What should be in your employee’s severance payment? You are probably aware that State laws governing employees' final pay upon termination vary widely. As your company grows, needing to terminate an employee may come up more often. To avoid legal hassles, you should make sure your HR people know how to legally cut the employee’s severance payment check. For example, a laid-off employee's severance payment may be due immediately upon termination (e.g., in California), or not until an employee's next regularly scheduled payday (e.g., in Florida). Likewise, an employee's entitlement to payment for accrued vacation and/or sick time, commissions, and bonuses varies by state. There are different rules in each state for whether the employee is entitled to: Accrued vacation Accrued sick time Commissions Bonuses Failing to pay an employee as required by law can subject you to costly unpaid wage claims and additional civil penalties. You should encourage your HR resources ...

Federal HIRE Act offers a tax credit on social security, how much can my company earn? President Obama signed into law the Hiring Incentives to Restore Employment Act ( HIRE Act ) in March of 2010. The federal HIRE Act carries a tax credit on Social Security. It starts immediately for employers hiring qualified employees through the remainder of 2010. The best way to generate the maximum tax credit on Social Security is to hire qualified employees early in the year, since the exemption stops on wages paid after January 1, 2011. If an employee earning $40,000 annually is hired on April 1, 2010, the Social Security tax credit to the employer would be approximately $1,900. If the same employee was not hired until Aug. 15, 2010, the savings would be lowered to $950. The tax credit on Social Security can be used to offset scheduled tax deposit liabilities beginning April 1, 2010 and accrue with each payroll processed. Employers will receive a 6.2% Employer Social Security Tax Ex ...

Having an employee sign a separation agreement doesn’t cover you completely. If you offer a severance, a separation agreement and general release is essential to secure the release of employment-related claims. Keep in mind that not all claims can be released by an employee, Including: Wage and hour claims Certain workers' compensation-related claims Family and Medical Leave Act (FMLA) claims (courts are split over this issue). Additionally, an employer cannot bar an employee from filing a charge of discrimination (although it can prevent an employee from obtaining related monetary relief thereunder). Because of varying local/state employment laws, employers should be encouraged to seek outside counsel for separation agreement drafting and review. A separation agreement should be clearly written and must comply with local, state, and federal law. Important factors must be considered when negotiating severance and drafting a separation agreement. Modern Business Associ ...

Employee discipline documentation is your friend when preparing for a layoff. Documentation of employee discipline is critical when building a list of potential candidates for a lay off. Employee discipline documentation is one of the most important aspect to adding credibility to recommending an “inflexible” or “weak link” employee for a layoff list. However, it is too often the case that management cannot support its rationale with documented employee discipline. In those instances, the employer's decision about who to include in the lay off can be used by former employees to bolster discrimination allegations. Document your poor performers before considering a layoff. Fighting costly legal battles can quickly offset savings achieved during a layoff. A June 2008 Supreme Court decision has made lay offs even riskier for employers. In Meacham et al. v. Knolls Atomic Power Laboratory, the court determined that an employer must bear the burden of proving the "reasonableness" of factors other ...

Benefits of Performance Appraisals include Compliance Protection A performance appraisal system, when properly managed, provides you with a means of measuring, maintaining, and improving your employee’s job performances. Through the job performance appraisal program, your company can: Validate hiring decisions Recognize employees' job performance strengths and weaknesses Identify employees who are ready for promotion or greater responsibilities Assess training needs From a compliance perspective, you should be able to rely on performance appraisals to justify the full range of personnel decisions, including discipline and termination actions. For example, if a performance appraisal reflects poor job performance by the employee and this employee is later terminated, the you can point to the performance appraisal to show the employee was not performing to standards. If, however, an employee with overall weak performance is given a good or even average appraisal, and the em ...

How to avoid age discrimination issues during layoffs. There are a variety of reasons for an employer to offer severance to an employee who is separating from employment (e.g., to settle threatened or actual litigation, as a goodwill gesture in the event of a layoff), but in virtually all situations, the employer is going to insist that the employee sign a release as a condition to receiving the settlement payment. This article outlines some of the most important issues, specific to age discrimination, employers should consider when drafting such waivers. In all circumstances, it is advisable that outside counsel review all agreements. The Age Discrimination in Employment Act (ADEA) has a list of requirements that must be incorporated into your release. They focus on making sure the departing employee does not waive any right or claim under ADEA unless the waiver is “knowing and voluntary”. This means the release must: Be "written in a manner calculated to be understood" by the em ...

WARN act can ruin your layoff plan, are you at risk? Here at Modern Business Associates, we frequently deal with federal labor and employment laws and how they affect our clients. Laws relating to layoffs have been a hot topic lately. The Worker Adjustment and Retraining Notification Act (WARN act) is one such hot legal issue. The WARN act sets forth specific notification requirements for covered employers undergoing certain layoffs. (States including California, Illinois, Maine, and New Jersey have enacted similar legislation expanding an employer's notification obligations.) In part, the WARN act requires employers with 100 or more employees to provide workers with 60 days written notice of: Plant Closings Mass Layoffs Under the WARN act, a "plant closing" is a permanent or temporary shutdown of a single site of employment resulting in an employment loss of 50 or more employees during a 30-day period. Under the WARN act, a "mass layoff" is either a reduction in workforce ...

How to Follow your Termination Template and Use the Termination Meeting to lower your legal risk. The termination meeting is an opportunity for an employer to minimize risk. Your termination template should include specific elements of the termination meeting. As an initial matter, you should carefully consider the personnel conducting layoffs. Someone with a direct supervisory relationship over the worker is advisable and a third party witness should attend the meeting. Employees should be given their final paychecks, severance, and any applicable notifications during the termination meeting so they are not walking away "empty-handed". Separation agreements and releases should be distributed and signed (if possible). Additionally, it is a good idea to conduct terminations earlier in the week to give employees an opportunity to file for unemployment and begin considering other employment alternatives. Modern Business Associates frequently deals with HR issues. As a Prof ...

Harassment Policy Violation - What to do when your new manager makes a firing mistake. Most companies want to do the right thing and make correct HR decisions. A quality HR program pays off in a multitude of ways. Still, companies sometimes make very bad decisions, or, more likely, employees may make poor decisions that you may have been unaware of when the decision was made. Reasons for ill-advised decisions vary, but many times these are rooted in a lack of proper knowledge and training. Bad manager decisions force you to operate reactively rather than proactively. While the old adage "an ounce of prevention is worth a pound of cure" is absolutely true with respect to HR matters, there are times that the only thing you can do in a reactive mode is provide that "pound of cure." Let’s presume you already have a comprehensive antidiscrimination and harassment policy. In addition to the creation of the policy, proper notification of the policy and training were provided to employees. All appe ...

  Layoffs and other times when job reinstatement according to FMLA regulations may not be necessary. Does your HR department know the limited situations under which an employer can refuse to reinstate an employee who has taken FMLA leave according to FMLA regulations? The Act's primary purpose is to ensure that employees are reinstated to the same or equivalent positions held at the commencement of the leave. Moreover, when there is a dispute, it is probably fair to say that the U.S. Department of Labor and most courts lean strongly in favor of the reinstatement of employees. Laws in this area do offer some limited circumstances in which an employer may deny job restoration to otherwise protected employees: Key employees-According to FMLA laws, an employer may deny reinstatement, but not leave, to "key employees." A key employee is a salaried employee who is compensated within the top 10 percent of the employees working within a 75-mile radius of the employee's worksite. 29 CFR ...