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Category: Layoffs

Layoffs

What should be in your employee’s severance payment?

You are probably aware that State laws governing employees' final pay upon termination vary widely. As your company grows, needing to terminate an employee may come up more often. To avoid legal hassles, you should make sure your HR people know how to legally cut the employee’s severance payment check. For example, a laid-off employee's severance payment may be due immediately upon termination (e.g., in California), or not until an employee's next regularly scheduled payday (e.g., in Florida). Likewise, an employee's entitlement to payment for accrued vacation and/or sick time, commissions, and bonuses varies by state. There are different rules in each state for whether the employee is entitled to: Accrued vacation Accrued sick time Commissions Bonuses Failing to pay an employee as required by law can subject you to costly unpaid wage claims and additional civil penalties. You should encourage your HR resources to take a look at applicable laws to determi ...

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Note these legal age issues when planning to layoff employees.

Note these legal age issues when planning to layoff employees. The Older Workers Benefit Protection Act (OWBPA) provides additional protection to employees covered by the Age Discrimination in Employment Act (ADEA). The OWBPA affects downsizing employers in two ways. First, the OWBPA places strict requirements on an employee's release of an ADEA claim. Requirements include:   It requires such a release to be in writing as part of the information given to the employee during the layoff. Employees must be able to easily understand the release. (the "knowing and voluntary requirement"). The employee must be advised to consult with an attorney after the day of the layoff. Employees must be given a 21-day consideration period to evaluate the release The employee must be given a seven-day revocation period after signature. Second, the OWBPA includes potentially dangerous conditions for group layoffs. If an employer offers severance and an associated release to ...

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Layoff Damage Control Focus: Employee Morale

Layoff Damage Control Focus: Employee Morale Lowered employee morale is an unwanted (and often unavoidable) consequence of a mass layoff. Retained employees can feel various emotions, including:   Loss or guilt over colleagues who were laid off Insecurity about their future with the company Increased stress due to a heavier workload To maintain employee moral and loyalty, you must reaffirm the remaining employees' value to the company, and refocus them on company objectives and goals (using incentives if possible). Immediately after a layoff, you should facilitate a company-or department-wide meeting to discuss the layoffs and provide a forum for employees to ask questions and air concerns. Thereafter, you should hold periodic meetings to maintain this dialogue with employees and follow up on the company's direction and achievement. Being honest and inspiring confidence in the company's future will help preserve employees' allegiance. Modern Business Associate ...

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Federal HIRE Act offers a tax credit on social security, how much can my company earn?

Federal HIRE Act offers a tax credit on social security, how much can my company earn? President Obama signed into law the Hiring Incentives to Restore Employment Act ( HIRE Act ) in March of 2010. The federal HIRE Act carries a tax credit on Social Security. It starts immediately for employers hiring qualified employees through the remainder of 2010. The best way to generate the maximum tax credit on Social Security is to hire qualified employees early in the year, since the exemption stops on wages paid after January 1, 2011. If an employee earning $40,000 annually is hired on April 1, 2010, the Social Security tax credit to the employer would be approximately $1,900. If the same employee was not hired until Aug. 15, 2010, the savings would be lowered to $950. The tax credit on Social Security can be used to offset scheduled tax deposit liabilities beginning April 1, 2010 and accrue with each payroll processed. Employers will receive a 6.2% Employer Social Security Tax Ex ...

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Why national unemployment levels mean legal hassles for you.

Why national unemployment levels mean legal hassles for you. As a business owner, you should understand that a significant level of unemployment is the largest predictor of an increase in employee lawsuits relative. Understandably, employers face difficult questions and concerns during a weakened economy What is the process for an employee’s layoff? Which employment laws are relevant? How can I avoid an employee lawsuit? How do I combat lowered employee morale? A downsizing employer is expected to navigate a complex legal and human resources minefield, and must get its answers right the first time. Employers will increasingly seek legal guidance to minimize risk when answering these critical questions and dealing with laws. You may need compliance assistance (or a shoulder to cry on) during an isolated layoff, You should develop a strategic reduction-in-force plan while consulting your legal resources. In this way, you can avoid looming legal hassles that are ...

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