The numbers are at once astounding and depressing.  Over 22 million Americans have filed for unemployment between mid-March and mid-April 2020.  While the construction industry in Texas has been spared the worst largely due to being classified an Essential Service, it is not immune from the pandemic or rough economic times.  Layoffs in the COVID-19 era raises novel employment issues. Below are 3 employment considerations in the COVID-19 era.

1.     Don’t Forget the Alamo FFCRA

FFCRA, a terrible acronym if one ever existed, stands for the newly enacted Families First Coronavirus Response Act.  An employer must comply with the FFRCA when considering and/or conducting a layoff of employees. The law, however, is only effective from April 1, 2020 until December 31, 2020. For further information and details about the FFRCA, please refer to our COVID-19 Resource page of our website. 

Aside from a time limitation, FFCRA has a size limitation, as well.  A public employer or a private employer with less than 500 employees is subject to the statute. So is an employer that starts with over 500 employees, but after lays-off or furloughs falls below the 500-employee threshold. 

For purposes of the FFCRA, employees currently at home because they have tested positive to COVID-19 and/or are under a federal, state, or local quarantine or shelter-in-place orders, and are receiving benefits under the FFCRA, should be treated the same way as employees still at work. Considerations for fair treatment of employees during a layoff are discussed below.

2.    This is Not Just a WARNing

Another federal statute that may apply to layoffs is the Adjustment and Retraining Notification Act of 1988 (WARN).  This statute is intended to provide protection for workers, their families and their communities, by among other things, requiring notice to employees of a pending layoff or plant closure.  Subject to certain exceptions and under certain circumstances, WARN requires employers to provide a minimum of 60 days’ notice of a “mass layoff” or “plant closing” to certain persons.

Under WARN, the term “plant closing” means the permanent or temporary shutdown of a “single site of employment” or one or more “facilities or operating units” within a single site of employment, if the shutdown results in an “employment loss” during any 30-day period at the single site of employment for 50 or more employees, excluding any part-time employees.

A “mass layoff” occurs when at least 500 employees, excluding part-time employees, lose employment during any 30-day period, or if at least 33 percent of the employees at a single site of employment lose employment during any 30-day period, unless that percentage amounts to fewer than 50 workers.

Under WARN, an employer must provide notice to employees, designated state entities and local government officials. A careful reading of the statute is recommended to make certain proper and timely notice is being provided.

There are limitations on the notice requirement.  For instance, notice may not be required when the layoffs are a result of unforeseen business circumstances.  That might potentially include the circumstances surrounding a local county’s shelter in place and COVID-19 business effects.  WARN also requires notice only for employers with greater than 100 employees. A close reading of the statute is recommended for determining whether full-time and part-time employees count towards the 100.

Because damages and civil penalties can be assessed against employers that violate WARN, it is always a best practice to consult with a human resources manager and/or legal counsel regarding any employment-related issues but specifically about what is deemed a “mass lay-off”, “plant closing” and the determination of employee count and notice requirements. 

3.     Fairness When Making Layoff Decisions

As an employer, federal and state laws regarding equal employment laws still apply when making layoff decisions. These include Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act (ADEA), Family Medical Leave Act (FMLA), Americans with Disability Act (ADA) and the corresponding state laws.

There are a few tips employers may use when considering and/or making a layoff, whether related to COVID-19 or other factors, that may increase the appearance of fairness, as follows.

• Confirm the legitimate business reason(s) for the layoff and have supporting data and documentation for this reason(s).
• Review the provisions of employment contracts held by any employees.
• Review the provisions of your employment or policies/procedures handbook.
• When deciding the position(s) to layoff, consider the skills needed to move forward; identify targeted departments; and use objective criteria.
• Document, substantiate and monitor the layoff selection process.  
• Keep the message to the employees simple.
• Be prepared and when possible, perform layoffs through individual meetings with the affected employees.
• If possible, consider providing outplacement resources for employees.
• Outline for employees what they can expect during the layoff process.
• If severance packages are offered, do not advise employees as to other benefits available (i.e. unemployment). The employees should be encouraged to consult with the Texas Workforce Commission and other agencies for any and all benefits as a result of being laid off on their own. 
• Ensure layoffs do not discriminate on the basis of race, age or gender;
• Do not discriminate intentionally against any person in a protected class or to discriminate inadvertently against a group of persons in a protected class.
• Consult the Older Workers Benefit Protection Act (OWBPA) with regard to content and time periods applicable to releases of claims for persons age 40 or older;  
• Consult the Family and Medical Leave Act (FMLA) and its state counterparts, as well as the Uniformed Services Employment and Reemployment Rights Act (USERRA) for reinstatement rights of employees who are currently on leave when the layoff occurs;  
• Consult your federal and state laws (such as USERRA) for employees who have taken a leave of absence for uniformed services including reservists and National Guard members;
• Consult the Employee Retirement Income Security Act (ERISA), COBRA,  the Health Insurance Portability and Accountability Act (HIPAA) and Affordable Care Act (ACA) for benefits administration owed to employees as a result of layoff.
• Review and follow the applicable local county or city orders regarding shelter in place, face coverings, and other requirements or recommendations that should be followed during the layoff process.

It is always a best practice to consult with a human resources manager and/or legal counsel regarding any employment-related issues.  The attorneys in our Austin and Dallas offices are available to answer any questions you may have. 

Legal Disclaimers

This blog is made available by Gerstle Snelson, LLP for educational purposes and to provide general information about the law, only.  Neither this document nor the information contained in it is intended to constitute legal advice on any specific matter or of a general nature.  Use of the blog does not create an attorney-client relationship with Gerstle Snelson, LLP where one does not already exist with the firm. This blog should not be used a substitute for competent legal advice from a licensed attorney.   

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