HR Tip of the Month
Understand The Benefits of Severance Pay, The Law And How To Do It Right
Generally speaking, the law does not require payment of severance to a terminated employee unless the employer has contractually agreed to do so through some form of agreement or policy. As a result, some employers may question why they should offer severance pay.
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Employers General Overview
In today's economy more than ever, your company must get value out of every dollar it spends and that especially applies to the dollars it spends on outside counsel. Brach Eichler's Employment Services Group was recently listed by U.S. News & World Report as a 2014 Tier 1 Law Firm for Employment Litigation in New Jersey. The attorneys in our Employment Services Group add value to your business by providing prompt advice and services, without unexpected costs or surprises. Our attorneys know the laws and statutes that affect your business so that you can focus on what matters most to you, running your business. We provide our clients with speedy, knowledgeable advice not just when situations arise but before they can. Whether you are a 5 employee retail operation or a national manufacturer with thousands of employees, and whether you call once a year or once a week for advice, you receive the same attention. We also represent executives, officers, directors, and high level employees in connection with their employment contracts and benefits, in addition to resolving any disputes they may have with the business.
Drawing on the strength of the Firm's health care and real estate practices, our Employment Services Group has significant experience counseling and representing clients in a broad array of industries, including:
- Health care practices
- Dental practices
- Real estate and real estate developers
- Accounting practices
- Financial services
- Construction firms
- Engineering firms
- Architectural firms
- Publishing firms
- Marketing firms
- Retail businesses of all types
- Technology and security firms
Counseling and Compliance Services
You should worry about your business and your attorneys should worry about the laws impacting your workforce. We understand that you need advice you can depend on when you need it. Our Employment Services Group attorneys know how to cut to the chase and give quick, practical advice that fits your business. There are no cookie cutter solutions that apply to all clients in all industries. All of the awards and accolades in the world an attorney may have received in the past are no substitute for your attorney taking the time to understand you and your business in order to render the advice you need.
Although it would be impossible to list all areas of counseling in which our attorneys have experience, our expertise includes:
Policy advice and preparation
The best written policies are meaningless if they do not match your specific workplace culture. Often times, the only defense an employer has to an employment discrimination claim is a concise policy, communicated regularly to its workforce, and that is actually implemented in the workplace.
Your company policies should also go beyond addressing only sexual harassment and the more familiar forms of discrimination like race and gender discrimination. Employers of all sizes need to provide a mechanism for disability accommodation and religious accommodation requests, wage and hour complaint procedures, and workers returning from the Armed Services.
Management Training on Workplace Policies
Your company policies are only as good as the supervisors and managers charged with enforcing them. Without the “buy-in” of these individuals, the company’s policy is little more than paper with words on it.
Our Employment Services Group has trained executives as well as supervisory and management level employees in various industries on the importance of following and enforcing workplace policies. The time spent learning to enforce the policies means a significantly less chance of litigation and therefore more time you can spend engaging in your business. And in the event of litigation, these training sessions raise the chance of having a case dismissed before it goes to trial.
Employment Agreements and Restrictive Covenants
Should you have written employment agreements? Should you have restrictive covenants? These business decisions must be made in consult with your legal advisor. Whether these agreements make sense for your business and, if so, preparing enforceable written agreements that protect your business are just some of the many areas in which our Employment Services Group excels.
Reductions in Force and Severance Packages
It is not uncommon to offer employees some form of severance package when they are laid off. Generally, severance packages should not be provided absent a valid and enforceable severance agreement, which should include a waiver of all potential claims against the company. And, where a significant number of employees are laid off, you may trigger federal or state WARN Act notice requirements. Companies of all sizes should not terminate any employees without consulting with their counsel to make sure they are terminating employees in the least risky manner.
Worker Classification Decisions
Wage and hour litigation is on the rise in recent years due to the lucrative damages and attorneys’ fees awards to plaintiffs’ attorneys. The only real defense to this trend is correctly classifying you workforce in the first instance. These classification decisions, whether it is the employee or independent contractor or the exempt or non-exempt, can only be made after your supervisors and human resources professionals fully understand each employee’s role and responsibilities and then by consulting with your counsel.
Family Leave Advice
Most employers only consider the FMLA when considering employee leave decisions; however, there are several other statutes that come into play. It is simply not enough to just determine whether the employee is eligible for FMLA leave. The questions of whether the employee qualifies for FMLA leave or whether she has used up her available leave is only the beginning of the inquiry. Employers must consider whether the leave request could qualify as a request for an accommodation under applicable disability accommodation laws too. Our Employment Services Group constantly advises our clients on family leave issues to ensure compliance with all applicable federal and state laws.
Investigating Internal Complaints
Once an employee makes a complaint of any form of protected activity under the multiple employment discrimination statutes, employers have an obligation to investigate those allegations. Many times however, the investigation materials will be required to be turned over to the former employee in the event of a lawsuit. This begs the question of whether you are confident your company representative has been trained properly to handle such an investigation. Our Employment Services Group provides services ranging from advice to individuals responsible for conducting the investigation to actually conducting the investigation.
Unfair Labor Practice Advice
One of the most pervasive myths is that the National Labor Relations Act (NLRA) only applies to unionized work forces. In fact, the National Labor Relations Board (NLRB) has the exclusive power to hear and decide employee complaints – whether unionized employees or not – of unfair labor practices as that term is defined in the NLRA.
The NLRB has issued many decisions against non-unionized employers finding unfair labor practices based upon poorly written policies that threaten (in the opinion of the NLRB) to discourage a group of employees’ right to discuss the terms and conditions of employment. More recently, the NLRB has issued multiple guidance memorandums on employer social media policies because employees frequently use this medium to engage in protected concerted activities under the NLRA. Employers who do not comply with the NLRA may find themselves defending an unfair labor practice charge before the NLRB, which has the power to award the same relief as a court.
Traditional Labor Law
Is your work force unionized? Is your work force the subject of a unionizing campaign by an outside entity? These two issues trigger several obligations by the employer in how it conducts itself with regard to the union or the employees who are attempting to organize their workforce. Our Employment Services Group is fully capable of advising employers on treating unionized employees, engaging in collective bargaining negotiations, and, more importantly, the legal steps an employer can take to discourage employees from organizing into a unionized workforce.
OSHA Compliance and Manuals
The Federal Occupational Safety and Health Administration (OSHA) is responsible for enforcing the federal Occupational Safety and Health Act, which aims to assure safe and healthy working conditions for employees. The law applies to all private sector employers and requires the employer to provide a workplace free of known dangers. The law also protects whistleblowers who notify OSHA of employers that violate the law.
Is your company prepared for a workplace investigation by OSHA? Your company needs to have procedures in place to not only prevent workplace injuries and illness, but to also address steps to take to record and keep track of such injuries and illnesses when they occur. Our Employment Services Group can prepare and tailor an OSHA compliance plan and train your management on proper enforcement of the plan.
Employee Benefits and Qualified Plans
Brach Eichler has over 25 years experience representing companies, pension funds and executives in all aspects of employee benefits and executive compensation law. The firm advises clients with respect to tax and ERISA issues relating to:
- Qualified retirement plans, including 401(k) plans, pension and profit sharing plans, and employee stock ownership plans (ESOPs).
- Nonqualified deferred compensation plans, including elective and non-elective deferral plans, bonus and separation pay plans.
- Executive compensation, including employment, severance, and retention agreements.
- Equity compensation, including stock option, restricted stock, and phantom share/restricted stock unit plans.
- Merger and acquisition transactions, including issues concerning employee benefits and compensation matters.
- ERISA fiduciary duty and prohibited transaction matters, including related employee benefits caselaw.
Selling or Acquiring a Business
If you are involved in any transaction to sell or acquire a business in any industry, you will need advice on employee compensation and benefits plans that are maintained by the seller or purchaser, as the case may be.
Deferred Compensation Agreements
If any agreement or arrangement, including an employment or severance agreement, has any promise to pay compensation in the future, it needs to be reviewed to determine, whether it complies with the Internal Revenue Code’s deferred compensation rules in order to avoid substantial tax penalties.
Long-Term Incentive Compensation Plans
We provide advice on drafting and designing all forms of long-term incentive compensation plans that comply with federal law, whether in the form of equity grants, phantom stock grants, deferred compensation, or bonus arrangements.
Our employee benefits practice routinely advises clients on issues arising under the Employee Retirement Income Security Act (ERISA), such as the important fiduciary duty and prohibited transaction rules under ERISA.
Health Care Reform
We counsel employers on the complex rules governing the employer mandate under health care reform to offer affordable employer group health plan coverage to full-time employees and the special rules applicable to employer medical expense reimbursement plans.
Administration and Management of Qualified Retirement Plans
Advise officers and employees regarding the administration and management of qualified retirement plans under ERISA, including compliance with the fiduciary duties and prohibited transaction rules thereunder. Officers and employees who are fiduciaries under their company’s plans are subject to personal liability and possibly excise taxes and civil penalties under ERISA and the Code for violations of their fiduciary duties or engaging in a prohibited transaction involving the plan
Regulatory investigations and hearings
Is your company prepared to respond to that Charge of Discrimination that just arrived in the mail? Does your company have the knowledge and experience to know what facts and documents are relevant to the EEOC’s investigation? These are just the first of many questions that must be addressed when your company receives a charge of discrimination from the federal or state agencies that investigate complaints of discrimination.
Many times, the “no cause” finding of discrimination in the administrative investigation stage causes an employee to not pursue the matter further. Therefore, it is imperative that the company’s response to these investigations provides the investigator the factual support he needs to find no basis for the claim of discrimination.
Administrative Hearings on Discrimination
In some instances, employers are required to defend a claim of discrimination in an administrative proceeding. These proceedings can result in money damages awards the same as if you were in court. Our Employment Services Group’s attorneys are as comfortable in these administrative proceedings as they are in court and are your best option for defending these claims and protecting your company’s rights.
Wage and Hour Investigations
The Department of Labor (DOL) has the authority not only to investigate and review your work place practices on worker classification and payroll practices, but to issue assessments, administrative fees, and penalties. One worker’s complaint over a few hundred dollars can lead to an investigation that may reveal tens or hundreds of thousands of dollars in payroll practice violations.
No longer can company assume that the DOL will end its inquiry at the treatment of the one employee who complained. You must have counsel who knows how to deal with the individual investigators at the DOL in order to minimize the potential penalties in the event violations are found to exist.
The Occupational Health and Safety Administration (OSHA) has the authority to appear at your workplace unannounced to inspect your records and workplace to find violations of the Occupational Health and Safety Act. During these visits, they will also interview employees and gather evidence to use against the employer in the investigation. Our team has experience working with the federal investigators to resolve these matters and any violations or, where necessary, to challenge any alleged violations.
Litigation and alternative dispute resolution
It is no mystery why our Employment Services Group's counseling services are sought after by clients. It’s because unlike most firms that segregate counseling attorneys from attorneys who have actually handled civil lawsuits arising out of unlawful labor and employment practices, all of the attorneys in our group have significant courtroom experience. The partners of our group believe that it is only after having seen the impact a lawsuit can have on a business that an attorney can be effective, practical counselor for the client.
Our Employment Services Group has broad litigation experience in labor and employment matters, including:
- Restrictive covenant claims, both to enforce a covenant or to defend against enforcement of a covenant
- All manners of discrimination claims such as race, gender, disability, religious affiliation, and sexual orientation
- The numerous types of retaliation and whistleblower claims such as New Jersey’s Conscientious Employee Protection Act and the anti-retaliation provisions of multiple federal and state anti-discrimination laws
- Collective, class, and individual claims for unpaid wages under the federal Fair Labor Standards Act and state law equivalent laws
- Resolving disputes over the complex maze of state and federal family leave and disability laws
Given our experience counseling and litigating matters across the broad spectrum of employment disputes, the members of our group are also available to act as an impartial mediator of employment disputes between the employer and employee in order to avoid the often times costly and always time consuming litigation process.
Statutory knowledge and experience
Our Employment Services Group has experience with and knowledge of the majority of labor and employment laws including, but not limited to:
- Age Discrimination In Employment Act (ADEA)
- Americans with Disabilities Act (ADA)
- Child Labor Law
- COBRA laws, federal and state
- Computer Fraud and Abuse Act
- Computer Related Offenses Act
- Conscientious Employee Protection Act (CEPA)
- Construction Industry Contractor Classification Act
- Construction Industry Fair Play Act
- Domestic Workers Bill of Rights
- Employee Polygraph Protection Act
- Employee Retirement Income Security Act (ERISA)
- Employment and Personnel Services Act
- Fair Credit Reporting Act
- Fair Labor Standards Act (FLSA)
- Family and Medical Leave Act (FMLA)
- Family Leave Act (FLA)
- Genetic Information Non-Discrimination Act (GINA)
- Immigration and Naturalization Act
- Jury Duty Protection Act
- Labor Management Relations Act (LMRA)
- Labor Management Relations Disclosure Act
- Law Against Discrimination (LAD)
- National Labor Relations Act (NLRA)
- New York Labor Law
- New York State and City Human Rights Laws
- Occupational Safety and Health Act (OSHA)
- Overtime Restrictions for Health Care Facilities Act
- Paid Family Leave Act (PFLA)
- Pregnancy Discrimination Act (PDA)
- Prevailing Wage Act
- Rehabilitation Act
- Sales Representative Act
- Sales Representatives Rights Act
- Security and Financial Empowerment Act (SAFE)
- Servicemembers Civil Relief Act
- Temporary Disability Insurance Law
- Title VII of civil rights act of 1964 (Title VII)
- Trade Secrets Act
- Unemployment Compensation Law
- Uniformed Servicemember Employment and Reemployment Rights Act (USERRA)
- Wage and Hour Law
- Wage Garnishment Law
- Wage Payment Law
- Wage Theft Prevention Act
- Worker Adjustment and Retraining Notification (WARN) laws
- Workmens Compensation Law
Areas of Practice Concentration
Deferred Compensation Basics: What You Need To Know To Avoid Substantial Penalties, February 17, 2016