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Tis The Season: CCH Offers Tips To
Employers Faced With Layoffs
(RIVERWOODS, ILL., December 13, 2001) The holiday season
also is often year-end budget time the time of year when many employers make the
difficult decision to eliminate jobs, according to CCH INCORPORATED (CCH), a leading
provider of human resources and employment law information (http://hr.cch.com). And this year, given the weakened economy, its
likely that employers who have not faced the lay-off challenge in many years will need to
"While letting employees go is never a pleasant experience, preparation and
forethought can make the process less traumatic for everyone involved," noted CCH
employment law analyst Jennifer Carsen, JD.
Researching the applicable laws and putting together a coherent strategy is time and
money well spent. Wrongful termination claims even groundless ones can
damage employers finances and reputation. Its also very important for those
who remain on your payroll to know that youve handled the reductions in a
considered, informed and fair manner.
To help companies make sure they manage reductions successfully, CCH suggests they
consider the following:
- First, examine whether costs can be cut through alternative personnel measures, such as
unpaid leave, mandatory vacations, attrition or hiring freezes. If this is not an option,
see if voluntary, non-coercive separations (such as early retirement) are possible. The
fact that management explored other options before cutting jobs can be reassuring to all
- Review federal, state and local anti-bias laws. Examine carefully your list of proposed
terminations to make sure that you are not inadvertently targeting people in
"protected categories" such as age, race, sex or religion. Remember that union
members, also, are protected by the National Labor Relations Act.
- Make sure that you have a legitimate business justification for each layoff. Examine and
evaluate the list of proposed cuts, and document everything well.
- If you want terminated employees to sign an agreement waiving future claims, you must
offer in exchange something of value to which theyre not already entitled. Keep in
mind that employees over age 40 have special protections in conjunction with waivers under
the Age Discrimination in Employment Act of 1967 and the Older Workers Benefit Protection
Act of 1990. If the rules arent followed, the waiver will be invalid.
- Generally, the law does not require severance pay, although employees may be entitled to
it for various reasons (employment contracts, established policies or practices). Of
course, even if severance is not required, offering it can soften the blow of an
unexpected layoff. Consideration may be given to years of service. Also, make sure your
severance policies arent discriminatory.
- If you have 100 or more employees, you may be subject to the requirements of the federal
Worker Adjustment and Retraining Notification Act (WARN Act). The Act is designed to
protect employees by requiring advance written notice in the event of certain foreseeable
plant closings or large reductions-in-force. State or local laws may also apply.
- Be up front and fair with employees; help maintain the dignity of employees who leave.
Dont fire them over the phone. Dont "eliminate" a position and then
immediately hire someone new for that slot. Allow discharged employees to apply for other
positions within the company, if possible, and keep them in mind for new openings in the
future. Employees who have been dealt with honestly and fairly are less likely to leave
bitter and are less likely to sue. Its equally important that those who stay
employed with your company know you treat people fairly.
About CCH INCORPORATED
CCH INCORPORATED, Riverwoods, Ill., is a leading provider of employment law and human
resource information, software and e-learning for HR professionals. The companys
Human Resources Group is among the nations most authoritative sources of employment
law, including information on benefits, compensation, worker safety and human resources
management. Its publications and services include Human Resources Management, Pension Plan
Guide, Employee Benefits Management and Shared Learning interactive training. CCH is
a wholly owned subsidiary of Wolters Kluwer North America. The CCH Human Resources Group
web site can be accessed at http://hr.cch.com.
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