Partner Samuel Hoffman was quoted in an HR Bartender article, “Considerations When Eliminating Employee Benefits – Ask #HR Bartender,” about how to eliminate grandfathered benefits that a company isn’t legally or contractually obligated to provide.
Hoffman said an employer should be able to prospectively terminate all benefits that are voluntarily provided, but should first think about what sort of notice requirements there are. The employer should also consider the employee rights to previously accrued benefits, which in many instances are legally required to be grandfathered. Many states also require that any vacation or paid-time-off (PTO) that has accrued be preserved, even if the benefit is discontinued going forward, he pointed out.
“As a general rule, my advice would be that if you are going to eliminate any benefit prospectively, that you preserve any previously accrued unused benefits under the program,” he said. “This is advisable from both a legal and an employee relations perspective. You should also consider whether eliminating any particular benefit will have an adverse impact on your employee relations that will outweigh the savings, both in administrative time and money.”