Construction Law

Managing Workforce Reductions During Uncertain Times

Whether you own a large construction business with a human resources department or you manage these decisions yourself, during turbulent economic times, you may have to reduce payroll. In this article, a Charlotte contractor attorney will discuss the process of managing layoffs and terminations. Remember, for all your employment law needs, consult a construction attorney with Cotney Attorneys & Consultants.

Layoffs and Terminating Employment

There are few professional tasks as hard as conducting terminations or layoffs. Although terminations and layoffs are often used interchangeably, they are two forms of separation that are distinctly different. Terminations are for cause. For example, poor performance or a violation of company policies can lead to an employee’s termination. On the other hand, layoffs occur for business-related reasons. Whether it’s due to downsizing, restructuring, or a lack of work, the separation occurred because of a catalyst beyond the employee’s control.

The Balancing Act of Separations and Retainment

Regardless of whether you’re conducting a termination or a layoff, construction businesses must protect themselves from liability when managing either form of separation. They must effectively manage workforce reductions while focusing on retainment at the same time. This can be a difficult balancing act. Afterall, when employees observe many of their colleagues being let go, this significantly impacts company culture and leaves the remaining employees concerned about their future. This is why it’s critical for companies to handle these difficult decisions with precision, and it shows why you need a process in place.

North Carolina: An At-Will State

North Carolina is an at-will employment state, meaning that employers have the right to terminate or layoff employees at their discretion. An employer can release an employee for any reason unless the separation violates the employment contract or the law. Although North Carolina is an at-will state, consult an attorney before making an irreversible employment decision. An attorney can also help you manage this process to ensure your business is protected. Failure to comply with laws related to wage and hour or discrimination can result in litigation or a claim being filed by your former employee. If you are dealing with either of these scenarios, consult a Charlotte construction litigation lawyer.

Managing Layoff Meetings

Whether you have an HR department or department supervisors conducting layoff meetings, there needs to be a strategy in place for managing this process. First, supervisors need to be trained on what exactly they should say to the employee. Many companies prefer a script in place to help reduce liability. A script can also improve the chances of the meeting ending on good terms. In some cases, a script may sound rehearsed or disingenuous, so you may prefer a checklist with a general outline of what to say. Ideally, the explanation of their separation should be brief but direct.

For layoffs, the supervisor may inform the employee of the criteria used to select the employees that will be released. Perhaps the layoffs were based on past performance reviews, specific skill sets, certifications obtained, or for progressive disciplinary reasons. Providing fair, objective information to an employee may help prove that the separation decision is lawful. However, if one of your supervisors does elect to provide supporting documentation to an employee, it’s best to have a Raleigh construction lawyer review the documents before the meeting.

Create a Separation Task Sheet

Companies need to have a task sheet created for managing their separation meetings. This can help the meeting go smoothly and reduce any liability. Here are some other things employers should consider:

What Needs to Be Done: Before you release an employee, review the terms of their employee agreement and their personnel file. If you are going to terminate their employment, implement a strategy for distributing the employee’s current workload and determine the best time and place to schedule the meeting for. For multiple layoffs in one day, it’s best to schedule these meetings with gaps in-between.
Procure Confidential Information: Before you meet with the employee, consider if the employee has possession of any form of company property or confidential information, including passwords to computer systems. Recover all company property from the employee and ask the employee to sign a termination release form before they leave the premises .
Meet Fiscal Requirements: If the employee owes any reimbursements, address these issues during the meeting. If the employee is owed paid time off or severance pay, address these payments too. Lastly, cover post-employment benefits like health-care continuation during your meeting.
Consider the Next Step: Appoint an HR representative or supervisor as the employee’s point of contact after their separation. If the employee is expected to have an exit interview, schedule this meeting and select a representative to conduct the interview.

When you perform the above tasks effectively, you can ensure that the separated employee is exiting your workplace on good terms. You can also reduce liability and maintain a strong company culture. As this is a difficult time for many businesses across the country, a Raleigh construction attorney is here to help navigate you through difficult employment decisions and ensure your business can continue operations without disruption. For employment law advice or company handbook drafting services, consult an attorney from Cotney Attorneys & Consultants.

If you would like to speak with a Raleigh construction litigation attorney, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.