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Lay-Off due to Economic Difficulties - Essay Example

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Lay-Off Due to Economic Difficulties Date Lay-Off Due to Economic Difficulties Case Scenario Given that Company ABC has been affected by economic difficulties, management is deciding on laying off as much as 25 percent of its 100 employees…
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Lay-Off due to Economic Difficulties
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Download file to see previous pages In this regard, as a human resource professional tasked to evaluate and propose recommendations for the situation, the following discourse would initially present a description of the facts, the relevant law, application of the law, and suggestions of handling the issue. Recommendations would be proposed in the form of a memo addressed to the supervisor. Description of Facts 1. Advance Notice of 60 calendar days Company ABC employs 100 employees and is therefore covered by the Worker Adjustment and Retraining Notification Act (WARN) in cases where lay-offs are being reflected on at least 33% of their work force. Supposedly, ABC must provide a 60-day notice to the employees being laid-off. But since ABC plans to lay-off only 25% and that the reason for laying off is economic difficulties, the 60-day required notice is thereby not required. In one of the frequently asked questions posted in the US Department of Labor, the exception to giving a 60-day notice is hereby addressed: “if an employer believes their situation is the result an economic crisis, it may apply the unforeseen business circumstance exception; however, there could be a burden on the employer to prove why it could not plan 90 days in advance” (U.S. Department of Labor, 2010). During the termination meeting, the only time period indicated was that the benefits of the employees would be terminated at the end of the month. Therefore, there was no stipulated number of days from the time the employees were informed up to the time their services would be terminated. This does not violate any labor law because as the Department of Labor disclosed, “the Fair Labor Standards Act (FLSA) has no requirements for notice to an employee prior to termination or lay-off. In certain cases, employers must give the workers advanced notice of mass layoffs or plant closure. The Warn Act provides specific information on advance notice, employer responsibility and workers rights during mass layoffs or plant closure” (U.S. Department of Labor, N.D.). 2. Severance Pay Company ABC will offer a severance package that depends on gender and members of the union. As indicated: “because men generally are the heads of households and support dependents, ABC is going to offer them more severance pay than women.  Some employees are union members and their CBA provides less severance than the Company plans to offer, so management is going to be nice and give them the higher severance amount” (Case Facts, N.D., par. 1). According to Employee Issues (2011), under the Fair Labor Standards Act (FLSA) and state equivalents, “severance pay is generally considered to be a matter of agreement between employers and workers or employers and unions” (Employee Issues.com, 2011). 3. Age of Employees being Laid-Off By suggesting the inverse seniority policy, ABC could face violations of wrongful termination due to Age Discrimination in Employment Act (ADEA). The U.S. Equal Employment Opportunity Commission revealed that “the law forbids discrimination when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, and any other term or condition of employment” (U.S. Equal Employment Opportunity Commission, N.D. ). Application of the Law Since ABC is planning to lay-off a lesser percentage of employees than the prescribed 33% threshold, it is not covered by the 60-calendar days notice for the employees due to be laid-off. However, their ...Download file to see next pagesRead More
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