Terminations and layoffs are often the subject of employee class action lawsuits, whether they are brought under the federal Fair Labor Standards Act (“FLSA”), the federal Worker Adjustment and Retraining Notification Act (“WARN Act”), and/or their corresponding state statutes, just to name a few. As some employers face the prospect of losing federal funding whether in the forms of loans or grants, due to the new administration’s Office of Management and Budget’s potential freeze of federal assistance—the fate of which remains in flux—it is important for employers to review potential separation procedures to ensure compliance with appliable laws.
While a United States District Court just ordered the Trump administration to temporarily stop the freeze on Monday, February 3rd, the issues surrounding it will likely remain hotly contested in the courts, causing uncertainty for all employers, particularly nonprofit organizations and businesses—both large and small. Even just short pauses in federal funding may force employers to lay off, or permanently terminate, their workers. Terminating workers who hold H-1B Visas creates unique issues for employers and such workers alike.
To learn more how to employers can prepare for these potential spending cuts, and the unfortunate possibility that they may have to lay off or terminate workers, please check out the following alert, authored by my colleagues and I, here: Federal Funding Cuts: Key Considerations for Employers Facing Potential Layoffs. Specifically, to ensure compliance with the federal WARN Act (and any corresponding state, “Mini-WARN” statutes, which are often more expansive), employers who anticipate that cuts to funding may affect their workforce may want to consider proactively notifying affected employees, government agencies, and any collective bargaining representatives of mass layoffs or plant closings triggered by a loss of federal funds. They should also contact counsel regarding any potential, state-specific requirements for mass layoffs under their states’ respective Mini-WARN statutes or otherwise. Further, they should ensure that they are acting in compliance with their respective states’ wage payment and collection laws—some of which require terminated workers’ last paychecks to be paid on their date of termination. Finally, in addition to the above-mentioned notice and wage payment requirements, employers must be mindful of immigration requirements when terminating non-citizen employees under federal immigration laws—which also remain in flux.
While the list of considerations and potentially-implicated statutes is far from exhaustive, a bit of proactivity in reviewing potential separation procedures can go a long way in ensuring compliance with applicable laws.