Layoffs

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As we find ourselves firmly in the middle of Q1 of 2023, the avalanche of layoff headlines that started last quarter just keeps coming. Whether you follow the school of thought that the US entered a recession in summer of 2022 (after two consecutive quarters of negative gross domestic product) or not (given a strong labor market and corporate earnings growth), more and more companies are having to address overzealous pandemic hiring and the backlash from soaring company valuations. One comparatively “easy” place for multinational companies to cut costs — US workforces, where employment is generally “at-will” and absent contractual entitlements or triggering statutory notice requirements, layoffs can be carried out relatively quickly. With that said, as always, moving too quickly can create headaches that actually can be avoided — or at least dulled — with a little planning. 

Here are four tips to keep in mind when planning layoffs in the US:

  1. Beware of the WARN(ings)  

Larger layoffs have the potential of triggering the Worker Adjustment and Retraining Notification Act of 1988 (WARN Act) (and analogous state laws, known as state “mini-WARN acts”) statutes. These statutes impose notice and information obligations, which can be tricky to keep track of, and carry potentially heavy penalties for noncompliance.

Federal WARN requires employers to give advanced notice to affected employees in the event of a covered mass layoff or plant closing. Under the WARN, employers must provide 60 days’ notice of termination to the impacted employees, union representatives (if applicable), and certain government authorities. Under some state mini-WARN acts, 90 days’ notice is required. Click here for more on WARN.

  • Tip: WARN should become part of the layoff checklists (again), with teams (re)sensitized to the impact on timing and costs if triggered.

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Continue Reading 4 Tips To Avoid (Or At Least Dull) Headaches When Conducting Layoffs In The US

With concerns intensifying about an economic downturn, unfortunately some layoffs or other reductions-in-force may be necessary for employers to weather the storm. 

What’s different now as opposed to early-on in the pandemic? Because of the ups and downs in the market, and phenomena like the “great resignation” and remote work on a scale never seen before…

Studies are showing that around 98% of CEOs in the US and across the EU are preparing for a recession in the next 12-18 months.

With inflation increasing the cost of goods and certain services, some companies may find themselves in an immediate economic bind and needing to engage in cost-cutting methods to reorganize and…

This year New York employers have had to scramble to keep up with many new employment laws, and next year promises more of the same. The latest: New York City Mayor Bill de Blasio’s December 6 mandate that private sector employers require COVID-19 vaccines for their workers in NYC. If it survives expected legal challenges and takes effect December 27 (Happy Holidays!), the rule will be the broadest mandate of any state or large city in the US. From minimum wage increases, to regulations on the use of artificial intelligence tools in employee recruitment, to notice requirements for electronic employee monitoring, to New York’s fulsome response to COVID-19 through the HERO Act—private sector employers in New York have a laundry list of changes to implement and prepare for.

Below we highlight the 10 major employment law changes and updates that businesses need to know.

  1. New York City Vaccine Mandate To Hit All Private Employers December 27

By the end of the month, all in-person private sector New York City employees must have at least one dose of a COVID-19 vaccine, according to an announcement by Mayor de Blasio. The mandate, which will take the form of an order issued by the NYC Department of Health and Mental Hygiene, will apply to nearly 184,000 businesses and will not be limited to businesses in certain industries or based on company size. The mandate will most likely parallel the city worker mandate in that employers will, in certain instances, be permitted to make reasonable accommodations to mandatory vaccination policies for employees with legitimate religious or medical reasons, but will not permit any testing options in lieu of the vaccine. The mandate will not apply to fully remote employees or those who are alone at a worksite. The city has not yet announced whether employers will face inspections or fines if they fail to follow the mandate, but it intends to release implementation and enforcement guidelines by December 15, 2021.

The new mandate is the first of its kind on a local level while the federal vaccine rule for private employers with 100 or more employees remains on pause amid several legal challenges. The city mandate is also set to go into effect only days before the New York City mayoral transition, leaving future enforcement of the mandate uncertain.

 Employer Takeaways

  • Stay abreast of further city announcements concerning additional guidance on the vaccine mandate.
  • Operate under the assumption that the vaccine mandate will take effect December 27, 2021, and notify employees of the new mandate so unvaccinated employees have sufficient time to get vaccinated.
  • Implement procedures to verify applicable in-person employees vaccination status and prepare to collect vaccination records as confidential medical information.
  • Prepare to establish a mandatory vaccination policy and a process for employees to request exemptions, to the extent your business has not already done so.
  • Begin considering operational contingency plans if your business expects that a significant portion of the workforce will not get vaccinated.

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Continue Reading Top 10 New York Employment Law Updates For 2021/2022

We are pleased to share a recent Law360 article, “3 Ways To Protect Diversity If Layoffs Are Unavoidable,” with quotes from Mike Brewer. This article discusses three tips employers can use to help safeguard diversity when reductions in force cannot be avoided due to economic havoc caused by COVID-19.

Click here to view the article.

As a result of the pandemic, many companies have been forced to consider layoffs and furloughs. In this video, our Labor and Employment attorneys discuss how employers should approach such cost-cutting measures to ensure they are not discriminatory and to avoid allegations of differential treatment.

Click here to watch the video.

We are excited to invite you to our virtual Annual California Employer Update on Tuesday, December 8, 2020, from 1:00 – 2:15 PM PT.

“Quick Hits: California’s Top 10 & What You Need To Know In 2021” is designed to ensure that in-house counsel are up to speed on what changed in 2020 and prepared…

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.

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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