Should a state government shutdown occur, private employers who interface with state departments and agencies may be impacted. If impacted, questions about employment, benefit and labor issues may arise:
- Do policies mandate pay out of accrued but unused paid time off?
- Would lay off affect seniority?
- Will a reduction in hours worked trigger a COBRA qualifying event?
- Will a reduction in hours worked trigger a loss of other insurance benefits, such as group health, life and disability benefits?
- Will severance pay be owed under a severance plan or policy, or an executive employment agreement?
- How would a lay off period be treated in counting hours of service for pension and profit sharing plan purposes?
- Should decisions to reduce hours, lay off, or close be reviewed for potential disparate impact on protected classes of employees?
- Do the federal WARN Act notice requirements apply to shutdown-related layoffs or closings?
- Do collective bargaining agreement provisions regarding layoffs, severance pay, payout/use of accrued but unused paid time off, bumping rights, and similar issues come into play?
- How are employees who are out on FMLA or other leaves affected by a layoff?
- If laid off, can employees volunteer to work without pay?
- If hours are reduced, are FLSA exempt employees at risk of losing exempt status, and, if so, what does that mean?
- Are there advantages to providing incentives for voluntary layoff/reductions?
- Does the shutdown alter an employer’s obligations to report work related injuries or seek administrative approval for a discontinuance of weekly wage benefits?
The answers to these and other shutdown related questions are highly dependent on the unique facts of each situation, including the provisions of employee handbooks and benefit plans