Federal Law on Reduction in the Workforce
An economic downtown may force an employer to reduce his workforce. When layoffs are necessary, an employer must be sure to terminate employees in accordance with federal law. Failure to do so can expose an employer to wrongful termination lawsuits.
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Discrimination Prohibited
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Employers with more than 15 employees are subject to Title VII of the Civil Rights Act of 1964 in reducing their workforce. Employees who are fired cannot be selected for termination based on race, color, religion, gender, national origin, disability and/or age.
Warning Required
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Employers with more than 100 full-time employees who are either closing an entire business or laying off more than 50 employees at once are subject to the Worker Adjustment and Retraining Notification Act ("WARN"). This federal law requires the employer to notify affected employees of the workforce reduction 60 days prior to its occurrence.
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Tip
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Employers should develop and implement workforce reduction criteria based on objective factors (e.g., length of employment or departmental needs). Employers should also document the decision-making process for any and all employment relationships being terminated. An employer's exposure to wrongful termination liability is reduced when they are able to demonstrate that subjective factors were not used in the decision-making process.
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- Photo Credit Three office workers image by Vladimir Melnik from Fotolia.com
