Employment Law and Layoffs – What Do I Need To Know?
There are many rules, state and federal, governing employment law and layoffs based on the size of your company and the state in which you conduct business. Although not complicated the rules can be challenging based solely on numbers and the amount of time the employees will be out of work. To be more clear the federal Worker Adjustment and Retraining Notification Act (WARN Act) states that any employer who employs more than one hundred employees must give at least sixty days written notice in the event of a planned mass layoff. Now I wish it was that simple because the law also goes on to clarify that the above applies to any business that plans to close for more than six months.
Employment Law and Layoffs – You Must Give Advanced Written Notice
However, the tricky part is what if the business is not going to close or layoff everyone due to a plant temporarily closing? Well the WARN Act states that if the business lays off at least fifty employees at any one location over a thirty day period and those fifty plus employees receiving the layoff must equal at least one third of the business locations total workforce and the total layoff period extends for more than six months. The important piece to all of this is to make sure you give advance notice if you are planning to have layoffs at your business. Having said all this there are still exceptions to the above.
Employment Law and Layoffs – You Must Not Discriminate
A very important consideration prior to giving notice of a layoff is to review the group of employees being considered for the layoff. No matter whether the layoffs are justified or not if the group of employee’s falls into a protected class of people (gender, race, nationality, skin color, disability, or age, etc.) it is extremely important to be able to justify why they have been selected as the group of employees being laid off. As an example, if you lost an important contract that employed two hundred of your four hundred employees at just one of your facilities and those two hundred employees are all female it could present a problem, especially if the other two hundred employees are males. If this is the case you may have to see if the female employees are more senior than the male employees and if they can do the jobs not affected by the loss of the contract. The last thing you need if you are facing difficult financial times as a business is to be sued for discrimination on top of everything else.
Employment Law and Layoffs – What If There Is an Employment Contract or Union Agreement
It is also important to understand that anyone that has signed an employment contract that guarantees employment for a specific amount of time will most likely be protected by this contract. Of course there are always clauses that can be written into those contracts that may allow a company to end the employment contract early. In addition, if the group of employees being affected by the layoffs
is part of a bargaining unit (Union) they also may be protected and/or other additional rules may apply up and above whatever the federal and state laws mandate.
Employment Law and Layoffs – The Written Notice Must Give a Business Reason
Remember that the WARN Act requires that you provide written and dated notification of the company’s intention of a mass layoff. Within the written notification it should provide a business reason for the decision being made. Within the reason for the mass layoff the written documentation should present how the layoff will affect the business as a whole. In addition, it should give reasoning why the employees that are being laid off were decided upon. It is critical that sound reason is provided so that legal action, even if not justifiable, is not taken against the company.