While the economy does seem to be stabilizing as we move into the second year of the COVID-19 pandemic, companies are still struggling and layoffs are still a concern. Also, as more companies rely on automation and inexpensive overseas labor, layoffs and plant closures will continue. Even though North Carolina is seen as a very “employer-friendly” state, if you are laid off from your job, you do have rights. To help you understand them, our employment lawyers in Raleigh are providing clarity on this topic.
Understanding Layoffs vs. Termination
Many people will use the terms “layoff,” “let go,” and “fired,” interchangeably, but they are very different, especially from a legal perspective. A layoff is generally ending employment for a portion of the company’s workforce due to financial problems, relocation, or a merger with another company and eliminating redundancy. A termination is a permanent end to employment with the employer, usually due to policy violation, poor performance, or another infraction.
North Carolina is an “at will” state, meaning that employers have the right to terminate employment at any time and for any reason, unless there is a specific contract in place with protections from termination outlined. At will employment does not affect layoffs, but we did want to include this information as it does pertain to termination.
State law prevents an employer from terminating or selecting workers to lay off based on race, ethnicity, genetic information, national origin, religion, sex, pregnancy, or age.
Federal and State Layoff Protections
Federal law does have protections in place preventing an employer from laying people off without notice. Under the Worker Adjustment and Retraining Notification Act (WARN), this requires an employer to provide 60 days notice prior to a layoff, downsize, or location closure. There are exceptions to this law though.
First, it only applies to larger employers with a minimum of 100 employees. A small business with 30 employees and 6 are laid off due to a business downturn would be exempt from WARN Act guidelines. Additionally, the employer must provide notice only if either 500 or more employees are to be let go or, if the number is less than 500, 33 percent or more of the workforce will be let go.
There are also stipulations that protect the employer from providing notice or providing less notice if unforeseeable business circumstances caused the layoffs. COVID-19 shutdowns would be an example of this. An employer couldn’t reasonably foresee this issue and thus, may be able to give less notice to a layoff.
State Protections After a Layoff
In addition to notice, employers have to provide a final paycheck with the payment you are due by the next payday. Also, in North Carolina, workers who have been laid off are generally eligible for unemployment insurance for 12 to 20 weeks and receive a maximum amount of $350 per week.
Because many people have their health insurance through their employer, if you are laid off, you may have the right to keep your health insurance for up to 18 months under the Consolidated Omnibus Budget Reconciliation Act (COBRA). If you are laid off (or quit or are fired), and the business is still operating, even if at a limited basis, you can keep your health care plan, though you will need to pay the entire premium at the employer-negotiated group rate. Before paying COBRA, you may want to compare prices with coverage on the Affordable Care Act’s health insurance exchange.
Know Your Employment Contract
In addition to your state and federal rights, your employment contract or written company policy may have protections in place. For example, if your contract states that you get a week’s pay for each year of service if you are laid off, you are legally entitled to that severance. Another example is that there may be a clause in the employee policy and procedure guide that you may be paid out your accrued paid time off if you are terminated, quit, or are laid off.
Schedule a Consultation with Our Employment Lawyers in Raleigh
If you’ve been laid off without protections, have not received an agreed-upon severance, or even if you feel you were wrongfully terminated, we can help. Schedule a consultation today at [phone] or fill out the form below to learn more.
Information presented on this website should not be construed as formal legal advice or the formation of an attorney-client relationship. Additionally, any email sent to Kirk, Kirk, Howell, Cutler & Thomas, L.L.P. or any of its lawyers at the email addresses set forth in this website will not create an attorney-client relationship.