Overview: When employers have no choice but to layoff significant portions of their workforce, they must be careful to comply with federal and state law. Specifically, the federal Worker Adjustment and Retraining Notification (WARN) Act covers certain employers depending on their size and obligates certain employers (depending on the scope or circumstances of their planned action) to notify employees identified for termination in advance. Some states impose more severe restrictions on employers engaging in layoffs or reduction in forces and employers in those states are bound to comply with both their state's version of the WARN Act and the WARN Act itself.
HR plays an important role in the process of determining whether to proceed with a layoff or reduction in force. Specifically, it must help cultivate performance-related metrics to identify employees for termination, assess any post-termination risks for the employer, manage organizational exit and maintain communication with remaining and outgoing employees, notify the employees to be terminated and finally, work with the remaining workforce to maintain productivity and morale.
Trends: WARN Act terminations which require notification are somewhat cyclical in that they mirror the strength of the economy and may be more frequent during political election and changeover cycles. A periodic review of layoff or reduction in force policies by HR - taking recent developments and changes in the law into consideration - can be extremely helpful in limiting post-event risk to the employer.
It is also important for HR professionals to familiarize themselves with WARN Act legislation to ascertain what types of claims against employers are typically successful. This way, HR can identify problematic areas of its WARN Act protocol before they become costly for the employer.
Author: Michael Jacobson, JD, Legal Editor
As mandated by the New Jersey Department of Labor and Workforce Development, New Jersey employers that have been in business for three or more years and who employ 100 or more full-time employees may be required to distribute this notice to individuals or entities upon a mass layoff, site closure or reduction in force.
Employers seeking to provide employees with an overview of separation from employment, including classification of the types of separation and recommended procedures, should consider including this model policy statement in their handbook.
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Use this workflow to properly choose the appropriate employees to be included in a reduction in force, and to navigate through the requirements of the Worker Adjustment and Retraining Notification (WARN) Act without creating further exposure for the employer.
In-depth review of the spectrum of Vermont employment law requirements HR must follow with respect to involuntary terminations.
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In-depth review of the spectrum of New Jersey employment law requirements HR must follow with respect to Involuntary Terminations
HR guidance on layoffs, reductions in force, compliance with the federal Worker Adjustment and Retraining Notification (WARN) Act, and the importance of understanding corresponding or heightened WARN Act requirements based on state law.