During the public health crisis which is now upon us and is likely to worsen before it gets better, many employers, large and small, are growing increasingly concerned with the challenges they foresee in keeping their contractual obligations, sustaining their business and the possibility of reducing workforce. To assist with decision making, employers should become acquainted with the applicable law in this regard.
In Florida, employees fall into two classifications–‘contract’ or ‘at-will’. How you treat employees in the event of a business slow down or stoppage as a result of COVID 19 will depend on their classification.
Your relationship with your contract employee is governed by the express terms of your employment agreement with the employee and may extend to terms of separation as to both employer and employee. In such situations, how you terminate employment relationships will naturally vary by the terms of the agreement. That’s not to say that the employment relationship cannot be terminated, it’s just that the devil is in the details.
On the other hand, an employee at-will/employer relationship is not governed by any agreement. In fact, an employee at-will can be let go for any reason or no reason at all without advanced notification so long as the separation is not based upon, generally; the constitutionally protected classes of race, religion, age, gender, or national origin. Florida, being an employment at-will state, grants both employers and employees the flexibility to terminate employment when and if they please without legal liability as long as termination is not for an unlawful purpose.
An employee at-will workforce gives you the ability to quickly react if you suffer a business slow down or work stoppage as there is no law that mandates that you must continue to employee workers in the face of such situations. However, while Florida law may generally grant you flexibility to make such a decision without advance notification, United States Federal law is different. The Worker Adjustment and Retraining Notification Act of 1988 (the “Warn Act”), places certain burdens on employers with more than 100 employees.
Employers who meet the requirements of the Warn Act must provide employees and local government 60 calendar-days advance notification of mass layoffs. There are three exceptions to giving the required warning. They are (1) the “Faltering Company”, (2) Unforeseeable Business Circumstances and (3) Natural Disaster exceptions. While an employer is excused from giving 60 calendar-days notice for the foregoing reasons, an employer must still give as much notice as is practicable. Violating the Warn Act can expose you to back pay and benefits exposure for each aggrieved employee. While it may appear that the coronavirus meets both the unforeseeable business circumstance and the material disaster exceptions, employers should consult an attorney to navigate the terms of the act and to review any planned lay-offs.