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If You Have to Make Layoffs, Furloughs, Or Close a Unit Panelists If You Have to Make Layoffs, Furloughs, or Close a Unit Panelists Bruce Millman - Shareholder, Littler Mendelson Jamie Izaks - President, All Points PR franchise.org/coronavirus Bruce Millman Shareholder Littler Mendelson [email protected] (M) 516.857.1711 franchise.org/coronavirus Furloughs/Layoff Terminology Layoff – generally permanent Temporary layoff/furlough Paid/unpaid With/without benefits Definite/indefinite Furlough often involves weekly strategies franchise.org/coronavirus Federal WARN Acts Sixty Days notice of Mass Layoff or “Plant Closing” 50 or more f/t employees in an operating unit 50 or more f/t employees who are 33% or more Site Based Triggered by layoff > 6 months or termination – includes furloughs Layoff under 6 months is not WARN trigger. Layoff lasts beyond 6 months? Unforeseeable Business Circumstance (UBC) Natural Disaster franchise.org/coronavirus State WARN Acts • Longer Notice • Lower Thresholds • Shorter layoffs • Some without UBC exception CA NY NJ IL Others franchise.org/coronavirus Other Termination/Furlough Issues • Final pay • Unused PTO? • Unemployment notices to employees • Unemployment notices to state agencies • COBRA • Severance/Releases -- (up to date? #MeToo) franchise.org/coronavirus Salary or Wage Deductions Without Schedule Change • Executive Contracts • Minimum Wage and Minimum Salary Requirements • Advance Notice Requirements • Frequency of Changes (Exempt Employees) • Constructive Discharge? • But: Alwar v. Trican Well Serv., L. P., 347 F. Supp. 3d 873 (W.D. Tex., Aug. 28, 2019 franchise.org/coronavirus Salary or Wage Deductions With Schedule Changes: Non-Exempt • Notice • Benefits Issues: • Minimum Wage Eligibility & COBRA • Off-Clock Insured? • Predictive Scheduling Laws Self-insured – Stop Loss Plan amendment • Constructive Discharge franchise.org/coronavirus Salary or Wage Deductions With Schedule Changes: Exempt • Salary Basis: Full salary for workweek when any work is performed, regardless of quantity or quality • Salary reduction tied to schedule reduction ties salary to quantity of work: Risks exemption. • Exempt employees need not be paid for any week in which no work is performed • Constructive Discharge • Benefits franchise.org/coronavirus Partial Week Furloughs: Exempt • Advance, lengthy reduction (months, not weeks) • Infrequent changes • Minimum salary maintained (not prorated) • Notice, etc. franchise.org/coronavirus UI Options • Workshare programs Reduced Unemployment Benefits for Reduced Hours that avoid layoffs Advance Application by Employer Criteria for program participation Employee eligibility and range of benefits • Some states now permit employees who have suffered a reduction in hours to collect unemployment even in the absence of a workshare program franchise.org/coronavirus Proper Stakeholder Communication Amid Layoffs, Furloughs and Unit Closures Jamie Izaks President All Points Public Relations [email protected] (M) (847) 975-2336 franchise.org/coronavirus STAKEHOLDERS • Franchisor • Franchisee o Employees o Employees o Franchisees o Customers o Franchisee leads o Investors/partners o Customers o Franchisor o Ownership/Private equity o Suppliers/vendors o Investor relations (public companies) • Supplier o Suppliers/vendors o Employees o Clients franchise.org/coronavirus o Partners MAP OUT COMMUNICATION CHANNELS • Franchisor (example) o Employees - email, phone, text, in-person, social media o Franchisees - email, phone, text, in-person, webinars, intranet, social media o Franchisee leads - email, phone, text, CRM o Customers - email, phone, text, in-person, social media, on-site o Ownership/Private equity - email, phone, text, in-person o Investor relations (public companies) - email, phone, text, in-person o Suppliers/vendors - email, phone, text franchise.org/coronavirus FREQUENCY • Franchisor o Daily Town Halls for franchisees via conference bridge or Zoom o Daily franchisor emails with guidance on relief and stimulus • Franchisee o Daily social media, live streaming, email, public relations with clients, customers and industry insiders; *consider a creative mailer* • Suppliers o Weekly/twice-weekly customer emails, phone calls, texts franchise.org/coronavirus HOLDING STATEMENTS • Holding statements o With news changing as fast as it is, making definitive statements before you are informed will cause more damage than harm o But, you need to be vocal and present, so let your audiences know you’re on top of it, then asses, evaluate and communicate again o Avoid rumors franchise.org/coronavirus STAYING AHEAD • Messaging preparation o Temporary closures o Modified operations ▪ Pick-up delivery ▪ Going virtual ▪ Extra precautions taken ▪ Exposure to virus o Franchisee support communications o Fee reductions o Government compliance o Financial management, i.e. Disaster Loan assistance, Stimulus Bill Small Biz guidance o Landlord communications o State of the Union franchise.org/coronavirus LAYOFFS AND FURLOUGHS • Communicate Widely and Often o Discussing and acknowledging the company’s position is the first step to keeping people involved — and committed to solving problems they understand. • Fill in Information Gaps o Share market data and competitive information; helps keep employee trust o Offer external resources • Deliver layoff/furlough message personally and respectfully in private • Internal communications first; external to customers follow – press is last to know • Support your team still employed o Insecurities will surface; communicate company status with the concerned respectfully and privately franchise.org/coronavirus TONE • Be real o Authenticity and sincerity will resonate best; not apologetic o Lean into your company values; consider the viewpoint, “What if this were me?” o Provide context for the difficult decisions that are being made; other measures being taken • Be informed o Accuracy in times of uncertainty is reassuring to all stakeholders ▪ Internal metrics, external news o Be in lock-step with your HR department o Share government-regulated/mandated guidelines • Be collaborative o Include franchisees, customers, vendors – let other voices be heard o Respond to inquiries quickly and consistently o Be purposeful o What is the outcome you want from your communication; provide something of inherent value to your stakeholders franchise.org/coronavirus VIBE • People before profits o Protect the human connection o Show empathy and compassion • Delivery is key o Clear, to the point • Strategic o Innovation, creativity and revenue-focused o Use the disruptive lessons of the present to build for the future • Look ahead o The time is now to start thinking about your welcome back party o It’s easy to become overwhelmed and trapped in near-term thinking franchise.org/coronavirus Questions? franchise.org/coronavirus Stay Informed with FAN! Text FAN to 52886 for more information and to stay engaged! franchise.org/coronavirus.
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