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In general, what is the layoff policy and practice in US? How much the company has to pay, how much IT sector usually pays? Also, what are the usual time limits

by rplnt 11y ago

In general, what is the layoff policy and practice in US? How much the company has to pay, how much IT sector usually pays? Also, what are the usual time limits in the industry?

Amezarak 11y ago
> How much the company has to pay, how much IT sector usually pays? In most of the country (California is probably an exception), the company does not have to pay anything at all. I don't know about "usually". A lot of these big SV companies seem to usually pay some severance. > Also, what are the usual time limits in the industry? What time limits do you mean? As in, what notice do they have to give you? In much if not most of the country, none.
- rplnt 11y ago
  Yep, I meant notice. Thanks. Was just wondering as this might screw up with someone if they are short on money, have mortgage, etc. In EU, there is some minimum notice time (I think two weeks?). In practice (from what I've seen) it's usually two to three months, but layoffs would be done immediately by agreement (basically pay for that period anyway). Minimum severance is one-month-pay (average, so bonuses included) for each year worked, limited to three. So in real life, one would get 5-6 months pay when being laid off. Depending on the situation (reason for the lay off), one might not be able to spend their vacation and that would have to be paid off as well. On top of that you might apply for unemployment benefit (which you paid for, so I'm not sure how relevant it is).
  - jwn 11y ago
    In the US you have no such guarantee, it's completely at the pleasure of your employer. I could walk into work this morning, get laid off, and escorted out of the building without notice. That's it, done, no more salary. To make it even worse, you also lose the subsidized health insurance. My employer pays about 60% of the cost for my family, so my monthly premiums would jump from $800 to nearly $2000 a month at the same time my income drops to near zero. Sure there's unemployment payments, but they're usually only a fraction of your previous salary, and are often capped to a maximum by your individual state. Welcome to capitalism ;)
    - rayvd 11y ago
      Conversely you could also leave at a moment's notice for a better opportunity.
      - cballard 11y ago
        Well, legally that's true, but in practice, this makes you "not a team player", or something like that, and you won't be able to use the company as a reference ever. You have to give at least two weeks warning to the employer if you want to leave, but if they want to fire you, they just show you the door without warning. Note that the employer may then just fire you anyways, so your courteous notice results in two weeks without pay. For some reason, this is considered fine, even in industries where it's a laborer's market.
        mstade 11y ago
        While there are certainly legal differences across countries, I think the stigma applies universally. It's weird, especially considering many workplaces seem to want to project an image of cohesiveness and team spirit and what not, but when it comes to practicalities all of that goes out the window in favor of the bottom line. (I'm not saying the bottom line is unimportant, just that the warm fuzzy feeling you're trying to instill is worth nothing when the man comes around. The cake, as it were, is a lie.)
    - deleted 11y ago
      [deleted]
  - SeanBoocock 11y ago
    There are some, limited legal protections in the US, notably the WARN act: https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraining_Notification_Act https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraini... Still even provisions like that are inconsistently applied. I worked at an internal development studio of a large video game publisher that closed, resulting in the layoff of all ~90 employees. The studio had two offices: one in Los Angeles, California and another, smaller office in Austin, Texas. The employees at the LA office were covered under the WARN act and thus paid/insured through the end of the year (2 months) and received company severance on top of that. Those of us at the smaller Austin office were not covered under the WARN act as we had less than 50 employees at that location. Instead we received a check for our last two week pay period and the aforementioned severance package.
  - mstade 11y ago
    I'm not sure this applies over all of the EU – certainly in the UK it's not true. (I learned this the hard way. Note to anyone working in the UK: in practice there's a minimum probationary period of two full years, regardless of what your contract says.) Anyway I'm not sure this scenario is any better than the US scenario of little to no employee protection. Sure, it means you're not flat and your back from day one, but the cost firing anyone is substantial, making it very difficult particularly for small business to hire simply because the risk is too great. I'd be keen to learn if there are other ways to reduce that risk than simply making it easier to fire people indiscriminately.
- protomyth 11y ago
  > the company does not have to pay anything at all. That's not exactly true, the company does have to pay unemployment insurance and each state has varying laws. Most states tax sites will have the documents.
bmm6o 11y ago
No warning is required. In practice it depends mostly on the size of the company and the size of the layoffs... I think most companies would like to layoff without warning, but that's not always practical. It also depends on if they are hoping to reduce headcount in general, in which case they may make a general offer of some money if employees leave... this isn't generally a viable strategy if it's e.g. a division that's being closed. If the company isn't in dire financial straits, it's common to give some severance pay, usually tied to length of employment. This isn't a requirement. With the US's ridiculous system of getting most health insurance through your employer, it does mean that you lose many of those health benefits. There is a legal provision called COBRA where you can continue for a time on your previous employer's health care (at your expense). The ACA (Obamacare) makes losing your health insurance less dire than it was in the past (for things like "pre-existing conditions"), but it still sucks.
- jm4 11y ago
  Wrong. Read up on WARN. There are conditions where an employer is required to give warning and others where no notice is required. https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraining_Notification_Act https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraini...
  - cujo 11y ago
    Aside from the many ways to get exceptions, this little nugget.... >An employer who violates the WARN provisions is liable to each employee for an amount equal to back pay and benefits for the period of the violation, up to 60 days. ...pretty much says companies can do what they want. For a lot of these folks, that's a severance.
  - bmm6o 11y ago
    As the other responder stated, even in cases where this law applies the employer can opt for "pay in lieu of notice". So 60 days severance pay obviates the notification requirement. That aside, there are a lot of scenarios where this doesn't apply (e.g. "If 50 to 499 workers lose their jobs and that number is less than 33 percent of the employer’s total, active workforce at a single employment site"). I'm not going to pretend to have numbers to back it up, but especially in the software industry this exemption seems like it would cover a fair number of layoffs.

by rplnt 11y ago

In general, what is the layoff policy and practice in US? How much the company has to pay, how much IT sector usually pays? Also, what are the usual time limits in the industry?

Amezarak 11y ago

> How much the company has to pay, how much IT sector usually pays? In most of the country (California is probably an exception), the company does not have to pay anything at all. I don't know about "usually". A lot of these big SV companies seem to usually pay some severance. > Also, what are the usual time limits in the industry? What time limits do you mean? As in, what notice do they have to give you? In much if not most of the country, none.

rplnt 11y ago
Yep, I meant notice. Thanks. Was just wondering as this might screw up with someone if they are short on money, have mortgage, etc. In EU, there is some minimum notice time (I think two weeks?). In practice (from what I've seen) it's usually two to three months, but layoffs would be done immediately by agreement (basically pay for that period anyway). Minimum severance is one-month-pay (average, so bonuses included) for each year worked, limited to three. So in real life, one would get 5-6 months pay when being laid off. Depending on the situation (reason for the lay off), one might not be able to spend their vacation and that would have to be paid off as well. On top of that you might apply for unemployment benefit (which you paid for, so I'm not sure how relevant it is).
- jwn 11y ago
  In the US you have no such guarantee, it's completely at the pleasure of your employer. I could walk into work this morning, get laid off, and escorted out of the building without notice. That's it, done, no more salary. To make it even worse, you also lose the subsidized health insurance. My employer pays about 60% of the cost for my family, so my monthly premiums would jump from $800 to nearly $2000 a month at the same time my income drops to near zero. Sure there's unemployment payments, but they're usually only a fraction of your previous salary, and are often capped to a maximum by your individual state. Welcome to capitalism ;)
  - rayvd 11y ago
    Conversely you could also leave at a moment's notice for a better opportunity.
    - cballard 11y ago
      Well, legally that's true, but in practice, this makes you "not a team player", or something like that, and you won't be able to use the company as a reference ever. You have to give at least two weeks warning to the employer if you want to leave, but if they want to fire you, they just show you the door without warning. Note that the employer may then just fire you anyways, so your courteous notice results in two weeks without pay. For some reason, this is considered fine, even in industries where it's a laborer's market.
      - mstade 11y ago
        While there are certainly legal differences across countries, I think the stigma applies universally. It's weird, especially considering many workplaces seem to want to project an image of cohesiveness and team spirit and what not, but when it comes to practicalities all of that goes out the window in favor of the bottom line. (I'm not saying the bottom line is unimportant, just that the warm fuzzy feeling you're trying to instill is worth nothing when the man comes around. The cake, as it were, is a lie.)
  - deleted 11y ago
    [deleted]
- SeanBoocock 11y ago
  There are some, limited legal protections in the US, notably the WARN act: https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraining_Notification_Act https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraini... Still even provisions like that are inconsistently applied. I worked at an internal development studio of a large video game publisher that closed, resulting in the layoff of all ~90 employees. The studio had two offices: one in Los Angeles, California and another, smaller office in Austin, Texas. The employees at the LA office were covered under the WARN act and thus paid/insured through the end of the year (2 months) and received company severance on top of that. Those of us at the smaller Austin office were not covered under the WARN act as we had less than 50 employees at that location. Instead we received a check for our last two week pay period and the aforementioned severance package.
- mstade 11y ago
  I'm not sure this applies over all of the EU – certainly in the UK it's not true. (I learned this the hard way. Note to anyone working in the UK: in practice there's a minimum probationary period of two full years, regardless of what your contract says.) Anyway I'm not sure this scenario is any better than the US scenario of little to no employee protection. Sure, it means you're not flat and your back from day one, but the cost firing anyone is substantial, making it very difficult particularly for small business to hire simply because the risk is too great. I'd be keen to learn if there are other ways to reduce that risk than simply making it easier to fire people indiscriminately.
protomyth 11y ago
> the company does not have to pay anything at all. That's not exactly true, the company does have to pay unemployment insurance and each state has varying laws. Most states tax sites will have the documents.

bmm6o 11y ago

No warning is required. In practice it depends mostly on the size of the company and the size of the layoffs... I think most companies would like to layoff without warning, but that's not always practical. It also depends on if they are hoping to reduce headcount in general, in which case they may make a general offer of some money if employees leave... this isn't generally a viable strategy if it's e.g. a division that's being closed. If the company isn't in dire financial straits, it's common to give some severance pay, usually tied to length of employment. This isn't a requirement. With the US's ridiculous system of getting most health insurance through your employer, it does mean that you lose many of those health benefits. There is a legal provision called COBRA where you can continue for a time on your previous employer's health care (at your expense). The ACA (Obamacare) makes losing your health insurance less dire than it was in the past (for things like "pre-existing conditions"), but it still sucks.

jm4 11y ago
Wrong. Read up on WARN. There are conditions where an employer is required to give warning and others where no notice is required. https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraining_Notification_Act https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraini...
- cujo 11y ago
  Aside from the many ways to get exceptions, this little nugget.... >An employer who violates the WARN provisions is liable to each employee for an amount equal to back pay and benefits for the period of the violation, up to 60 days. ...pretty much says companies can do what they want. For a lot of these folks, that's a severance.
- bmm6o 11y ago
  As the other responder stated, even in cases where this law applies the employer can opt for "pay in lieu of notice". So 60 days severance pay obviates the notification requirement. That aside, there are a lot of scenarios where this doesn't apply (e.g. "If 50 to 499 workers lose their jobs and that number is less than 33 percent of the employer’s total, active workforce at a single employment site"). I'm not going to pretend to have numbers to back it up, but especially in the software industry this exemption seems like it would cover a fair number of layoffs.