How does massive layoffs affect government

Connor Kennedy , Contributing Writer January 22, A fresh round of layoffs was announced by Carrier and Walmart last week, occurring at a time when the economy seems to be doing well by most other metrics. Carrier, a corporation that primarily manufactures air conditioners, laid off workers on Jan. These layoffs are the most recent, following that came last year.

The Indiana factory made national headlines in when it was planning to move its factory operations to Mexico. It expected that 2, people were going to be unemployed. After winning the election, then President-elect Donald Trump and Mike Pence declared its jobs were protected from moving to Mexico.

Chuck Jones, the former president of United Steelworkers, the union that represents Carrier employees, feels disappointed in the president. On the same day that the Carrier workers were laid off, Walmart, announced a round of store closings and layoffs. Walmart is a large source of employment in many communities across the country.

In the United States, it employs over 1. It has plans in place to automate many of its jobs in the near future, likely leading to more job loss as well. Brian Phelan, a DePaul professor of economics, thinks layoffs from both companies can have many negative ramifications.

Layoffs of these numbers can remind some people of when the Great Recession hit in , especially those in the communities affected. To many, it flies in the face all the reports of an expanding stock market and declining unemployment.

Laws providing for reinstatement rights. An employee on FMLA leave is entitled to be reinstated to the same position or an equivalent position—in terms of pay, benefits, and other terms and conditions of employment—except in the case of any of the following:.

USERRA applies to all employers, regardless of size, and to all regular employees, regardless of position or full- or part-time status.

It regulates leaves of absence taken by members of the uniformed services, including reservists, and by National Guard members for training, periods of active military service whether voluntary or involuntary and funeral honors duty, as well as time spent being examined to determine fitness to perform such service. Laws regulating benefits administration. Wage and hour laws.

Mass layoffs invite scrutiny from employees and plaintiffs' attorneys as to grievances employees may have had but never bothered to pursue. In the context of a layoff, a single employee or group of employees may have little disincentive to bring claims for violation of the Fair Labor Standards Act FLSA or its state counterparts alleging improper classification as exempt employees making them ineligible for overtime and other minimum wage or overtime pay violations.

Unemployment insurance. Employees laid off through no fault of their own generally will be entitled to unemployment insurance benefits, provided other eligibility requirements have been met. An award of unemployment insurance benefits to a laid-off employee will result in higher unemployment taxes for the employer. However, such benefits help laid-off employees temporarily deal with the loss of employment income, which in turn can benefit the employer in a lower incidence of lawsuits by laid-off workers.

Service letter laws. Some states have laws requiring employers to provide upon written request basic information about a former employee such as the nature, character, duration of employment, the rate of compensation and the reason for termination.

Employee access to personnel records. A majority of states require employers either to copy, or make available for inspection and copying, a former employee's own personnel file. States differ as to the applicable time periods, the scope of records the employee must be permitted access to and the means by which the state enforces the rule.

Common law claims. Employees may allege common law claims that their layoffs constituted wrongful discharge in violation of:. Multinational corporations may be subject to layoff laws of the countries in which they operate.

Even U. There is a wealth of information to support management in effectively, legally and humanely implementing layoffs. Viewpoint: How to Conduct Layoffs with Heart. How to Conduct a Layoff or Reduction in Force.

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Overview Many different reasons can lead an organization to engage in downsizing by means of a layoff, including cost-cutting, economic declines, mergers and others. Why Layoffs Occur Layoffs are a time-tested means of cutting organizational costs; reducing staff can have an immediate and substantial impact.

A variety of other conditions may also necessitate a layoff: A nationwide recession. A natural disaster or crisis. A decline in a particular industry. Technological changes. The failure of a company. Mergers and acquisitions. Competitive forces such as offshoring and outsourcing. Acts of war or terrorism. Alternatives to layoffs include: Reducing hours worked to spread the economic consequences of cost cutting among all employees rather than targeting a few persons for layoff.

Adopting a voluntary separation program VSP. VSPs are particularly good at reducing the risks of legal liability associated with terminating employees. Identifying and eliminating wasteful practices. A Strategic Approach to Layoffs A strategic approach to layoffs has many characteristics in common with that used in fault-based terminations. As such, it: Begins with a strategic approach to hiring. Continues through the decision to conduct a layoff as opposed to another means of reducing workforce.

Requires notification to the various stakeholders in the process. Requires ongoing dealings with former employees in terms of benefits administration, reference requests, verification of employment and, possibly, responding to lawsuits. Requires effective management of the forces surviving the layoff. Selection Criteria Layoffs are demoralizing to employees and, when large numbers are involved, may result in negative publicity for the employer. The following are typical types of selection criteria: Seniority-based selection.

Employee status-based full-time, part-time, contingent status selection. Performance-based selection. How each state, city or town gets revenue varies widely, though it ultimately is some combination of income, sales and property taxes.

No matter what the combination, when the economy is hurting — people are unemployed and are buying less and businesses are closing — state and local governments can take a huge hit. The outlook for some state governments is not as bad as economists had feared at the beginning of the pandemic. States including California and Virginia have been spared from huge losses, partly because tax revenue in those states has not declined as much as initially expected as people went back to work and wealthier workers continued to work from home.

But other states are looking at huge deficits, some worth billions of dollars, particularly as the industries that they rely on for revenue, like tourism or energy, have declined because of the pandemic. State leaders in these hard-hit states have suggested that spending has only increased during the pandemic as their residents have turned to the government for assistance during hard times.

State and local governments, many anticipating the worst, have already taken steps to slim their budgets, namely by instituting layoffs, furloughs and hiring freezes of government workers. About 1.