NEW YORK, NY / ACCESSWIRE / February 15, 2017 / Warnact.com reports that Zenefits, the self-proclaimed "Number one, all-in-one HR Platform", has confirmed that it will lay off 430 employees, 45% of its workforce, after the hiring of its new CEO, Jay Fulcher. Fulcher acts is the third CEO in the company's brief, four-year history.
In an e-mailed statement, Zenefits admitted that these job cuts are a "hard but necessary" decision, that was already made prior to Fulcher's arrival.
Around 430 jobs will be cut, including 250 in Zenefits' San Francisco headquarters and 150 in its Arizona office, and though this is the company's third round of lay-offs, it is by far the largest since the company has come about.
Jessica Hoffman, a Zenefits spokesperson, continued in her e-mail statement, "[W]e have a dramatically improved cost structure, the ability to deliver a market-leading product roadmap that exceeds customer expectations, and enough cash to fund our operations for years to come." It may be true that these layoffs reflect recent improvements in Zenefits' software, which have made the administration of benefits more automated. Former CEO David Sacks led a software overhaul last year, whereas previously core Zenefits functions were heavily reliant on manual work by staff.
In the wake of Zenefits' founding CEO, Parker Conrad's, departure, Zenefits released hundreds of employees, including many sales positions, through a combination of layoffs and an offer to take severance pay and quit. This group of layoffs, though, falls heavily on the operations department and other areas outside of sales, though every department was affected.
According to the law firm of Levi & Korsinsky LLP, an employee advocacy firm, similar mass layoffs may result in employment law violations. For example, the WARN Act is a United States labor law that protects employees of businesses with 100 or more employees. If an employer conducts a plant closing or mass layoff affecting 50 or more employees who constitute at least 33% of the employees at that site, or more than 500 employees, the employer must provide 60 days' advance notification. Employees are therefore entitled to full pay and benefits during such period prior to layoff and may also be entitled to various other protections under the law.
Notably, several states have enacted their own "mini-WARN Acts" with generally more stringent requirements. With regards to this particular case, California has implemented the Cal-WARN Act, which applies to any private business with 75 or more full- or part-time employees who have been employed at the business for at least 6 of the 12 months preceding the date notice was required. Under the Cal-WARN Act, 60 days' advance notice is required to be given by the employer when closing a plant, laying off a substantial number of employees, or relocating their business.
Levi & Korsinsky believes that Zenefits might have violated the WARN Act, and/or the Cal-WARN Act, and believe affected individuals may be entitled to back wages and benefits from the company.
The advance notice is intended to give employees and their families transition time to adjust to the prospective loss of employment, to seek and to obtain other employment, and, if necessary, to enter skill training or retraining programs that will allow these workers to successfully compete in the job market. Oftentimes, employees don't receive the benefits they are due or are otherwise harmed during the layoff process and may have recourse under the law.
For more information about the WARN Act and other employee rights, contact:
Levi & Korsinsky LLP
SOURCE: Levi & Korsinsky LLP