Coronavirus Layoffs

coronavirus layoffsCoronavirus layoffs have hit employees hard. Unfortunately, things look to get worse economically before we turn the corner on this crisis. When employers consider cost-cutting measures, one of the first things they look at is layoffs.  Before making a hard and fast decision on the topic of coronavirus layoffs, there are some important issues employers need to consider. 

Layoff Issues to Consider

First of all, employers need to take a look at how serious the fiscal hit to business is, and take an educated guess regarding how long the financial crisis will last. One key thing employers need to weigh is the difficulties they may face in replacing laid off workers when things turn around and business picks up. This becomes more of a challenge when the skills of workers are more refined and specialized. 

Who Has Been Hit?

Among the hardest hit by coronavirus layoffs are industries whose existence rely on people interacting. Clearly, social distancing gets in the way of those in the hospitality industry. That includes hotels, travel, restaurants, and entertainment, among others, and their bottom lines have been dramatically impacted since the advent of coronavirus. In this situation, the majority of employees do not have unique skill sets or specialized training. Although ramping up the workforce will take some effort when the time is right, finding qualified workers, even in a tight market, will likely not be a significant challenge. Layoffs in these fields, therefore, may not result in critical deficiencies when the economy turns around.

Businesses focused on manufacturing or advertising are generally impacted by any recession, as are those involved in freight and delivery. The current coronavirus layoffs crisis is no exception. Although eliminating these positions will save a company money, recognizing that these are skilled workers means that replacing them in an upturn will put you in competition with others for the best workers. It may be better for employers to look at simply reducing workers’ hours and letting workers’ compensation supplement their income during this downturn.

Alternatives to Coronavirus Layoffs

When tough times hit any business, employers are wise to communicate clearly the concerns of the company and keep employees in the loop as plans are being made. Having clear goals and expressing them openly will benefit everyone involved. In order to avoid layoffs, there are strategies that might be considered to get the business through the rough patch:

  • Sharing the pain: If everyone in the company cuts back, from the janitorial staff to the CEO, it may be possible to limp along for a significant period of time. That way the business can stay intact, and be 100% ready to go when things turn around.
  • Crowdsource ideas: If you open the discussion to workers, a variety of money-saving solutions may evolve as employees buy-in to the notion of saving the business.

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Factory Closings Leaving Workers Unemployed

factory closingsFactory closings or mass layoffs? Are you a factory worker who showed up to work one day only to be pink slipped on the spot because the factory shut down? Be advised that there are both state and federal protections for workers just like you. A local employment attorney can help you to understand your rights and ensure that you receive the protections to which you are entitled. When those protections are denied, you may find recourse in the courts.

Factory Closings and The Federal Worker Adjustment and Retraining Notification (WARN) Act

The federal WARN Act has been around since 1989, and requires employers to give workers a minimum of 60 days written notice prior to a covered plant closing or major layoff. Notice must be given directly to impacted workers or to their union representatives.

Factory Closings and What Constitutes a Covered Plant?

WARN regulations apply to businesses that employ 100 employees or more, not including those who work less than 20 hours per week or temporary employees who have worked less then half of the previous year.  These expectations apply to public and private employers, as well as non-profits and quasi-public employers. Exemptions are allowed when temporary plants are closed, or when workers were hired with the understanding that the job was temporary and factory closings are due to a specific project being completed. Also excepted are local, state, and federal entities that provide public services. When layoffs, relocation of more than 100 miles, or a plant closing affects one-third of the workforce and that number includes 50 or more workers, notice must be provided.

Three other exceptions exist:

  • Faltering Company: When a company is seeking capital or new business to stay open, and notice would eliminate or drastically limit opportunities;
  • Unforeseen Circumstances: When circumstances surrounding the business have changed dramatically and were not reasonably foreseeable;
  • Natural Disaster: When a natural disaster such as an earthquake leads to the closing or layoff.

California’s WARN Act is Even More Strict

For California workers, state regulations are even tighter. Companies with at least 75 employees, either part- or full-time, are included as covered employers. When a business closes or significantly reduces operations in such a way that 50 or more workers are impacted over a 30-day window, employees must be notified.

Penalties for Non-compliance

Employers who fail to comply with WARN Act regulations face several penalties:

  • Civil fines of up to $500 per day for federal violations;
  • Civil fines of up to $500 per day for state violations;
  • Back pay for each day of WARN violations;
  • Attorney’s fees.

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