Blog Layout
Furlough and Reduction in Force Considerations
Cassie Brown • May 28, 2020
Some things to consider if your company is considering a furlough, layoff or reduction in force.
I wrote a blog
on April 13, 2020, where I noted that as of that date, 12 million Americans had applied for unemployment benefits. Since then, only six (6) weeks ago, that number has almost quadrupled. As of this week, almost 40 million Americans have applied for unemployment benefits. Many people have been laid off, furloughed, or positions have been eliminated entirely, companies are closing, large and small, and the ‘new normal’ we keep hearing about is hard to imagine at this point.
If you are an employer having to make these tough decisions, it can be gut wrenching. As an employee, hearing this message can be devastating and hurtful, no matter what the context of the situation may be that lead to the decision. I’ve been on both ends of these types of discussions and both feel horrible.
What you can do as an employer who has to deliver these messages to the workforce, is plan everything out, practice what you are going to say, and be respectful and compassionate with those who are leaving, as well as those who are staying.
Here are some things to consider if you are going to furlough some or all of your workforce:
- Will everyone furlough at the same time, or will you alternate weeks on and off for coverage purposes?
- Will you allow employees to use any accrued time off (PTO/Vacation) during the furlough? In some states, this may be regulated.
- If the furlough falls on a normal paid holiday, will they be paid for that holiday or not?
- How will they continue to pay for their portion of benefits, or will you pay for that for them while on furlough?
- Do some groups need to furlough longer than others, be consistent in how you select who will be longer (by department, group, etc.).
- Will you turn off access to buildings, systems, etc., or just be clear that they are not to work?
- Will you provide info on how to apply for unemployment benefits?
- Ensure you have personal email/phone if you need to communicate anything about RTW status, which might change, depending on how things proceed.
- Remind employees of any access to EAP benefits through an EAP program, or other services through your medical provider. EAP is typically more inclusive of all household members of all employees, no enrollment necessary. If you are delivering this message to a large group, you may want to consider having an EAP rep or two on site or available via phone throughout the day/week.
- Things to provide furloughing employees: letter outlining dates/ RTW date, etc. can/cannot used accrued PTO (may vary by state), what happens to all benefits, how to apply for UI, etc.
If you are considering a reduction in force (more than one person’s position being eliminated), here are some things to think about:
- Are you subject to the WARN Act?
- Any other local, state or federal laws need to be considered?
- What is your business case for the positions being eliminated?
- How will the positions being eliminated be selected? Should you consider a voluntary plan?
- Who needs to approve the plan, know about it, deliver upon it (RACI chart)?
- Do you have a severance plan? If not, will you provide severance to those people whose positions are eliminated?
- If so, severance can consist of a combination of: severance payment (usually based on YOS), benefits continuation, outplacement assistance, financial planning and additional bonus payments.
- Who will calculate and check these benefits, who will create the documents? Can they be automated in any way?
- Any special considerations need to be made for termination dates (close to retirement, benefits considerations?)
- Will you need EAP or outplacement resources onsite for date of notification? Don’t discount those whose positions are not impacted and the effect of survivors guilt.
- Do you need a communications plan in place for what is happening and why?
- Do you have OWBPA obligations for any workers 40 or older whose positions are impacted?
- Who will deliver the message to the employees whose positions are being eliminated, and how?
- I recommend one-on-one meetings, face to face, if possible. In this COVID time, direct face to face might be difficult, I would still do a video call, at a minimum. I also recommend that the person delivering the message be trained, and practice if they are new at these types of conversations. It is a great idea to have talking points for the meeting, and be compassionate and understanding of the person’s feelings when they are notified.
An action like this takes thoughtful planning and consideration, working with experienced employee relations and labor law attorneys. There are many things to think through, and this list outlines just a few of those things, which will vary by your type of business and workforce structure.
Let me know if you are considering any separations or furloughs, I have many years of experience and can help you navigate to the best outcomes for your business and your employees.
Thankful. In this year filled with so many unknowns and changes to the way we have to “be” with one another, it is perplexing to some to think about the things we are thankful for this year. I, however, didn’t seem to have any issue coming up with things I am thankful for in 2020. For the first time since my children were very young, (a time in our lives when everything was chaos most of the time with school, homework, after school activities, etc.), we sat around a table with each other and enjoyed dinner and “adult” conversation. My two college-aged sons came home for Spring Break in March and didn’t leave, moving to 100% remote learning and 100% in our refrigerator and pantry. We played games, had movie nights, worked on puzzles, told stories, found old home movies from when they were babies, and gained new appreciation for each other. I am thankful for this time with them. My husband and I both expanded our businesses, and while I became an expert on all things COVID, he became PMP certified. I worked on expanding my network, continuous learning, learning new industries, and mentoring others in the HR community. I am thankful that we are both working, supporting each other and supporting local businesses. We had powerful conversations with each other, with family and friends, with those who think like us and those who do not, with people we love, as our world stood divided over politics and racism. I am thankful for those who engage in respectful dialogue on these topics, who seek to understand, learn and share. We miss our friends and family we don’t get to see, and the “normal” we had been accustomed to all these years. I am thankful for the work we do to keep all of us safe, knowing that we will see one another soon, that this too shall pass. We are flexible and resilient, hopeful and compassionate, and most of all, thankful for the ability to choose how we show up every day. This week I choose to be thankful.
Don't tell me what you think/believe, show me.
Do you need a Politics in the Workplace Policy? Is it OK to talk about politics at work? Have you had issues when people talk about politics at work? Do you allow employees to express their political opinions at work through decor, pamphlets or banners/buttons? Do you know what you can/cannot restrict at work?
Latest news
Thankful. In this year filled with so many unknowns and changes to the way we have to “be” with one another, it is perplexing to some to think about the things we are thankful for this year. I, however, didn’t seem to have any issue coming up with things I am thankful for in 2020. For the first time since my children were very young, (a time in our lives when everything was chaos most of the time with school, homework, after school activities, etc.), we sat around a table with each other and enjoyed dinner and “adult” conversation. My two college-aged sons came home for Spring Break in March and didn’t leave, moving to 100% remote learning and 100% in our refrigerator and pantry. We played games, had movie nights, worked on puzzles, told stories, found old home movies from when they were babies, and gained new appreciation for each other. I am thankful for this time with them. My husband and I both expanded our businesses, and while I became an expert on all things COVID, he became PMP certified. I worked on expanding my network, continuous learning, learning new industries, and mentoring others in the HR community. I am thankful that we are both working, supporting each other and supporting local businesses. We had powerful conversations with each other, with family and friends, with those who think like us and those who do not, with people we love, as our world stood divided over politics and racism. I am thankful for those who engage in respectful dialogue on these topics, who seek to understand, learn and share. We miss our friends and family we don’t get to see, and the “normal” we had been accustomed to all these years. I am thankful for the work we do to keep all of us safe, knowing that we will see one another soon, that this too shall pass. We are flexible and resilient, hopeful and compassionate, and most of all, thankful for the ability to choose how we show up every day. This week I choose to be thankful.
Don't tell me what you think/believe, show me.