Keeping it legal
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Keeping it Legal:. Managing Reductions in Staff or Hours. Jeffrey E. Myers, Esquire One Logan Square 130 North 18 th Street Philadelphia, PA 19103-6998 215-569-5592. Creating a Plan For Your Reduction in Force. Identify the Goals/Needs Design New Structure to Meet Goals

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Keeping it legal

Keeping it Legal:

Managing Reductions in Staff or Hours

Jeffrey E. Myers, EsquireOne Logan Square130 North 18th Street

Philadelphia, PA 19103-6998

215-569-5592


Creating a plan for your reduction in force

Creating a Plan For Your Reduction in Force

  • Identify the Goals/Needs

  • Design New Structure to Meet Goals

  • Identify Areas to be Affected

  • Consider Different Downsizing Methods

  • Adopt Objective Selection Criteria

  • Identify Employees to be Affected

  • Perform Disparate Impact Analysis


Rif alternatives

RIF Alternatives

  • Attrition

  • Reshaping

  • Early Retirement Incentives

  • Voluntary Layoff

  • Contracting In

  • Furloughs

  • ATB Pay Reduction


Legitimate incentives

Legitimate Incentives

  • Flat Dollar

  • Service Based

  • Incentives Based on a Percentage of Salary

  • Increases in Pension Benefits


Alternatives to reductions in force wage hour considerations

Alternatives To Reductions In Force:Wage & Hour Considerations

  • Potential Impact On Exempt Status of Salaried Workforce

  • Recent U.S. Department of Labor Opinion Letters

    • Permanent changes to salary and workweek permitted

    • Short-term changes may violate salary basis requirement

    • Mandatory Time Off okay if:

      • Week or longer and employee performs NO work

      • Employee receives PTO for shorter periods

    • Voluntary Time Off okay if:

      • Full day or longer

      • Truly voluntary


Volunteers

Volunteers

  • FLSA defines employment broadly (i.e., “to suffer or permit to work”)

  • Individuals who volunteer or donate their services for the following are generally not considered employees:

    • Public service

    • Religious or humanitarian objectives

  • Volunteers typically are part-time

  • Volunteers generally act without contemplation of pay

  • Employees may not volunteer services to for-profit private sector employers


Eeo concerns disparate treatment

EEO ConcernsDisparate Treatment

  • Prima facie case

    • Member of protected class

    • Qualified

    • Adverse action

    • Others outside protected class treated differently

  • Employer’s burden: adverse action taken for legitimate, non-discriminatory reasons


Eeo concerns disparate impact

EEO ConcernsDisparate Impact

  • Prima facie case

    • Neutral selection criteria, BUT

    • Disproportionate number of employees from protected class affected

  • Employer’s burden: selection criteria are job related and consistent with business necessity; no less burdensome option


Questions to ask

Questions To Ask

  • Is there a clear and legitimate business reason for the RIF?

  • Are there objective criteria for selecting employees?

  • Were the criteria applied consistently?

  • Are actions consistent with all applicable policies?

  • Were terminated employees soon replaced?


Questions to ask1

Questions To Ask

  • If performance is a factor, how objective are evaluations/forced rankings?

  • Are early retirement incentives legitimate?

  • Any statistical anomalies?

  • Were all contract provisions complied with?

  • How were employees on leave treated?


Determining when a rif triggers application of the warn act

Determining When a RIF Triggers Application of the WARN Act

  • Employers:

    • 100 or more employees

    • Excluding those who worked less than 6 of the past 12 months OR less than 20 hours/week on average

  • Employees:

    • Hourly & salaried

    • Managerial & Supervisory

    • NOT business partners


Warn act

WARN Act

  • Qualifying Events

    • “PERMANENT” Plant Closure (Site or Facility)

      • 50 or more employees affected in any 30 day period

    • Mass Layoff

      • 500 or 50 &1/3

    • Aggregated Layoffs

  • Employment Loss Defined

    • Termination

    • Layoff for more than 6 months

    • Reduction in Hours (6/50 rule)


Consideration of state and local office closing laws

Consideration of State and Local Office Closing Laws

  • More and more state and local governments are passing plant closing legislation that varies from federal WARN Act:

    • New York, New Jersey

    • Philadelphia Ordinance

  • Apply to smaller employers

  • Different notice periods

  • Increased Severance Pay obligations in lieu of notice

  • Different definitions of triggering events

  • Different damage provisions and penalties


Examples of states with their own warn

California

Hawaii

Illinois

Maryland

Massachusetts

New Hampshire

New Jersey

New York

Tennessee

Wisconsin

Examples of States With Their Own “WARN”


Designing a separation package

Designing a Separation Package

  • The package must include:

    • Earned Compensation

    • Vacation

    • Other Earned Benefits

  • The package may also include a separation agreement including severance pay and a release of claims

  • Outplacement/U.C. Assistance


Designing a separation package owbpa requirements

Designing a Separation Package OWBPA Requirements

  • Group terminations (more than one)

  • 45 day consideration period/7 day revocation period

  • Disclosure Statements with Separation Documents

    • Identify the decisional unit

    • Eligibility factors

    • Time limits

    • Job titles and ages of all employees in the unit

    • Identification of who was selected/not selected for termination


Other release pointers

Other Release Pointers

  • Plain language

  • Knowing/voluntary

  • Real consideration

  • Right to counsel

  • Care in integration

  • State affirmative obligations of employees


Communications strategy

Communications Strategy

  • The Displaced (Notice)

    • When

    • By Whom

    • Content

  • Public

  • Customers

  • The Survivors


Safety concerns

Safety Concerns

  • Take necessary security and safety measures before something happens

  • Warning Signs for potential workplace violence:

    • Inflexible-difficulty coping with change

    • Makes threats or intimidating comments

    • Displays hopelessness or paranoia

    • Takes criticism poorly


Steps employers should take to secure intellectual property

Steps Employers Should Take to Secure Intellectual Property

  • Ensure that computer passwords are changed prior to termination or layoff

  • Ensure internal security protocols actually are being pursued

  • On the eve of a layoff, make sure large amounts of documents are not being copied or downloaded

  • Actual security

  • Review the legal rights in states in which the employer is taking personnel actions


F o c u s

F O C U S

Finally,

F air

Objective

Consistent

Unified

Sympathetic


Implementation contract review

ImplementationContract Review

  • Review Collective Bargaining Agreements

    • Layoff Clause

    • Bumping

    • Notice

    • Pension


Use following slides only if required

Use following slides only if required


Bargaining issues

Bargaining Issues

  • Decisional

    • Required only if motivated by labor costs such as wages and benefits

  • Effects

    • Timing

    • Payment of Severance

    • Continuation of Health Coverage


Warn act who is entitled to notice

WARN Act Who is Entitled to Notice?

  • Union

  • Individual Employees

  • Chief Elected Local Government Official

  • State Dislocated Worker Office


Warn act how much notice

WARN Act: How Much Notice?

  • Basic -- 60 Days

    or

  • As Much as Practicable (Not Zero)

    • Natural Disaster

    • Unforeseen Business Circumstance

    • Faltering Company


Warn act form and content of notice

WARN Act Form and Content of Notice

  • Identify Site

  • Contact Person

  • Permanent/Temporary

  • Dates of Terminations

  • Affected Employees (Names, Classifications and Numbers)

  • Bumping Rights

  • Union Information


Warn act penalties

WARN Act Penalties

  • Sixty Days of Pay (Calendar v. Working)

  • Sixty Days of Benefits (Includes Gratuities)

  • Civil Penalty -- $500 Per Day


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