Note these legal age issues when planning to layoff employees. The Older Workers Benefit Protection Act (OWBPA) provides additional protection to employees covered by the Age Discrimination in Employment Act (ADEA). The OWBPA affects downsizing employers in two ways. First, the OWBPA places strict requirements on an employee's release of an ADEA claim. Requirements include:   It requires such a release to be in writing as part of the information given to the employee during the layoff. Employees must be able to easily understand the release. (the "knowing and voluntary requirement"). The employee must be advised to consult with an attorney after the day of the layoff. Employees must be given a 21-day consideration period to evaluate the release The employee must be given a seven-day revocation period after signature. Second, the OWBPA includes potentially dangerous conditions for group layoffs. If an employer offers severance and an associated release to ...

Layoff Damage Control Focus: Employee Morale Lowered employee morale is an unwanted (and often unavoidable) consequence of a mass layoff. Retained employees can feel various emotions, including:   Loss or guilt over colleagues who were laid off Insecurity about their future with the company Increased stress due to a heavier workload To maintain employee moral and loyalty, you must reaffirm the remaining employees' value to the company, and refocus them on company objectives and goals (using incentives if possible). Immediately after a layoff, you should facilitate a company-or department-wide meeting to discuss the layoffs and provide a forum for employees to ask questions and air concerns. Thereafter, you should hold periodic meetings to maintain this dialogue with employees and follow up on the company's direction and achievement. Being honest and inspiring confidence in the company's future will help preserve employees' allegiance. Modern Business Associate ...

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 ...

Why national unemployment levels mean legal hassles for you. As a business owner, you should understand that a significant level of unemployment is the largest predictor of an increase in employee lawsuits relative. Understandably, employers face difficult questions and concerns during a weakened economy What is the process for an employee’s layoff? Which employment laws are relevant? How can I avoid an employee lawsuit? How do I combat lowered employee morale? A downsizing employer is expected to navigate a complex legal and human resources minefield, and must get its answers right the first time. Employers will increasingly seek legal guidance to minimize risk when answering these critical questions and dealing with laws. You may need compliance assistance (or a shoulder to cry on) during an isolated layoff, You should develop a strategic reduction-in-force plan while consulting your legal resources. In this way, you can avoid looming legal hassles that are charac ...

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 ...