reduction in force checklist

Keep the RIF working papers and analyses in locked storage when not in use. 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. Keep such rehiring possibilities in mind in planning a RIF when (a) setting severance pay (because it may be awkward to rehire an employee who was given a huge severance package in a recent RIF) and (b) releasing employees with critical but scarce skills (because, once gone, employees may not come back when the company needs them).Reductions-in-force are never easy or pleasant. Analyze pre-layoff statistics in consultation with counsel. We can help! Employees can be informed about the future (as it then appears to management), warned that there will be a normal adjustment period in light of the reduced jobs/staff and friends, and enlisted to help the organization stabilize and prosper. Many statutes impact RIFs. Further, given the rapid and continuing evolution of the federal, state and local laws addressing the COVID-19 pandemic, it is important that employers pay attention to the news and frequently update their strategies. Employers can offer lower severance benefits to retiring older employees under very limited and complicated circumstances if otherwise consistent with any existing retirement plans. Employee benefits laws: The federal pension laws (including ERISA) impact RIFs. Reduction in Force What if only the best workers opt to leave? RIFs are useful but often are expensive and sometimes lead to lawsuits. Employers can offer lower severance benefits to retiring older employees under very limitedand complicatedcircumstances if otherwise consistent with any existing retirement plans; a competent employment/benefits lawyer must be consulted if it is planned that the inducements for a voluntary RIF/ERI will vary based on age. Please log in as a SHRM member before saving bookmarks. Look to the future. For example, an employer likely will have to offer the holder of a H-1B visa terminated in a RIF the reasonable cost of returning to the home country. or "Would a stranger understand and accept this?" Such technology is already a part of many workplaces and will continue to shape the labor market. Further, RIF-related lawsuits often are easier for companies to win if there are recent detailed, specific, accurate, fact-based and written job performance evaluations of the released employees (providing tangible evidence they were not performing as well as workers who were retained). 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.. The laws are numerous, often complex, sometimes conflicting in their requirements and include prohibitions with harsh penalties for non-compliance, and frequently are the basis for both individual and class-action lawsuits against the prior employers. Please consult a lawyer for a more thorough Reduction-In-Force process. WebReductions in force (RIFs) can be difficult to manage, and they also tend to move very quicklymaking it very easy to miss a step or make costly mistakes in the process. Consistency in RIF selection criteria among successive RIFs is desirable but not essential if the RIFs in fact vary in size, scope and/or motivation. The checklist is divided into four sections: Section I Planning, Section II Involuntary RIFs, Section III Voluntary RIFs and ERIs, and Section IV Problem Most employers want departing employees to sign a legally binding document releasing the company from any claims and bringing the employment relationship to an amicable end without legal controversy. The most legally defensible criteria are objective (such as length of service, demonstrated skills, education, quantity of production, written performance evaluations, discipline history), but subjective criteria (such as "enthusiasm," "versatility," "personality") also are permissible if they are actually required for the job and are not applied in a discriminatory manner. Conduct reality checks. Similarly, the amount of severance typically is within the employer's discretion; many employers use a "two weeks' pay for every year of service" rule of thumb, with minimum and maximum amounts. Do not send any privileged or confidential information to the firm through this website. 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. Reduction in Force Checklist - Indiana Chamber of Commerce Using the selection criteria, the decision-makers should prepare a confidential preliminary list of jobs/employees to be eliminated in the RIF. to assist in the selection. Identify inducements. Information contained in this alert is for the general education and knowledge of our readers. Identify any immigration issues. However, challenging economic conditions have made extended planning time a luxury many employers can no longer afford. 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. Reduction in Force (RIF) Best Practices . DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. The WARN Act and any applicable state "plant closing" laws might require, and collective bargaining agreements generally do require, that the employer furnish notice of the RIF (and, often, some basic information about it, such as the numbers of employees being released and the timing of the separations). Plant closing laws: Federal law and similar laws in several states are not limited to RIFs in which there is an actual closing. The laws require employers to furnish advance notice of their intent to release specified portions of the employee population even if the plant remains open. Supervisors should be instructed (in writing) not to make threats, promises or misrepresentations to force or induce employees to leave. The employees must be given sufficient time to consider their options (and the separation agreement) before being forced to make a decision; several weeks is not uncommon, while large voluntary RIFs sometimes allow the employees 30-45 days to opt-in, in addition to the 45-day consideration period required to obtain a valid waiver of age claims under federal law. Agreements for management-level employees typically are longer and more comprehensive than those for non-management employees. Build specialized knowledge and expand your influence by earning a SHRM Specialty Credential. Although a reduction-in-force (RIF) often can improve an entitys financial picture, there can be serious legal and financial consequences if the layoff is not properly conceptualized, designed and implemented. Guide to Voluntary Separation Incentive Payments - OPM Home WebChecklist: Preparing For Your Reduction-In-Force Voluntary or involuntary layoff? The RIF process should be strictly confidential until formally announced. A, is more permanent, and there is no expectation that the employee will be re-hired due to the financial situation of the company, the elimination of entire groups at the company, and workforce planning has deemed the employee's role to not be essential. This checklist is designed to help organizations contemplating personnel downsizing consider the critical elements of a RIF.This checklist is intended to be a concise, plain-English and practical summary of the most significant components of a RIF that should be considered by employers. Examine what locations and/or positions will be terminated. 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. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel. (The required RIF data disclosures for a large employer often are time-consuming to prepare so the company must allow sufficient time to draft them.) The retained employees will be nervous about the future of the company and their jobs. Reductions in force are never easy or pleasant but, in these days of COVID-19, will be necessary for many companies. 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. Please purchase a SHRM membership before saving bookmarks. Appendix B: Managements Decision to Implement RIF Checklist. There are separate whistleblower laws in many states. Identify decision-makers. Meet with "survivors." Workforce Restructuring 1. Our RIF Checklist is the starting point to planning a strategic and compassionate layoff. Will the RIF create any deferred compensation/Section 409A issues? Set realistic timetables. When the agency determines a RIF is likely, the agency should review its delegations of authority to determine which individual or organization in the agencys chain of command has authority to approve the RIF actions. Copyright 19962023 Holland & Knight LLP. Civil Rights, Discrimination and Retaliation, OSHA, Workplace Safety and Whistleblower Claims. If the employee population is sufficiently large, the assistance of professional statisticians can be very useful in the disparate impact analysis (and their reports may be helpful in defending any lawsuits arising from the RIF). The meetings should be short, simple, clear, informative, unemotional and final. A This template provides a simple checklist for things to think about if you are thinking about going down this path. Your session has expired. Employees will get let go for reasons outside of their control. A hand-out sheet summarizing the available benefits often simplifies the meetings and minimizes post-meeting follow-up questions. Analyze/revise the preliminary list. 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). It is an unfortunate but increasingly common fact of business life in these troubled economic times that even successful organizations are being forced to reduce the numbers of their personnel in order to maintain economic viability. Freeze 2/17/2021) Page 4 of 17 . The goal is to make the separation benefits cost-effective, that is, high enough to induce employees to elect departure but low enough to minimize the cost to the company. Leave laws: Federal and state laws prohibit retaliation against employees who exercise their rights to take leave allowed by law or company policy. After reviewing the requirements for the content of such notices, draft and transmit them to the employees, the government recipients and any unions. Click "accept" below to confirm that you have read and understand this notice. Review and maintain appropriate documentation retention policies. Identify the company's obligations if those workers are included in the RIF and then make arrangements to satisfy any such obligations. WebREDUCTION IN FORCE PLANNING Checklist of Considerations and Tasks to Complete Involve your employment and labor lawyer early on in the process. WebEmployer's Reduction in Force Checklist. Equal Employment Opportunity Commission (EEOC) and the jury will not like you. 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). Highlights The COVID-19 crisis has The retained employees will be nervous about the future of the organization and their jobs. If the company anticipates certain employees becoming violent or disruptive, notify building security or law enforcement in advance of the RIF to put them on notice and inform key personnel of the contact information for key security personnel (but recognize that some departing workers will be offended or become unruly if they suspect they are being disrespected by an obvious police presence). There are varying state law requirements for waiver agreements. If a union represents any portion of the workforce subject to the RIF, carefully examine the collective bargaining agreement and consider the National Labor Relations Act for limitations on the RIF. The hallmark of Holland & Knight's success has always been and continues to be legal work of the highest quality, performed by well prepared lawyers who revere their profession and are devoted to their clients. Unexpected RIFs often seem to generate the most lawsuits. Companies facing reductions-in-force know that they need to make intelligent and legal decisions about which employees to keep and which to let go. For questions or more information about a reduction in force specific to your organization, contact Holland & Knight Partner Bill deMeza, who has guided a number of employers in various industries through successful RIFs, or another member of the firm's Labor, Employment and Benefits Group. 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. ("Credibility" is useful in obtaining employee buy-in when the identities of the decision-makers become known.). Layoff Selection. Use only support staff who can keep secrets. !.E) Checklist
Request for RIF Memorandum
Section 4312 (d) (1) (B) / 20 CFR 1002.139 (b) / 20 CFR 1002.5 (n) Service Member Checklist; Service Member Obligations Yes No Reference; 1. The coronavirus pandemic has demonstrated that even historically successful organizations may be forced to reduce employee headcount to maintain economic viability. Decide eligibility criteria/deadlines. Frequently asking "Is this right?" Will any ERI be deemed an ERISA plan and thus subject to that laws participation, vesting, funding, reporting and disclosure requirements and, if so, can the plan be restructured to avoid ERISA coverage? This Holland & Knight alert includes a checklist that is designed to provide an overview of the RIF process and assist organizations contemplating personnel "downsizing" to identify the critical elements and legal principles of planning and implementing a RIF. Maintaining confidentiality will minimize both employees' anxiety/distraction as well as preemptive claims by worried workers trying to "guarantee" their jobs (that is, thinking "they won't include me in the RIF next month if I announce I'm disabled or make a sexual harassment claim this month"). 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. Though not a method of reducing payroll expenses, the recent U.S. Small Business Administration's Paycheck Protection Program (providing forgivable loans to certain employers who keep employees on the payroll) may allow a company to bridge the pandemic to happier times. The meetings should be short, simple, clear, informative, unemotional and final. Further, RIF-related lawsuits often are easier for employers to win if there are recent detailed, specific, accurate and fact-based written job performance evaluations of the released employees showing that they were not performing as well as the workers who were retained. Whether you call it. The information is general in nature and cannot cover every situation. Economic or The complexities of the benefits/tax laws require careful consideration and the advice of an experienced benefits lawyer during the voluntary RIF planning process. Consistency in selection and application of criteria is critical, recognizing that certain criteria may not be applicable from department to department or from job to job; consistency in use of criteria in successive RIFs is desirable but not essential if the RIFs, in fact, vary in size, scope and motivation. The checklists included in this template are not limited to other activities that may be relevant for your specific company, industry, or financial situation. - 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. 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? Reduction in Force Checklist Gartner Research on Reengaging Employees After a Reduction in Force. For example, if 85 of 100 employees on a production line are under age 40, it would be anticipated that only roughly 15 percent of that production line's employees being part of the RIF would be over 40 (that is, persons protected by the age discrimination law). Public relations are important. Many statutes impact RIFs, including laws that vary from state to state. often leads to catastrophe avoidance. Identify the ideal number of personnel to be released from individual departments. Webdownload this RIF checklist to: Keep track of everything you need to determine before conducting a RIF. 1. While no one wants to let go of staff, the economic realities may force you to do so. Discover steps you can take to make both transitioning and remaining employees feel valued and supported during this difficult time. Determine whether any employees to be laid off hold visas or have applied for green cards. RIF A reduction-in-force that would have included the person would be an example. The RIF process should be strictly confidential until formally announced. Moreover, the laws of each jurisdiction are different and are constantly changing. Prepare papers. 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. 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). Most employers use at least (a) an announcement of the voluntary RIF in which the eligibility criteria, available severance benefits, and deadline dates are clearly set forth and (b) a separation agreement (containing a comprehensive release of claims). Depending on the terms of the employer's benefits plans, furloughed employees may remain eligible for benefits. Reductions in Force Toolkit | Practical Law - Westlaw RIF decision-makers may be here today but included in a subsequent RIF tomorrow. So be careful about what is written and how it is phrased: A jury may be looking over your shoulder in two years. It may take several months from start to finish. 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. Such ratings and rankings should be as objective as possible (and, of course, employers should compare RIF-related ratings and rankings to prior performance evaluations to ensure that there are not inexplicable discrepancies). A separation agreement containing a waiver/release of claims is commonly used. Reduction in Force (RIF For example, certain severance pay plans and even less formalized severance arrangements may be plans governed by ERISA. Please contact your responsible Holland & Knight lawyer or the author of this alert for timely advice. This Minimize PR problems. Republished from James Publishing, Inc., Texas Employment Law. The checklist is designed to provide employers with an overview of the RIF process that allows them to plan for these unpleasant (and potentially risky) events.The checklist is divided into four sections: Section I Planning, Section II Involuntary RIFs, Section III Voluntary RIFs and ERIs, and Section IV Problem Avoidance. This checklist is intended to be a concise, plain-English and practical summary of the most significant components of a RIF. Severance pay (particularly severance in excess of any "normal" sums previously paid by the employer to departing employees) or early retirement benefits are common components of a voluntary RIF severance package. Our Reduction-in-Force Checklist is a 10-page PDF available for immediate download when you pre-pay with your credit card. Global Reductions in Force: A Practical Checklist What can be achieved in a day (or a couple of months if WARN applies) in the U.S. can take months (and yes, RIFs are frequently attacked for being discriminatory against older workers. What's the difference between RIF and layoffs? States typically permit furloughed employees to draw "unemployment," which, after the recent passage of the federal Coronavirus Aid, Relief, and. If the employee population is sufficiently large, the assistance of professional statisticians can be very useful in the "disparate impact" analysis (and their reports may be helpful in defending any lawsuits arising from the RIF). A Reduction in Force (RIF) may occur for reasons such as budget constraints, shortage of work, changes in the organization, or a need to abolish SHRA positions. 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. The hallmark of Holland & Knight's success has always been and continues to be legal work of the highest quality, performed by well prepared lawyers who revere their profession and are devoted to their clients. Pay. Make plans to exclude departing personnel from the building and computer/telephone systems immediately after being informed of their separations. Attorney Advertising. Management should carefully avoid promises about the future because additional RIFs, terminations or restructurings might be necessary. Password protect electronic RIF documents and communications among the RIF decision makers and advisors. Most employers want departing employees to sign a legally binding document releasing the company from any claims and bringing the employment relationship to an amicable end without legal controversy. These reductions are due to economic pressures, lack of work, organizational changes or other reasons of business necessity which require a reduction in staff. Managerial Reduction In Force ffi. The most common RIF goals are to reduce payroll expenses and to better align personnel resources with available work. Keep the RIF working papers and analyses in locked storage when not in use. Checklist for a Reduction in Force in Troubled Times . The company should consult with counsel about methods for maintaining certain documents as protected by the attorney-client privilege. Be careful about what is written and how it is expressed; a jury may be looking over your shoulder in two years. Reduction in Force Checklist - Summit Law Frequently asking Is this right? or Is this fair? or Is this respectful? or Would a stranger understand and accept this? and/or Whats the worst that someone could make of this? often leads to catastrophe avoidance. Is the RIF going to be throughout the plant or the company, or limited to certain departments or production lines? A detailed organization/jobs chart, showing the existing (pre-RIF) reporting relationships and numbers of job incumbents, will be useful to compare against a similar "after the RIF" chart. Some state laws require employers to give departing employees their final paychecks on their last day of employment (including payments for accrued but unused vacation time), while other state laws require employers to provide information about unemployment compensation, job training opportunities, etc. / REDUCTION -IN FORCE CHECKLIST - HRMorning The advice of a competent RIF lawyer is highly recommended. However, "buyouts" often give the employer less ability to retain the best personnel. Please note that email communications to the firm through this website do not create an attorney-client relationship between you and the firm. 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. 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. reduction in force RIF Checklist: Key Issues in Managing a Reduction-In-Force 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. Identify the goals. Consider whether a prepared press release (rather than spur-of-the-moment answers to a reporter's questions) will most effectively position the employer in the eyes of the general public. Knowing the ideal outcome will permit the employer to structure the eligibility criteria and severance package to achieve those goals. 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.
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