Layoffs and Restructurings

With many thanks to Chris Guldberg for this post. 

Employers considering COVID-19-related layoffs and RIFs right now should add one more item to their checklist of considerations: the possibility of inadvertently triggering a “partial termination” of their tax-qualified retirement plan.

Where plan participant numbers decrease substantially, the plan may incur what’s known as a “partial termination.” This is significant because, once triggered, the IRS requires the benefits of all “affected employees” be fully vested. Failure to provide such vesting could put the plan’s tax-qualified status at risk.


Continue Reading Beware — COVID-19 Layoffs May Trigger Liability for Partial Plan Terminations

This 1-hour webinar recording covers cost-cutting strategies including, layoffs, furloughs, salary reductions, delayed start dates and revoking offers, shortened workweeks, and exit incentive programs. Each topic outlines necessary key steps and considerations.

Please see below the webinar materials as well as additional resources.

Are They Right For You?

As the COVID-19 pandemic continues to wreak havoc on the global economy, United States employers are continuing to examine ways to reduce costs while at the same time both limiting the financial impact on employees and preserving their ability to ramp back up when circumstances allow. State short time compensation programs, also known as work share programs, provide one avenue for cost savings that may be appropriate for some employers.

Where available, these programs provide pro-rated unemployment compensation benefits to groups of workers whose hours are reduced by their employer on a temporary basis in lieu of layoffs. In addition, the recently passed Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) provides a federally-funded $600 per week unemployment compensation supplement to those who participate in such programs through July 31, 2020.

This Alert provides additional details about state short time compensation programs and answers frequently asked questions about the pros and cons of participation.

Where are short time compensation programs available?

Currently, the following 27 jurisdictions have short time compensation programs in place: Arizona, Arkansas, California, Connecticut, District of Columbia, Florida, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Washington and Wisconsin. The CARES Act provided federal funding for other states to enact short time compensation programs, so additional states may do so in the near term.


Continue Reading Short Time Compensation (Work Share) Programs

With our thanks to Chris Guldberg for this post. 

The financial fallout from the outbreak of COVID-19 has unfortunately forced employers to turn to layoffs and furloughs. Many employers facing these decisions are looking for cost effective ways to mitigate the financial impact on affected employees. A supplemental unemployment benefit plan (“SUB Plan”) may be one way to assist employees while generating some cost savings for the company.

A SUB Plan is a unique type of severance benefit plan that permits employers to supplement state unemployment benefits on an employment tax-favored basis. The employer can make up the difference between an employee’s normal wages and state unemployment benefits and, unlike traditional severance, payments under a SUB Plan are treated as a benefit rather than wages and are thus not subject to FICA or FUTA for the employer or employee.


Continue Reading An Alternative to Traditional Severance: SUB Plans

In the wake of the global pandemic, many companies need to take quick action to reduce costs. This 40 minute webinar, co-hosted by the ACC Southern California Chapter, outlines the various cost-cutting strategies available to employers in the US, and walk participants through the major considerations necessary to minimize legal risk. Our speakers discuss how

Unfortunately, the economic fallout of the COVID-19 pandemic is forcing employers to implement a range of cost-cutting measures — furloughs, temporary office and location closings, and layoffs. As employers continue to adjust operations during these extraordinary times, it is essential to remember the notice obligation under the federal Worker Adjustment and Retraining Notification, or WARN,

As a further update to our post here, on Thursday, the DOL issued an additional 22 FAQs on FFCRA, addressing required certifications for leave, healthcare coverage during leave, intermittent leave, teleworking, and several other topics. In a major and unexpected twist, DOL takes the position that FFCRA leave is not available if an employer

Predictions about the spread of COVID-19 through significant parts of the population and its effects on American life are staggering. The Centers for Disease Control and Prevention (CDC) reports more than 54,000 confirmed cases in the United States. As countries across the world implement new, extraordinary measures in an attempt to contain the coronavirus, which

Unfortunately, the economic reality of the COVID-19 pandemic, including recent shelter in place orders in California, is forcing employers to implement a range of cost-cutting measures – furloughs, temporary office and location closings, and layoffs. As employers continue to adjust operations during these extraordinary times, it is essential to remember the notice obligation under the

Current and Anticipated Requirements

The stark reality of government quarantines, mass-gathering bans, school closures, public health emergencies, and travel restrictions is impacting the American workplace and workforce in truly unprecedented ways. Every day, US employers institute facility closures, remote-working, furloughs and, in some cases, layoffs in response to the economic and health impacts of the