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Employers: Proceed With Caution - Managing Layoffs

9.1.08

Recent mergers and acquisitions and a volatile economy have prompted reductions in workforce. Although employers are familiar with the exposure associated with an individual termination, layoffs affecting two or more employees can present additional legal pitfalls.

In addition to these potential pitfalls, other laws set forth affirmative obligations for employers considering reductions in workforce. For example, the National Labor Relations Act requires employers with unionized employees to bargain over the effects of the layoffs. Under the Worker Adjustment and Retraining Notification Act (WARN Act), certain employers must give 60 days advance notice to employees, certain local officials and any applicable bargaining representative prior to mass layoffs or other substantial reductions in force. In addition, most layoffs constitute a qualifying event under the Consolidated Omnibus Budget Reconciliation Act (COBRA) so that covered employers must provide affected employees with written notification of their right to elect continuation of healthcare benefits.

This article appeared in the September 2008 issue of Nevada Business Journal.

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