Many employers are struggling with business continuity issues and considering whether lay-offs or closures are necessary and what their next steps are. We’ve provided a bulletin below to guide employers through key considerations for a reduction in force. As mentioned in the bulletin, employers in certain circumstances will be subject to the WARN Act and must provide notice to affected employees, the highest elected leader of local government, and the state’s dislocated worker unit. Typically 60 days advance notice is required, or in case of emergencies, as much advance notice as possible. See our bulletin below for a summary of the WARN Act. Some states have additional requirements.

In response to these emerging issues, states are considering expansion of unemployment benefits. Yesterday, Alabama announced new unemployment coverage related to COVID-19. Please see the Press Release and FAQ from the Alabama Department of Labor (DOL) for details. Note that per the press release, the DOL instructs “employers who decide to shut down due to causes related to COVID-19 should treat the shutdown as a temporary layoff.” Also, they state that these “rules are subject to change pending congressional action.”

Other states are making similar accommodations, so we urge employers to stay abreast of applicable guidance as it continues to develop at a rapid pace. A state’s Department of Labor website should be a good source. AL’s DOL website includes helpful information for Alabama employers.

Lastly, from a federal perspective, the Senate is reviewing the House of Representatives Bill – Families First Coronavirus Response Act (“FFCRA”) – which includes the Emergency Paid Sick Leave Act and Emergency Family Medical Leave Expansion Act. These provisions would apply to employers with less than 500 employees and (1) require them to provide emergency paid sick leave to employees under certain conditions, in addition to existing leave benefits, and (2) expand FMLA rights. The Senate is expected to make changes to the bill and send back to the House.

Due to the fluidity of our situation and foreseeable employer relief from both federal and state governments, we urge you to take your time in making lay-off and other business decisions; for example, evaluating circumstances weekly, if possible. And refer to your legal counsel for specific guidance.

Key Considerations for Reductions in Force

Read Our Bulletin: The WARN Act

If you have questions or need help, please contact one of our benefit consultants.