Comply with the law. If the explanation for a RIF is "we're out of money," don't give huge bonuses to senior executives shortly before or after the RIF. The discrimination and benefits/pension laws (discussed above) also affect voluntary RIFs and ERIs. WebEmployer's Reduction in Force Checklist. Explore possible union issues. RIFs may occur for several reasons, including when a business pivots or restructures, shutters an office or branch, undergoes a merger or acquisition, moves to a new location, or faces financial hardship. Examine what locations and/or positions will be terminated. Here's how employers and employees can successfully manage generative AI and other AI-powered systems. It is important to assess ERISA issues early in the planning process and consider such questions as: are the terms of the proposed voluntary RIF program consistent with the terms of the employers retirement plan and applicable benefits laws? Unless an employer has competent professionals on staff, it should ensure, in advance, that there is ready access to such advisors familiar with RIF-related issues. The employees, the EEOC and the jury will not like you. WebThe following is a checklist of legal and practical issues to be reviewed in connection with a reduction in force. It often is helpful to state the goals more specifically (such as "reduce payroll expenses in the finance department by 10 percent" or "convert the ketchup production line to hand sanitizer production") and to put the goals in writing so decision-makers will have an ongoing point of reference in carrying out their missions. If the explanation for a RIF is were out of money or we have too many people, dont give huge bonuses to senior executives or engage in major recruiting efforts shortly before or after the RIF is announced. The discrimination and benefits/pension laws (discussed above) also affect voluntary RIFs. Is the RIF going to eliminate job titles (perhaps by combining two jobs into one) or reduce the number of people in certain jobs, or both? Partner with an industry expert to ensure your reduction in force goes as smoothly as possible for everyone at your company. These alternatives to RIFs may not be as cost effective but they likely are less risky. Employers should conduct rehearsals (perhaps even role-playing) of the exit meetings in order to confirm that the selected managers are up to the task and know the script.. Gather materials necessary for the exit meetings. RIF Checklist: Key Issues in Managing a Reduction-In-Force There should be two people representing the company in the exit meeting: a spokesperson and a non-speaking witness. Perform a disparate impact analysis by comparing the demographics of the workers preliminarily selected for discharge with those who will be retained in order to ensure that employees in protected classes are not inadvertently being selected for separation at a higher rate than their percentages in the workforce. RIF-related laws include: Gather but selectively disseminate data. The most common advantages of furloughs over RIFs include easier employee departures (because, most often, the federal/state "plant closing"/"mass layoff" notifications need not be given), easier returns to work (because those personnel have remained in the payroll/benefits systems), and the preservation of employment relationships that might be vital to the employer's recovery and return to normalcy. If departing employees have continuing obligations to the company (e.g., transition assistance, confidentiality, non-disparagement or non-competition), paying severance in installments over time rather than in a lump sum will encourage compliance with the ongoing obligations. The Purpose of VSIP The Voluntary Separation Incentive Payment (VSIP or buyout) Authority allows agencies to offer lump-sum payments to employees who are in surplus positions or have skills that are no longer needed in the workforce, as an incentive to separate. A Ensure that the overall business and its individual departments and production lines can continue to function after the RIF (the use of before and after reporting-relationships and staffing charts often is helpful), and that the RIF is not eliminating persons with critical skills. The RIF process should be strictly confidential until formally announced. It often is helpful to state the goals more specifically (reduce payroll expenses in Finance department by 10 percent; eliminate ketchup bottle production line) and to put the goals in writing so that the decision makers will have an ongoing point of reference in carrying out their mission. Our RIF Checklist is the starting point to planning a strategic and compassionate layoff. Employee benefits laws: The federal pension laws (including ERISA) impact RIFs. Reduction in Force Checklist: How to Stay on Track During a RIF These alternatives to RIFs may not be as effective in reducing costs, but they may be less risky. Click "accept" below to confirm that you have read and understand this notice. RIFs implicate human resources, benefits, tax/finance and legal issues. The most common RIF goals are to reduce payroll expenses and to better align personnel resources with available work. Points to consider for these voluntary separations include the following: Identify the ideal number of personnel to be released from individual departments. Such ratings and rankings should be as objective as possible, and employers should compare an employee's RIF-related ratings/rankings to the employee's prior performance evaluations to ensure there are no suspicious, inexplicable discrepancies). Be careful about entrusting sensitive, where the bodies are buried information to anyone that might be released in the next RIF. Prepare papers. My Account. Identify the ideal number of personnel to be released from individual departments. Discharged workers seem more ready to accept their fates (and severance packages offered in exchange for waivers of claims) if they know in advance that the organization is in financial trouble. Determine whether the severance scheme (particularly any installment payout protocol) is a "plan" governed by the federal Employee Retirement Income Security Act (ERISA) and, if so, comply precisely with its requirements. 2. Conferences About Newsroom Careers. Ensure confidentiality. Please enable scripts and reload this page. Thus, employers should carefully assess whether their proposed severance pay schemes are subject to ERISA and how that laws potential advantages compare to the disadvantages associated with statutory compliance. RIFs typically are "involuntary" (i.e., the employer identifies the employees to be discharged) or "voluntary" (i.e., the employer offers a severance package to a specified group of employees who individually decide whether to take the package and leave the company). A list of employees, showing their genders, age, minority/disability/whistleblower status, leave/workers compensation status and other characteristics protected by law will be necessary for the disparate impact analysis (discussed below). You have successfully saved this page as a bookmark. RIFs are frequently attacked for being discriminatory against older workers. Identify decision-makers. or "Is this fair?" It cannot, by its nature, cover all of the nuances or explain in complete detail all aspects of the RIF process, or describe the variations among state laws, and of course a checklist is no substitute for situation-specific advice from a RIF-experienced employment lawyer. Train senior staff and the "exit team" on how to respond to threats and violence. Reducing employees' pay or hours, or sending them home on unpaid furloughs for weeks (or months), often are effective short-term measures to preserve cash, capital and employment relationships but sometimes are simply insufficient to ensure the long-term survival of a business. The reduction in force will be based on business necessity by job category and then by performance ratings within the job category. The usual issues are much more complicated now during the 2020 COVID-19 crisis with the overlay of the rapidly enacted and untested pandemic laws and regulations. Investigate any apparent demographic disparities in the preliminary list (e.g., Hispanic women or workers over 40 being selected at a higher than expected rate) and, if necessary, adjust the preliminary list (and perhaps repeat the "disparate impact" analysis on the revised list). A single designated spokesperson to answer all post-RIF questions from both inside and outside the company is often the most effective way to disseminate accurate and consistent information. Involuntary RIFs give employers more control over which workers leave but are more often the basis for employees' lawsuits. Reduction in Force The employees need not be given all the facts about the RIF but what they are told must be truthful. There are specific federal statutory requirements for waivers of age discrimination claims in a RIF, including, most notably, that the employee be a) expressly advised in writing to consult a lawyer before signing the agreement; b) given 45 days to consider the agreement before signing it (a period the employee can waive voluntarily); c) given seven days (a period that cannot be waived) after signing the agreement to revoke it (that is, the waiver of age discrimination claims is not effective until the seven-day period passes without revocation); and d) given disclosures consisting of general information about the RIF decision process as well as specific information about the job titles and ages of persons selected and not selected for separation. The checklists included in this template are not limited to other activities that may be relevant for your specific company, industry, or financial situation. An involuntary RIF often can be conceived, planned and implemented in seven to 10 days in smaller organizations, but larger employers will require more time to ensure that the process is thoughtful and legally defensible. !.E) Checklist
Request for RIF Memorandum
Formally assessas part of the ongoing planning processthe risks of violence, sabotage and theft by employees who will be RIFd. This demographic data is very sensitive so it should have very limited circulation and should NOT be given to the decision makers before they identify workers to be discharged: this is essential so that it cannot later be claimed that an employees protected status was any factor in his/her selection for separation. Train senior staff how to respond to threats/violence. Severance pay generally is not required by law unless a) the employer previously has committed to pay it (by employment contract, collective bargaining agreement, or severance pay plan), b) there is a state or local requirement, or c) it is being paid as "consideration" to obtain an employee's signature on a release/waiver of claims against the employer. Pay. COVID-19 RIF Checklist: Key Issues to Consider in Reductions in Force Holland & Knight Alert William B. deMeza Jr. eliminated with the termination of employment. WebREDUCTION IN FORCE PLANNING Checklist of Considerations and Tasks to Complete Involve your employment and labor lawyer early on in the process. If a lawsuit arises from the RIF, it is very likely that those papers will have to be furnished to plaintiffs counsel and could become courtroom exhibits in the litigation. RIF (Reduction in Force) Checklist for HR Managers - RiseSmart Reduction in Force; Presidential Rank Awards. Checklist: Preparing For Your Reduction-In-Force - ACC The meetings should be short, simple, clear, informative, unemotional and final. Determine whether any employees to be laid off hold visas or have applied for green cards. Please confirm that you want to proceed with deleting bookmark. Layoff Selection. Featured. Subject: Reduction In Force Approval Procedures and Managerial Checklist Reference 62 BIAM 11.43 Reduction In Force - requirements for requesting a Reduction In Force has changed for concurrence and approvals, however the process and the required documentation has not changed. Ensure, to the extent possible, that the supervisors of all departing employees are in agreement with their personnel on the list (to ensure that all management personnel "are on the same team" and prepared to defend any employee's claims). Aspects Explained - Video Game News, Reviews, and Walkthroughs Equal Employment Opportunity Commission (EEOC) and the jury will not like you. WebChecklist: Preparing For Your Reduction-In-Force Voluntary or involuntary layoff? Economic Security Act (CARES Act), often exceeds $1,000 per week for up to 26 weeks. Communication. Civil Rights, Discrimination and Retaliation, OSHA, Workplace Safety and Whistleblower Claims. Discharged workers seem more ready to accept their fates (and severance packages offered in exchange for waivers of claims) if they know in advance that the organization is in financial trouble. They are mentioned in the following discussion focused on RIFs. Need assistance with a specific HR issue? Develop a preliminary list. 1. Request RIF Approval . Other Benefits. Manager Resource Guide UNC-Chapel Hill Manager Layoff Resource Guide (Rev. The employees need not be given all the facts about the RIF and the reasons for it, but what they are told must be truthful. SHRM's HR Knowledge Advisors offer guidance and resources to assist members with their HR inquiries. Employers can legally limit voluntary RIFs to employees who have reached a certain minimum age, to certain departments/work groups, to personnel with certain years of credited service and to certain time periods (e.g., departure during a specified but limited "window" period). Employment, Checklist - Employer's Reduction in Force Checklist Will the RIF or ERI create any deferred compensation/Section 409A issues? Formally assess as part of the planning process the potential for violence, sabotage and theft by employees to be included in the RIF. Find out what to include when preparing employee separation All Insights; Guides; Gartner Business Quarterly; Strategic Planning; Generative AI; Leadership Vision; Recession Guidance; Future of Work Reinvented; Sustainable Business Strategy; Keep track of everything you need to determine before conducting a RIF. The "continuation of group medical coverage" (COBRA) notices should also be provided as required by the federal statute. USERRA There also can be state law requirements for waiver agreements, including the obligation to include specific language in the separation agreement. Limit the dissemination of sensitive documents and data, and password-protect electronic RIF documents and communications among decision-makers and advisors. Provide these materials to managers who will be conducting the exit meetings. Provide these materials to managers who will be doing the exit meetings. Determine whether any employees to be laid off hold visas or have applied for green cards. The management personnel transmitting the bad news to the departing employees are the company so it is essential that only calm and capable managers be selected for the task. There are other types of severance benefits that often are provided, including reimbursement of employees premiums for continuing group health coverage, outplacement assistance/training, eligibility for recall to work, more-than-neutral letters of reference, etc. Using the agreed-upon selection criteria, the decision makers should prepare a confidential preliminary list of jobs/employees to be eliminated in the RIF. There are separate whistleblower laws in many states. - Objectives for your RIF and the task force to run the process, - Criteria you can use to determine layoffs, - One place to track all benefit policies for laid off employees, - Plan to communicate RIF to employees, 3rd parties, and the public. Thus, employers should consider telling workers about economic difficulties before a RIF is announced. If the company anticipates violence or disruption, notify building security or law enforcement in advance of the RIF (but recognize that some departing workers will be offended or become unruly if they suspect they are being disrespected by an obvious on-site police presence). Impermissible criteria, in addition to the characteristics protected by law, include "whistleblowing" (not only the employee's prior filing/voicing of claims of employment discrimination but also the employee's claim that the company is not complying with the laws regulating its business), use of disability or FMLA leave, filing a workers' compensation claim, and supporting or affiliating with a union. Reductions in force are typically permanent because the roles of those let go are usually. Give management the contact information for security and law enforcement personnel. Employers sometimes conduct rehearsals (perhaps even role-playing) of the exit meetings in order to confirm that the selected managers are up to the task and "know the script.". Depending on the terms of the employer's benefits plans, furloughed employees may remain eligible for benefits.
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