The first thing most organizations do when going through a layoff is create a thorough outplacement process that encompasses a plan for the entire workforce transition. This process usually consists of the following activities:
- Analyzing the amount of workers that need to be laid off
- Selecting the employees that will be let go
- Creating and executing a communications plan
- Executing the notification of layoffs to affected employees
- Delivering severance benefits to employees (severance pay, unemployment benefits, outplacement)
- Onboarding employees into the outplacement program
- Rewriting employees’ resumes
- Setting up employees to work with a career coach
- Helping employees find a new position!
While the entire outplacement process outlined above is correct, it is also fairly high-level. When a human resources executive is planning the details of a layoff, they need more information about laws and regulations that can affect the efficiency and success of their overall plan.
If you're also looking for general advice on crafting an outplacement process, make sure a strong layoff script is a tool in your arsenal. Download ours for free here:
In other words, an HR manager needs to do their homework.
There are several laws that can affect how you conduct a layoff, depending on where you live. For the purposes of this blog, we will focus on four laws that impact United States-based organizations. When preparing for your organization’s layoffs, make sure to research laws and regulations that are specific to your state as well.
Three out of the four laws affect the process of selecting employees who will be let go. These laws are focused on protecting employees from discriminatory hiring or firing practices. The fourth law is meant to regulate how an organization notifies employees, the public, and the government when they decide to have a layoff.
Laws That Impact The Outplacement Process
1) Title VII of the Civil Rights Act of 1964
This is a federal law the prevents employer’s from discriminating against different groups of employees. It provides protection to employees against discrimination on the basis of sex, race, color, national origin, and religion. Thus, employees who belong in one of these categories can be considered part of a “protected class."
This law only impacts organizations that have over fifteen employees, meaning that small business owners are not bound by these regulations. However, we recommend following the regulations regardless of company size as it upholds ethical business practices.
Read more about this law here.
2) Title I and Title V of the Americans with Disability Act of 1990
Similar to Title VII Civil Rights Act, this law provides protection to employees who have disabilities. Therfore, this group has also become a protected class. Employers are not able to layoff employees in any way that unfairly discriminates against those who have a disability.
Also stated in this law is an employer's duty to provide reasonable accommodations to employees with disabilities. Thus, an employer is required to make accommodations for someone with a disability within reason. In terms of layoffs, this means that an organization cannot lay someone off due to an accommodation that could be reasonably met by the company.
Read more about this law here.
3) The Age Discrimination in Employment Act of 1967
This law creates another protected class: employees that are over the age of forty. When selecting the employees that will be let go in a layoff event, it is important to not have a disproportionate amount of this group be over this age.
Similar to previous laws, this does not impact small businesses. However, it's important that all organizations follow this regulation as it is a guideline for ethical business practices.
Read more about this law here.
4) The Worker Adjustment and Retraining Notification Act
Simply referred to as the “WARN” act in the HR space, this law regulates how an organization must give notice of upcoming layoffs. It primarily impacts large organizations. Here are some of the specifics:
- Notice must be given for plant closings, mass layoffs, and sales of business
- Employees that have not worked more than six months in the last twelve months, or who have worked less than 20 hours a week do not count in determining employee counts
- A “mass layoff” consists of more than 500 employees, or 50-499 employees if they make up 33% or more of the entire workforce
- It requires that employers give 60 days notice in advance of layoff events
Read more about the WARN act here.
Implications To The Outplacement Process
When developing an outplacement process, it is important for organizations to take the above laws into consideration. Without proper attention to these regulations, layoffs can result in legal trouble far more expensive than the costs saved from eliminating positions at the organization.
Here are our tips for making sure that you have a successful outplacement process in regards to these laws:
- Have a defined system for selecting which employees you will be letting go and have this system validated by a legal professional. This will decrease your liability throughout the outplacement process.
- Analyze the group of employees you will be letting go. Are any of the protected classes (sex, age, disability, race, color, origin) being disproportionately affected? A good test is to compare the percentage of each of these groups as a part of your total employee population. That percentage should still hold in the final group of employees that you are letting go. For example, if 48% of your workforce is female, then it would make sense for 48% of your laid off employees to be female as well.
- Plan for your event far enough in advance to follow WARN regulations. Providing sixty days notice may seem extreme, but it is legally mandated and ethical. Your employees deserve adequate time to prepare for their next career transition, so provide them as much notice as reasonably possible in your outplacement process.
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