LinkedIn might want to call this guy for some advice.
A Florida lawyer who specializes in employment law has just released five tips that will help employers who are considering layoffs.
“For those companies feeling forced to lay off or terminate employees, it is important to know how to manage the termination process in a way that doesn’t expose them to legal and financial risks down the road,” said Daniel Levine, who is based at the law firm Shapiro, Blasi, Wasserman & Gora P.A.
Here are his tips:
1. Get a Signed Release. The importance of an agreement by the employee to “release and waive all claims” during the termination process cannot be overstated. This document can help shield the business against future civil suits. However, companies need to make sure to offer sufficient consideration for the release, is knowing and voluntary, and conforms with older worker discrimination guidelines.
2. Consider a Severance Package. Although times are tough, and companies who lay off employees are doing so to save money, it is not a bad idea to consider offering these employees some type of severance package in order to reduce their anger and resentment at being fired, and, consequently, their likelihood for pursuing legal action.
3. Be Cautious with Unemployment Claims. Many companies automatically challenge every unemployment claim after termination scenarios, a mistake which can easily lead to revenge-motivated discrimination suits. It is important for companies to examine each claim separately to evaluate the potential legal risks that denying it could create. Sometimes it’s better to cut your losses by agreeing not to challenge these benefits.
4. Avoid Classification Confusion. Companies may be able to reclassify employees as “independent contractors,” which will reduce the employee’s cost to the company, in terms of benefits and payroll taxes, while also lowering the legal risks associated with terminating the employee should it be unavoidable later on. However, it is imperative to know the legal definition of an independent contractor. An independent contractor may technically qualify as an employee, which would expose the company to the same liability when terminating them down the line and also could cost the business a great deal of money/problems in terms of IRS issues.
5. Create Goodwill. Since there is always a chance a terminated employee will try to “get even” later on by suing the company, it makes sense to try to create some goodwill on the way out in order to reduce the employee’s resentment. Companies can do so by (a) paying for accrued vacation/sick time; (b) explaining how the company’s decision to terminate was a “financial decision,” and not a personal one (assuming this is the truth); (c) depending on the circumstances, offering to write a letter of recommendation or serve as an employment reference; (d) offering job placement assistance; and (e) stating an intention to keep the employee at the top of the list for new hires, once the company gets back on its feet (assuming the decision was financial).
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