What is the requirement for notifying employees when the company plans to outsource a service component of its organization?

The United States doesn’t have a law requiring notification to employees regarding outsourcing. Other than compliance with the Worker Adjustment and Retraining Notification Act WARN, it’s up to you whether and how you go about notifying employees about upcoming outsourcing plans. Some states also have their own notification requirements. WARN The WARN Act requires most […]

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The United States doesn’t have a law requiring notification to employees regarding outsourcing. Other than compliance with the Worker Adjustment and Retraining Notification Act WARN, it’s up to you whether and how you go about notifying employees about upcoming outsourcing plans. Some states also have their own notification requirements.

WARN

The WARN Act requires most employers of 100 or more employees to give 60-day advance notice to employees about plant closings or mass layoffs. If your outsourcing plans involve laying off a large number of employees, it’s advisable to check out both the federal WARN Act and any possible state additions to ensure compliance.

Strategy

Although you may not be legally obligated to inform employees about your decision to outsource a component of your company, it’s advisable to do so to avoid making your employees feel like they’ve been kept in the dark. Gaining the support of key personnel in your decision may make the difference between a smooth outsourcing transition and an uphill battle.

Your company might experience resistance from employees who feel their jobs are potentially threatened by outsourcing. You may want to consider forming a team dedicated to addressing employee concerns. Ideally the team would have an outsourcing expert, managers, and employees from the most affected areas of the company.

Conclusion

If your outsourcing plan will result in layoffs, consult the WARN Act to check whether you’ll need to notify employees. Regardless of your obligation to notify, it’s best to communicate outsourcing plans tactfully to your employees.

Helpful Links:

Employment Law Outsourcing Checklist – HROtoday.com

Regulatory Notification of Outsourcing – US Practical Law

IT Support Outsourcing – ReferenceForBusiness.com

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