Whether seasonal or due to economic conditions, layoffs are always challenging. Laid off workers can feel angry or resentful and those left behind, fearful. This can leave your business vulnerable for a lawsuit.
When a business is either facing or trying to avoid a layoff, there are many options and considerations. Some employers are still reducing their workforce and some are reducing hours as an alternative. Still others are reducing and/or suspending benefits as a way to control costs. However, no matter what actions are taken by employers, human resources must be involved.
Here are some alternatives and suggestions for employers considering or implementing a layoff:
- Determine if your organization must comply with the requirements of the federal mass layoff and plant closing law, the Worker Adjustment and Retraining Notification Act (for 100 or more employees) and New York states own version (for over 50 employees). The statutes, although similarly worded, have differing requirements for employers to provide advance notice to employees prior to a reduction in force.
- Establish a written recall procedure to prevent discrimination and keep skilled workers in the “pipeline” for when business picks up again.
- Ask departing employees to sign a statement confirming that they have not sustained a workplace injury during employment with the company. This will identify unreported injuries for immediate intervention and minimize the potential for fraudulent Workers Comp claim reporting after a layoff.
Another consideration is that employment practices risk is on the rise because of the laws that have recently been amended such as the Americans with Disabilities Act, the Lily Ledbetter Fair Pay Act, and the Family Medical Leave Act. As you consider layoffs and terminations, remember that you can protect your business from employee lawsuits by purchasing Employment Practices Liability Insurance (EPLI).
EPLI provides protection against many kinds of employee lawsuits, including claims of discrimination, wrongful termination, harassment, failure to promote and negligent hiring, among others.
For more information, contact Linda Rees-Murray, SPHR, and Client Services Director for The Flanders Group, the ESMTA endorsed insurance program manager. To reach Linda, or to request additional information related to this article, call 585-381-8070 ext 242.