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Archive for the Recession

RIF Right, Part I

One employment law area that continues to generate lots of activity and questions is reductions in force (RIFs).

Obviously, some professions were hit harder by RIFs than others. Ever wonder which jobs took the biggest hit? The Bureau of Labor Statistics (BLS) recently issued statistics on the jobs that suffered the biggest losses in ’09. Here are the results, some of which might surprise you.

2009′s BIGGEST JOB LOSSES

  1. Architects. Approximately 40,000 architect jobs were lost in the past year, a 17.8% drop. The good news? The BLS projects that architecture jobs will grow by 10% in the next decade.
  2. Carpenters. 17% of carpenter jobs — almost 270,000 — disappeared in ’09. But there’s good news here, too: the carpentry trade is projected to grow by about 13% in the next decade.
  3. Production/Assembly. Production supervisor and assembly worker jobs dropped almost 16% from their already almost-unprecedentedly-low numbers. And the bad news is expected to continue: losses in this sector are expected to continue.
  4. Pilots. Pilot employment dropped more than 30% in the most recent quarter for which there is data (Q3) alone. If the economy improves, air travel should jump, which is good news for pilots.
  5. Software Engineers. Perhaps the most surprising entry on the list, U.S.-based software engineers were hit hard by offshoring, experiencing a 10% decline. However, the BLS projects that this sector will grow twice as fast as the average in the next decade.
  6. Mechanical Engineers. 53,000 mechanical engineer jobs were lost, but the BLS projects 6% growth in the next decade.
  7. Construction.  The housing decline resulted in the loss of about a quarter of a million construction jobs. The outlook? Federal programs and tax breaks designed to increase energy-efficient upgrades are anticipated to propel 20% job growth in the next decade.
  8. Tellers. Tellers faced a 12% drop from already-low numbers brought on by online banking and ATMs. The BLS projects a 6% increase in the next decade.
  9. Accounting. 185,000 accounting clerk jobs were lost the past year. Increased regulation is expected to result in close to 300,000 new jobs over the next decade, more than making up for the loss.

Tomorrow, we’ll give you our patented tips for managing RIFs and other not-so-fun downturn-related activities.

The Recession, Workplace Fatalities and HR

More side-effects of the recession . . .

Latest Workplace Fatality Stats

Workplace deaths dropped 10% last year. Unfortunately, workplace suicides skyrocketed 28%.

It appears that the recession may be behind both numbers. The formulas are simple: Fewer Employees = Fewer Fatalities. More Stress = More Suicides.

Here are the latest Labor Department stats:

  • Fatal workplace injuries totaled 5,071 in 2008, down 10% from 5,657 in 2007.
  • The death rate per 100,000 workers also improved 10%, falling from 4.0 to 3.6.
  • Construction had the highest number of fatalities (969 — a rate of 9.6 per 100,000).
  • Agriculture, forestry, fishing and hunting had the highest death rate — 29.4 per 100,000, more than eight times the average rate.
  • Workplace suicides rose 28% to 251, the largest increase ever.

The Wall Street Journal recently ran a story entitled Coping With a Workplace Fatality, which offers advice on what to do after a co-worker passes away. It’s worth checking out.

The Recession and HR

A recent Workforce Management survey shows that the recession is having a profound impact on HR professionals as well.

According to HR guru Dave Ulrich, many HR staffs are “stretched to the risk of burnout.” The survey bears that out: 50% of HR professionals are having trouble sleeping, 35% have considered getting out of HR and 23% have turned to alcohol, illegal drugs or other substances to cope.

Despite all that, only 9% of HR professionals practice what they preach and seek out their employee assistance program.

The Bottom Line

If you need help, please, please, please get it (and encourage others to do the same).

Survey: Recession Will Last 14 Months

Hate to be the bearer of bad tidings, but a new survey projects that the recession will last fourteen months.

According to the Philadelphia Reserve’s latest Survey of Professional Forecasters, the current recession began in April and will last through June 2009.  That would make it the third-longest recession since the Great Depression.  Only the 16-month recessions of the mid-70s and early 80s were longer.

As we discussed here, employment claims are one of the few things that go up during a downturn.  It’s more important than ever that employers know and follow the law.  Here’s what you can do to stay out of legal hot water:

Don’t Forget to WARN.  The Worker Adjustment and Retraining Notification Act (WARN) requires advance notice of a “plant closing” or “mass layoff” in certain situations.  Click here for our handy WARN Cheat Sheet.  Also, make sure you’re familiar with your own state’s laws.  Some states have enacted WARN-type statutes and/or require advance layoff notice under unemployment regulations.

If You RIF, RIF Right.  To withstand judicial scrutiny, a RIF must be based on legitimate nondiscriminatory business reasons.  Make sure all RIF decision-makers can clearly articulate those reasons before you proceed.  Also, the criteria used for selecting RIF participants should be as specific, concrete and consistent as possible.  Multiple factors may be used, but the more subjectivity there is, the more likely it is that potentially discriminatory factors could creep in.

Severance and Release.  Consider offering severance agreements in exchange for releases of claims to further reduce risk.  Make sure you comply with the older worker waiver protections under the law.  Check out our our ADEA Cheat Sheet for an overview.

Be Careful What You Write.  Be very, very, very careful about what you put in writing.  If you’re sued, the plaintiff’s attorney will undoubtedly demand every single e-mail, memo, note, jotting and scribble that’s remotely related to your process.

Talk to Your Lawyer.  Run the RIF plan by your legal counsel and conduct discrimination testing to make sure everything’s on solid legal footing.  Come up with a plan to protect as many documents as possible under the attorney-client privilege.

Click here for more tips.  Hope this helps.

The Downturn From Both Sides

The New York Times has an interesting take on managing in a downturn here.  It’s a joint interview of a defense lawyer (for the employer view) and a plaintiffs’ lawyer (for the employee view).

Here are the highlights . . .

Remain calm:  Employers should recognize that it’s a very tough time for employees and take steps to help calm them.  However, employers should also recognize that there’s a fine line between reassuring and overcommitting.  The latter can result in a lawsuit if, for example, an employee closes on a house in reliance on promises of job longevity.

Expect litigation.  Litigation and damages rise in a downturn because it’s more difficult for former employees to find new jobs.  Expect longer lawsuits and less willingness from employees to sign severance agreements with releases.  As the plaintiffs’ attorney noted:  “If someone who felt mistreated at a prior job is at home day-to-day instead of confronting the daily issues at a new job, it is emotionally more difficult to move on.  Instead, they will revisit the old job in their mind and think about what went wrong.  There is nothing else for them to be consumed with.”

Bottom Line:  Be compassionate and careful.

Click here and here for more tips on how to manage in a downturn.

Managing in a Downturn, Part II

Based on questions I’m receiving here on the Blawg and in my recent presentations, it’s clear that one employment law issue is suddenly (and not unexpectedly) eclipsing all others:  how to manage in a downturn.

Yesterday, I gave you my suggestions for weathering the storm here.  Today, I thought I’d scour the web to give you some additional resources.  Here’s the best of what I found . . .

Hope you find these helpful.  The #1 message:  Don’t lose hope!

More Unemployment = More Lawsuits?

Unemployment jumped from 5.0% to 5.5% in May, the largest increase in 22 years.  Check out the Department of Labor’s latest Employment Situation Report for all the gory details.

According to a study by Stanford Law School, a rise in unemployment triggers an increase in employment lawsuits.  For example, a 1.5% rise in unemployment was found to result in a whopping 21% jump in lawsuits.  The study also found an increase in damages awarded during a downturn because it takes plaintiffs longer to find jobs.

Those findings are supported by the EEOC’s numbers.  Last year, there was a 9% increase in charge filings, the highest since the 1990s.  The EEOC recovered more than $345 million in damages, a 26% increase over the prior year.

What does this mean for employers?  Be even more careful to follow the law during a downturn.  The risk of a big lawsuit goes up the more the economy goes down.