Effective Date: 06/03/2019
Responsible Official: Vice President of Human Resources
Responsible University Office: HR Employee Relations
Revision History: 01/01/2008
Related Legislation and University policies: Reorganization Procedure
Review Period: 5 years
Date of Last Review:
Relates to: executive staff, senior staff, and staff
Exclusions: term employees
Reorganization is the restructuring of a department or distinct unit within a department that may result in the layoff of an employee(s). Restructuring may also constitute reorganization should an employee’s reporting level and or salary grade be reduced even if a layoff does not occur.
A layoff (or reduction in force) refers to the necessity of elimination of a position(s) due to changes out of the employee’s control such as lack of funding, lack of work, or reorganization. In addition, if a department wishes to make a permanent reduction in hours for a full-time position, the department has two options: reduce the employee’s hours or layoff the employee. The university will provide forty-five (45) days’ notice of layoff. Term employees are not eligible for layoff status or severance pay.
Any request to reorganize or layoff an employee or group of employees must be approved by Employee Relations, the Office of General Counsel, and the Office for Inclusion, Diversity and Equal Opportunity (OIDEO).
Benefits for Laid Off Employees
After one (1) complete year of continuous service, any regular staff employee who worked half-time or more and is laid off by the university due to lack of funding, lack of work or reorganization may be eligible to receive severance pay. Term employees are not eligible for layoff status or severance pay.
If an employee is eligible to receive severance pay, the calculation of the severance pay will be based on the most recent hire date and is based on the number of years of continuous service. If an employee is eligible for severance pay, severance may be paid to staff employees who have not obtained other employment or comparable employment outside the university by the end of the pay period following the date of layoff. If severance applies, the severance pay will normally be included in the final check. In order for an employee to receive severance pay, the employee must complete the required paperwork which will include signing a release of claims. If an employee is eligible for severance pay, the amount of severance to be provided will be determined individually but will generally be one (1) week base pay for each complete year of continuous employment, up to a total of ten (10) weeks’ base pay. Laid off employees with one (1) complete year of continuous service should discuss their eligibility for severance pay and the requirements to receive severance pay with Employee Relations.
If an employee is recalled or rehired by the university during the severance period and after receiving severance pay, the employee must waive or return severance pay to the university, prorated to the appropriate amount based on the recall or rehire date. Similarly, if an employee receives employment outside of the university, they should contact Employee Relations to return the pro-rated severance.
Terminated employees currently enrolled in the university health and/or dental plans coverage will continue to receive benefits until the end of the month in which they are laid off. Staff may elect to continue coverage for eighteen (18) months through COBRA.
Retirement Plan B
If a laid off staff member worked for a period of three (3) years or more, they are entitled to a Deferred Vested Pension payable at age 65. Staff who are 55 or older and worked at least fifteen (15) years have the option of taking “early” retirement with a reduced pension. Certain Deferred Vested Pensions may be distributed as a lump sum after termination of employment.
Non-Contributory Retirement Plan C
If a laid off staff member worked for a period of three (3) years or more, they have a vested benefit and may withdraw funds from the non-contributory plan. However, in addition to being subject to the federal tax, there is also a ten percent (10%) tax imposed on early withdrawals (those withdrawals made before age 59 ½). Federal regulations require that distributions from the account must begin at age 70 ½ and each year thereafter.
Supplemental Retirement Annuity – Plan C (SRA)
Terminated employees may withdraw their contributions from their SRA Tax-Deferred Plan now or anytime in the future; however, in addition to being subject to the federal tax there is also a ten percent (10%) tax imposed on early withdrawals (those withdrawals made before age 59½). A minimal withdrawal of these funds must be made before age 70½ and each year thereafter.
Group Life Insurance
The Group Life Insurance Plan will continue to the end of the month in which the staff member is laid off. The policy can be converted to an individual life insurance policy. The premium of the policy is fully paid by the individual employee.
If the laid off employee, their spouse, certified domestic partner, or eligible dependents are currently enrolled in classes at the university and receive tuition waiver, the waiver will continue to be effective until the end of the semester as long as the layoff date occurs after October 15th for fall semester, March 15th for spring semester or July 15th for summer semester. If the layoff date occurs before October 15th for the fall semester, March 15th for the spring semester, or July 15th for the summer semester, the tuition waiver will be revoked.
Employees who are laid off will be eligible for re-employment consideration within twelve (12) months from the effective date of the layoff. Laid off employees who apply for open positions within CWRU within the twelve (12) month period shall be treated as preferred internal applicants if they meet the minimum position qualifications and are not in positive corrective action. The Human Resources Department will assign an Employment Specialist to each laid off employee to assist with resume writing and their job search. Hiring managers must interview preferred internal applicants. However, preferred internal applicant status does not guarantee employment. Staff employees who are laid off or expecting to be laid off will be considered to have voluntarily terminated their position if they decline an offer of employment or fail to cooperate with the Human Resources Department in efforts to secure a position that would pay 80% or more of their former annual salary. Should employees subsequently be reemployed by the university after the twelve (12) month period, they may be eligible for reinstatement of service for pension plan purposes, in accordance with the requirements of the pension plans.
Vacation and Sick Time
Employees who are laid off will be compensated for the balance of their unused vacation. Employees will not be compensated for the balance of their unused sick time.
Employees will continue to accrue service for benefits-related purposes and will retain their sick balance during the twelve (12) month period. If the employee is not re-hired within twelve (12) months, the employee will forfeit their accrued sick time.