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April 08, 2009
'How Do You Advise We Do Layoffs?'
It only makes sense that BLR subscribers would be concerned these days about the right way to conduct layoffs, and they’ve asked our legal experts many questions, from the very general to the very specific. Here’s a sampling of recent queries:

Q. Please recommend a mode of doing layoffs—in writing, or verbally?

A. Our experts recommended delivering the news in person, showing honesty and empathy without raising false hopes. They also reviewed federal WARN Act requirements covering employers of 100 or more people working a total of 4,000 hours a week who are to be laid off for at least 6 months. Given those conditions, workers must be given 60 days’ notice if possible. And, they offered two white papers from on how to conduct layoffs, available here and here.

Q. If a company plans layoffs, must it notify such public officials as the mayor, county judge, and so on before the terminations?

A. The answer to this question, too, depends on whether layoffs are covered by the WARN Act. If they involve at least 100 full-time employees and will last for at least 6 months, then the employer must notify local government officials and the state’s dislocated-worker unit, as well as the affected employees, at least 60 days before the termination date.

The notice must include the employer’s name and layoff location(s), contact information for a company official, whether the layoff is expected to be permanent or temporary, job titles of affected positions and the number of employees in each job class, and names of all unions and their elected officers that represent affected employees.

Q. Is it legal to recall a laid-off employee to a lower-paying job?

A. Our legal experts know of no laws barring this step. But if the employer provided severance payments and benefit continuation, they would likely be halted when a new job offer is made, even if the former employee refuses the position. Finally, it’s important to watch out for potential discrimination or adverse impact claims, in terms of both the layoff and the proposed rehire.

Q. If I have recently laid off regular, full-time employees, can I use temporary employees in their place?

A. Again, our experts could find no laws on the books that would prohibit such a step. But they warned the employer to look for any collective bargaining agreements, employment contracts, or past company practices that would dictate that former employees must be rehired when work is available. Absent those, contingent workers can add to an employer’s flexibility, reduce labor costs, accommodate one-time projects, and prevent a succession of expensive hires and traumatic layoffs.

But watch out for these pitfalls: There could be a negative morale impact on layoff survivors; the temps may need more training than anticipated; and the employer must avoid the mistake of classifying the temps as independent contractors. (The employer and its temporary agency could be jointly liable for claims temps might make.)

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