Layoffs, plant closings and reductions in force
Layoffs, plant closings and reductions in force (RIFs) are an all-too-common occurrence in today’s business environment. If your organization is faced with one of these difficult transitions, help is available.
Managing a layoff effectively
While no employer wants a layoff, managing one well can make things easier. A well-managed layoff has the following characteristics:
- There’s a clear plan for conducting the layoff, from deciding who will be laid off to arranging job search assistance for displaced workers.
- The plan is compliant with laws governing layoffs, such as the Worker Adjustment and Retraining Notification ACT (WARN).
- Both workers being laid off and those who remain stay as productive and positive as possible throughout the layoff process.
- There’s an emphasis on good public relations, so the organization’s brand and reputation in the community remains intact.
Rapid Response services
If you are facing a layoff, Rapid Response, a federal program available to qualifying organizations, can help you manage the process effectively. Rapid Response has two key functions:
- Provide employers with access to a skilled labor pool in their area
- Provide immediate assistance to companies facing layoffs
Your Rapid Response transition team will meet with you; work one-on-one with displaced workers to discuss unemployment insurance benefits, job placement services, and training options; and help you coordinate with other services in your area.
Many states have Shared Work programs with the goal of avoiding layoffs during a temporary slowdown. Employees receive partial unemployment benefits while working reduced hours.
Contact your state’s Unemployment Insurance (UI) program to learn if your state participates in the Shared Work Program. You can also review general information on the UI Program and UI taxes at the federal and state levels.
To learn more about Rapid Response, UI, or other workforce issues, contact your local American Job Center. If your company is not eligible for Rapid Response, other services may be available to you and your laid-off workers.
- COBRA Continuation of Benefits Coverage
- What is COBRA Continuation Coverage?
- Who is Entitled to Continuation Coverage?
- COBRA Notice and Election Procedures
- Benefits under Continuation Coverage
- Duration of Continuation Coverage
- Qualifying Events and Qualified Beneficiaries
- Maximum Periods of Continuation Coverage
- Who Pays for Continuation Coverage?
- Coordination with Other Laws
Upon termination of employment, some workers and their families (who might otherwise lose their health benefits) have the right to choose to continue group health benefits provided by their group health plan for limited periods of time. Employers may also be required to provide notices to their employees under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Health Insurance Portability and Accountability Act (HIPAA). For information on COBRA and HIPAA, see Benefits/Health.
Workers who are unemployed through no fault of their own (as determined under state law), and meet other eligibility requirements, may be eligible to receive unemployment benefits. Unemployment insurance payments (benefits) are intended to provide temporary financial assistance to unemployed workers who meet the requirements of state law. Under the Federal-State Unemployment Insurance Program, each state administers a separate unemployment insurance program within guidelines established by federal law. See Benefits/Unemployment Insurance.
Equal employment opportunity (EEO) laws prohibit specific types of employment discrimination. Collectively, these laws prohibit discrimination in most workplaces on the basis of race, color, religion, sex, age, national origin, and status as an individual with a disability or a protected veteran. In general, if the reason for termination is not because of discrimination on these bases, or because of the employee’s protected status as a whistleblower, or because they were involved in a complaint filed under one of the laws enforced by the U.S. Department of Labor (DOL) (see Whistleblower and Non-Retaliation Protections), then the termination is subject only to any private contract between the employer and employee or a labor contract between the employer and those covered by the labor contract.
Protecting the employment rights of veterans is also a responsibility of DOL’s Veterans’ Employment and Training Service (VETS). VETS protects service members’ reemployment rights when they are returning from a period of service through its administration of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). Additional information related to veterans can be found on the Compliance Assistance – Veterans page.