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Richard Corenthal Authors, “Answers to Questions Frequently Asked by Employees Facing Layoff”

Corenthal_RichardThe current economic turmoil is causing growing anxiety about job security. Employees are not only concerned about keeping their jobs, but many are not equipped to address the possibility of widespread layoffs by companies that until recently were considered stable businesses and a safe haven for employees. Employees may have protections under the law, whether the employer is being acquired, downsizing or closing entirely. Richard S. Corenthal, a partner at Meyer, Suozzi, English & Klein, P.C., has developed a general guidance for persons facing the possibility of a layoff. The following presented as Frequently Asked Questions will help employees at risk assess whether or not they are entitled to severance or if they will get advance notice before the doors shut or they are escorted off premises with a box of personal photos and belongings.

Q. Will I get notice before being laid off?

A. The Worker Adjustment and Retraining (WARN) Act may require written notice sixty (60) days before the date of a mass layoff, plant closing or shutdown of a business if the company and layoffs meet the conditions contained in the WARN Act. If the company fails to give the required 60 days notice, the employee may be entitled to backpay and benefits. Employees may be covered by the WARN Act if their company employees 100 or more full-time workers and meets other jurisdictional requirements. Employees protected by the WARN Act may be hourly or salaried workers, including managers and supervisors. While not a long period of time, the 60 day notice ensures that pay checks will continue for at least 60 days and the notice may give the employee the time needed to find another job. There are limited exceptions to the 60 day notice required under the WARN Act, such as when the layoffs are caused by natural disasters or if the company could not reasonably foresee business circumstances that led to a layoff or closing.

Q. Will I get severance pay if I am laid off from my job?

A. There is no law requiring an employer to pay severance pay. However, the employee may be entitled to receive severance if the employer has a policy or practice of paying severance. Employees should check to see if their employers have a severance policy or practice of paying severance and, if so, the amount of severance paid by the employer. Some policies contain exclusions. For example, a typical severance policy excludes payment of severance if the employee is terminated for poor work performance. Companies should not make up reasons to terminate employees in order to avoid their obligations to pay severance pay. Employees may be entitled to challenge an improper denial of severance pay.

Q. Will I get unemployment insurance benefits?

A. Workers involuntarily laid off from their positions are normally entitled to unemployment insurance benefits for economic reasons, if their employment meets the minimum requirements under the law. Employees who resign, even if they resign at the company’s request, may not be entitled to unemployment insurance benefits. Individuals who open their own business should note that, even if they make no money in their new business, may not be entitled to unemployment insurance benefits. Employees should check with the New York State Dept. of Labor, Unemployment Insurance Division regarding their right to unemployment insurance benefits by calling 888-209-8124 or visiting http://www.labor.state.ny.us/unemploymentassistance.shtm.

Q. Can I challenge my termination if I feel that I have been unfairly singled out?

A. Employees are protected by many federal, state and local laws. Employers should apply their policies uniformly and consistently. Employers may not use layoffs as a pretext to terminate employees because they are older or occupy some other protected status. For example, Section 806 of the Sarbanes-Oxley Act provides protections to employees in the finance industry. The anti-retaliation provisions of the Sarbanes-Oxley Act provide that an employer may not discriminate against an employee in violation of the statute.

Q. What should I do if my employer asks me to sign a release of my rights to challenge my termination?

A. Employers sometimes ask employees to sign separation agreements containing broad releases, which require employees to give up any right to sue their employers. The Older Worker Benefit Protection Act, a federal law, may require the separation agreement to contain certain protections, such as a 45 day waiting period, the right to have the agreement reviewed by an attorney and detailed information about the ages and titles of employees who are the subject of the layoffs. Separation agreements should be reviewed carefully to make sure that you, the individual employee, is protected and not giving up important rights, including the right to be paid accrued benefits and other monies. In addition, employees should consider asking their employers to provide an employment reference as part of the separation agreement they are being asked to sign.

Hopefully, this information provides some guidance and assistance whether you are actually facing a layoff during this current economic crisis or worried that layoffs may be coming. Workers should recognize that each employment situation presents a unique set of facts and circumstances, and this information is not intended to provide advice with respect to specific situations. In addition, employees covered by a union contract or an individual employment contract may have job protections that “at-will” employees do not have.

Richard Corenthal is a Member of the Firm at Meyer, Suozzi, English & Klein, P.C. where he provides employment advice to clients regarding employment contracts and separation agreements. He has negotiated separation agreements for clients in a wide range of fields, including finance, publishing and advertising. Meyer, Suozzi, English & Klein, P.C., a nationally-known law firm, has counseled and represented business, labor and individuals since 1960. Headquartered in Garden City, NY, the firm has offices in Albany, New York City, Washington D.C. and Melville, Long Island. MSEK provides clients with sage counsel and swift resolution of the most challenging issues in business, government and litigation.