Six months ago, I predicted a renewed emphasis on reduction in force laws and regulations with the possibility of an economic slowdown looming. With six months left to go in the year, I’m still feeling good (if you can feel "good" about such things) about that prediction.
Is the economy still on the yellow brick road or are we walking deeper into the forest filled with lions, tigers and bears?
The statistics from the Equal Employment Opportunity Commission do not paint a rosy picture.
The numbers of discrimination claims filed with the EEOC are up.
And up by a lot.
In fact, the EEOC reported a 21 percent increase in charges for the first quarter of 2008, over the same period last year.
So what can employers do? I talked a few weeks ago about one aspect of reductions in force — namely compliance with the OWBPA (Older Worker Benefit Protection Act) and how compliance with that law can avoid one pitfall associated with a reduction in force.
But another law that is commonly misunderstood is the WARN (Worker Adjustment and Retraining Notification) Act. WARN is not a mandatory severance law; in other words, it doesn’t mean that employers need to give employees severance when they are affected by a mass layoff or plant closing.
What WARN does require is that the employer give notice to employees who may be affected by a plant closing or mass layoff. The Department of Labor has prepared this fact sheet for employers to answer some of the basic questions. It is a law that is, frankly, fairly easy to comply with, and yet there are still some employers who are facing class actions for their alleged failure to comply.
In addition to notice to employees, the employer must also notify the Connecticut Department of Labor of its proposed actions. The state then posts them in monthly reports available here. You can view July’s report here.
What is fascinating about the reports thus far is that Connecticut has, as of now, avoided some of the mass layoffs that have plagued some of the other states. The June reports for Connecticut show only 400 or so employees statewide who received WARN notices. Moreover, numbers released over the weekend show that Connecticut employers have added jobs, not eliminated them. Whether this trend continues will be an item to watch for in the second half of 2008.
In an upcoming post, I’ll highlight some of the particulars of WARN in more detail. Until then, try to avoid the fields of sleeping flowers.