rehire anyone with an attendance issue" can fall on people who took leave for reasons the law protects.
• Settlement agreements in California. An agreement settling an employment dispute "shall not contain a provision prohibiting, preventing, or otherwise restricting" an aggrieved person from future employment with the employer, with narrow exceptions, including where the employer documented a good-faith finding of sexual harassment, sexual assault or criminal conduct before the claim was filed (Cal. Code Civ. Proc. 1002.5). The same section confirms an employer need not rehire someone where there is a legitimate non-discriminatory, non-retaliatory reason.
• Returning service members. Under USERRA, a person absent for service in the uniformed services generally keeps reemployment rights if they gave advance notice, the cumulative absence from that employer is not over five years, and they report back or apply in time (38 U.S.C. 4312). That is a right to return, not a rehire application, and a rehire code does not override it.

This is general information, not legal advice. Have counsel review the "not eligible" reasons before you adopt them.

How should a former employee's application be reviewed?

1. Check the code before the screen, not after a hiring manager is already keen.
2. For "eligible after review", HR reads the exit record and the new hiring manager decides whether the reason applies to the new role. A missed sales target says little about fitness for an operations role.
3. For "not eligible", confirm the documented reason is on file. If it is not, the code should be reviewed, not enforced.
4. Record the outcome on the candidate record, the same way for everyone.

What does a shorter interview track for returners look like?

The question to never skip: why they left, and what is different now. A returner who left because of a manager who is still there will leave again. The internal candidates guide has questions that adapt well, because returners share the same risk: everyone thinks they already know them.

A worked example

Common mistakes