U.S. employers added 372,000 new jobs in June, beating economists’ forecasts, according to the employment report from the Bureau of Labor Statistics. The unemployment rate held steady at 3.6 percent. Some indicators show a contraction in employment, but the overall picture is that the U.S. labor market is still strong.
While the broader economy may be in a slowdown, and concerns are being expressed about an economic downturn, employers should not be hasty when navigating changing conditions. Many employers laid off workers in 2020, only to struggle to hire them back (at a premium!) later on. Attracting and retaining qualified employees remains a top challenge. Think of the impact on your business and your customers if you start cutting employment costs too much too soon.
The federal Worker Adjustment and Retraining Notification (WARN) Act imposes a notice of obligation on covered employers who implement a “plant closing” or “mass layoff” in certain situations, even when they are forced to do so for economic reasons. Employers with 100 or more full-time employees must provide at least 60 calendar days of notice to employees, unions, state/local government officials. Additionally, some states have laws more stringent than federal WARN including CA, IL, MA, NY and TN.
Employers have to keep many things in mind when terminating even one employee – final paycheck, access to personnel files, return of equipment, etc. With the rise of remote work, more remote employees could be included in layoff decisions in the future. Generally, remote employees are subject to the laws of the states and localities in which they are physically working.
If you do need to analyze headcount, how do you decide who would stay and who would go? The right selection criteria and avoiding disparate impact are critical. Reach out and consult with your FrankAdvice HR Consultant on the best strategies.