AWC Personnel News - October 2008 (Plain Text Version)

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In this issue:
ADA Amendments Signed Into Law: What ADA Changes Mean for Washington Employers
Latest CPI Data
Cost of Living Wage Formulas
Considering Layoffs - Do You Have a Plan?
Police/Fire Compensation Survey Available
State Actuary GASB 45 Online Tool
Organizational Development Services Available
Minimum Wage Increase
Workers’ Compensation Rates May Increase by 3%
Family Leave Insurance Update
Upcoming Conferences and Workshops

Considering Layoffs - Do You Have a Plan?

These are challenging economic times and budget pressures may force many employers to consider a reduction in workforce.

These are challenging economic times and budget pressures may force many employers to consider a reduction in workforce. The City of Olympia may eliminate as many as twenty-two positions in its next budget cycle. However, with a workforce management plan in place, Olympia may be able to reduce the actual number of lost jobs to six. If your organization is facing this drastic possibility, the issues are very complex and emotional and having a plan is essential.

Based on the Summit Law presentation at the recent WAPELRA fall conference, here’s an overview on how to approach a layoff situation.

What to do in Advance of a Reduction-In-Force

Analyze the true cost of a reduction-in-force. Consider the cost of unemployment insurance, sick leave and/or vacation leave cash outs, increased worker’s compensation expenses, severance pay, reduced moral and loss of productivity.
Consider conditional reopeners on economic items in current bargaining agreements to contain costs and possibly avoid layoffs.
Evaluate the potential of demotions in lieu of layoffs.
Review applicable policies in collective bargaining agreements and personnel rules.
Develop or revise layoff policies relative to seniority-based vs. merit-based policies and bumping rights. Address implications of recall rights, how broad and how long to extend those rights.

What Happens Before Layoff Decisions are Made?

Prepare to lose good people who take the opportunity to move to more secure employment.
Non-represented employee groups may file petitions with the PERC to organize.
Worker’s compensation claims may increase and productivity may diminish.

What is my Duty to Bargain?

If a revenue shortfall motivating the reduction-in-force is beyond the employer’s control, there is likely no duty to bargain concerning the underlying decision.
The duty to bargain does not routinely extend to discussions over where management should make the expenditure reductions.
The effects of the layoff such as cross-training, outplacement services, placement rights in other departments and reassignment would usually need to be bargained.

How to Decide Which Positions to Eliminate?

Have all department heads evaluate possible savings.
Document how decisions were made on which positions to cut, and criteria for selecting whom to layoff.
Before the layoff is final, evaluate the defensibility of each targeted cut.

How Much Notice Should be Given to Employees?

The WARN Act generally applies in mass-layoffs and does not generally apply to regular federal, state and local governments.
Follow notice periods that are defined by collective bargaining agreements and personnel rules.
Consider the timing of the layoff in terms of employee eligibility for benefits such as health care to help cushion the blow for employees.

What Benefits are Available for those Employees Being Laid Off?

Unemployment Insurance.
Sick leave, vacation leave cash outs, severance payments.
COBRA benefits continuation.

Where is the Most Potential for Legal Challenges Resulting from Reduction-In-Force?

Union grievances challenging application of non-seniority based layoffs.
Attempted contract claims based on provision of policy manuals.
EEO claims, union status discrimination claims, and whistleblower claims.
With individuals receiving severance, the agency should obtain an enforceable release.

We are interested in hearing about any budget cuts your organization is anticipating that may result in reduction in workforce, as well as strategies and alternatives to layoffs that you have developed. Please contact Luann Daniels at luannd@awcnet.org or call 360-753-4137.