Go to Organization --> Manage Employees and select Terminated employees from the drop down list
Select the employee from the Terminated employee list and click Set Status as highlighted below;
Change Status to Active and Start Date to a date that you want the employee as rehire. Update the rest of the details and Click Update Status
Check for any Approvals if required.
Once Approved (if Approval required), Status will be changed to Active for the employee.
In Employee details --> Role screen, Payroll date will be changed to the Effective Date as selected above.