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‘Termination’ Category

Apr03

California RIF

California RIF. Would it be illegal to lay off employees who make the most money. Regardless of their seniority, age, quilifications, disiplinary record or lack of.
Also, would it be illegal to get rid of full time employees in a RIF, then hire new employees to do the exact same job function, but as per diem or on call only status.

Reductions in force or layoffs are considered by employers as a cost cutting strategy. If no alternative options are feasible HR/Management are faced with the daunting task of deciding which employees must be let go.

Be sure that company policy, past practice, employment contracts or collective bargaining agreements don’t establish a standard for which employees must be laid off. For example, many agreements state employees must be laid off in least seniority order.

It’s important to establish clear criteria for which employees will be laid off. Quantifiable or objective criteria like seniority, employee classification i.e. full time/part time/on call, or clear productivity numbers are safest. Subjective criteria like quality of work or skills tend to be riskier. Using employees’ salaries as the criteria alone may be lawful; however, employers must ensure doing so does not result in disparate treatment or have an adverse impact on protected groups. For example, older senior workers tend to make more money than their younger entry level co-workers; so, laying off only highly paid employees over the age of 40 could be perceived as age discrimination. Employers should clearly document the selection criteria used and the justification for business necessity.

Employers have to plan for continuing operations during and after layoffs. As previously stated, laying off employees based on their classification is lawful. Hiring per diem employees at lower rates to assume some of the work responsibilities is also lawful as long as the employer is basing the decision on business need and not a discriminatory factor. Using the example above, if the employer then decides to hire on call staff in their twenties the laid off employees may have grounds for an age discrimination lawsuit. The safe thing to do when filling jobs held by laid off employees is to make the employees aware of the new positions even if the positions are less hours and less money. There is no legal requirement to do this; however, doing so and documenting such efforts reduces the risk for perceived discrimination.

Lastly, employers must be aware of federal and state laws applying to group or mass reductions in force such as the federal Older Workers Benefit Protection Act (OWBA) and Worker Adjustment and Retraining Notification (WARN) as well as California’s Layoff Protection Act.

April 3rd, 2014, 9:59 AM |  Posted in: Termination |
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Mar06

Unemployment due to a Voluntary Separation Program

My company has initiated a Voluntary Separation Program which has been offered to many US employees. My question is in the state of Texas, is a person eligible for unemployment benefits if they accept an offer for a compensated Voluntary Separation package. Our colleges in MA have recently been informed that they are eligible.
Thank you!

Unemployment insurance programs are administered by each state which establishes the procedure and eligibility requirements. In general, unemployment insurance provides unemployment benefits to workers who are unemployed through no fault of their own. Involuntary separation can be interpreted differently depending upon the reason for the separation.

Voluntary separation programs are used by employers as a means of downsizing their workforce. Such programs facilitate an employee’s early retirement or voluntary resignation and often offer severance benefits. By implementing voluntary separation or reduction in force programs, employers may avoid the decision of which employees to layoff; thus, reducing the potential for disgruntled employees and decreasing the risk of unlawful termination claims.

Since employees voluntarily resign under these programs, employers commonly assume that the employees will not be eligible for unemployment benefits. This is not always true. Generally, unemployment offices will take in to account the reason an individual resigned, as is the case in Texas.

In Texas, an individual may be eligible for unemployment benefits if he resigned for good cause. Resigning for a good cause work-related reason means a situation that would cause an individual who wants to remain employed leave his employment. General examples include unsafe work conditions or a significant change in the hiring agreement. Resigning instead of risking being laid off in order to receive a severance package may constitute a good cause resignation. Additionally, the Texas Workforce Commission defines a work separation to be involuntary if initiated by the employer. A voluntary separation program is clearly initiated by the employer. Moreover, some employers assume that if they offer severance pay the employee will not be eligible to receive unemployment benefits. Severance pay doesn’t disqualify an individual from receiving unemployment benefits in Texas.

March 6th, 2014, 10:05 AM |  Posted in: Benefits, Labor Laws, Termination |
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Feb25

Unemployment Benefits

When an employee is terminated in an at-will employment state, what determines their eligibility for unemployment benefits and how does that affect the employer?

In almost all states employers are able to adopt at-will employment policies. At-will employment means an employee can be terminated from his employment for any reason without cause except for reasons considered illegal under federal and state regulations.

Unemployment insurance programs are administered by each state’s Department of Labor with guidelines established by federal law. Eligibility for unemployment benefits varies by state. In general, unemployment insurance provides unemployment benefits to workers who are unemployed through no fault of their own. Involuntary separation can be interpreted differently based on whether the employee was laid off, resigned, or was fired.

 An employee who was laid off or part of a reduction in the workforce will be eligible for unemployment. However, an employee who resigned or quit may not be. Generally, a worker who resigned for good cause, meaning continuing employment would actually have been an increased hardship, may receive unemployment. For example, an employee who resigned to avoid continued harassment or unsafe work conditions would normally receive unemployment benefits. Conversely, an employee who resigned because he didn’t get a raise or wasn’t happy with the work his was doing would normally not receive unemployment.

Any employee can file for unemployment benefits even ones who were terminated. A terminated employee may receive unemployment if he was fired for minor or unintended violations such as poor judgment or being late a few times. Major misconduct such as harassment or stealing will generally render a worker ineligible for unemployment.   

Most states have a claims process during which the DOL requests information regarding the worker’s employment, reason for leaving the company, and if the employer has any reason why the worker shouldn’t receive unemployment benefits. It is then up to the employer to contest the worker’s eligibility.  It’s important to be mindful that disputing a worker’s eligibility may be time consuming and will often lead to the worker being resentful of the employer. So, consider the employee, circumstances surrounding his departure, and potential backlash prior to contesting his unemployment eligibility.

The more unemployment claims against an employer will often increase the employer’s unemployment insurance rates. Employers pay for unemployment insurance not employees. Each claim has the potential to financially impact the employer. The size of the company, type of workers claiming, length of employment, and amount of benefits awarded all affect just how much impact an employer will endure.  

Keep in mind that each state has its own UI regulations and process. Feel free to re-post you’re question with the specific state listed and we can more specifically address your inquiry.

February 25th, 2014, 9:19 AM |  Posted in: Benefits, Termination |
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Jan27

Employee Termination while on Sick Leave

Employee services no longer needed. Currently on sick leave but decision has been made to release employee from service. State is at will and no employment contract. Should HR wait until employee returns from sick leave or can notification be given immediately.

Any employee on sick leave, whether the employee is covered by the Family and Medical Leave Act (FMLA) or not, must be treated in the same manner as if he was not on leave. It’s important not to treat an employee on leave any differently or the company could be subjected to discrimination charges and a lawsuit. The employee should be informed of the decision as soon as the decision is finalized or at the same time other affected employees are notified.

An at-will employment relationship can be terminated at any time including while an employee is on leave. The business rationale for any layoff should be clearly documented. Specifically, why the layoff is necessary and the selection process for the staff affected. If the layoff is occurring solely because the employee is on leave and would not have happened if he wasn’t, then the company could be at risk for violating anti discrimination laws including the Americans with Disabilities Act (ADA). Using protected characteristics, such as race, sex, religion, and disability, as selection criteria for layoffs is illegal. Ensuring and being able to prove that legal criteria such as seniority or productivity is being used in the selection process will be critical if an employee files a discrimination claim. Even if the company claims the layoff is for genuine cause, there must be supporting evidence to substantiate the decision.

January 27th, 2014, 1:35 PM |  Posted in: Human Resources Management, Termination |
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Jan09

Termination of Seasonal employee

I do not have a background in human resources and have made a decision not to have one of my seasonal employees return this year. Do I have to justify my decision – provide a reason to the employee? Or, can I just say that he/she is no longer needed? This is strictly a business decision and there is no prejudice against this person.
Thank you.

There is no federal law that requires an employer to inform an employee of the reason he/she is being terminated. The majority of states (I believe Montana being the only exception) presume employer to employee relationships to be at-will, unless otherwise noted. Employment-at-will generally means that an employee can be fired from his employment for any reason without just cause. Of course, there are illegal reasons to fire an individual. It’s a violation of federal law and many state laws to terminate a person’s employment due to race, gender, disability, religion, or age for individuals over 40 years old. Some states further identify discrimination criteria as marital status or gender identification. An employee cannot be fired for filing a complaint against the company or for refusing to take a polygraph test in most industries. Additionally, federal law prohibits most employers from terminating an employee based on his alien status, providing the employee is eligible to work in the U.S.

Even though there is no legal mandate to explain the termination to the employee, it’s good practice to do so. A brief explanation can be as you already suggested, “Your service is no longer needed” and nothing else. You don’t have to justify the reasoning. Offering more details can quickly lead to an argument. Be direct but not cold. It’s almost always recommended to conduct the termination in person; however, for a seasonal employee it would be acceptable to inform the employee of your decision via phone. Even though you want to keep the conversation short, be prepared for the employee to get upset. If he does, inform him that you understand that he’s upset but the decision is final. Again, be direct but not too cold.

Remember to document the reason for the termination. You may need to explain your decision at a later date if the employee files for unemployment benefits. Also, documenting the reason is good practice in case the employee re-applies next season.

January 9th, 2014, 7:12 PM |  Posted in: Human Resources Management, Termination |
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