Take a look at 2013 . . . They want to have you cleared off the books by the end of the year - 12/31/2015. What is the last pay date in December? In 2013, (if I remember correctly . . . ) after the VP's were cut about Tuesday 9/10, then they went on to Managers about Tuesday 9/24. It takes 2 weeks for HR to get revamped for another round. Supervisors and non-management were let go about 10/8 so figure 2 weeks after management gets cut. They are MUCH more respectful to the VP's and Manager's as they cut them privately, one by one - but basically at the very same time of day. Everyone else is just lumped together. The WARN act says that you have to give 60 day notice. What they do is let you go and then continue to give you a paycheck for that 60 day period saying that you do not have to show up for work. That covers them with the WARN act. In 2013, they gave Supervisors and non-management 3 months salary regardless of years of service, your health insurance was paid up (by you) through the end of the month that you were let go (they count that as 1 month) then they paid you for the equivalent payment amount for COBRA another 2 months to get you to the "3 months" of health insurance. Therefore, about Dec 24 was the last pay date for 2013 so they paid the balance due for the 3 months work on that pay date. They also paid the amount for 2 months of COBRA before the end of the year which completed any obligation by 12/31/2015 and totally cleared you off the books. They also vested any unvested stock grants which, of course, gets applied as income for the year as well as the COBRA payment. Currently that is not much of an issue with the stock prices but when the stock was higher in 2013, it really inflated the income and hit hard on taxes - especially with the COBRA added in and any extra for the 3rd month. They also have you sign that you will not come back and sue them for any reason and keep the severance package quiet !!! If you do not sign, you do not get the severance package! They play the "termination date" to their advantage . . . For the 401k, your contribution and company match ends on your actual last working day paycheck. So for some things, they use the actual separation date from work, for other things they use the 60 day end date - whatever is advantageous for them. Some of the checks came the first week of January but they counted them for tax purposes in the previous year - so again, you are totally cleared off the books by 12/31. Don't set around waiting to see if your number is drawn, pack your personal belongings NOW. If they pack them for you, they take no care in how your items are handled. When you are notified, you take what you can pack in a box in 5 minutes before you have to go stand in line for the firing squad and your remains are escorted out.
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WARN only applies if 500 or more people are laid off at at single location. Given the rumor of 10% across the board that would be below the 500 threshold on the OKC campus. Keep in mind that a large percentage of the workers on campus are contractors, so letting them go does not figure into the WARN equations. Do not assume that WARN applies.
How are WARN, serverance and unused PTO paid out? Bi-weekly as normal or in one lump sum?
How can you be an employee on paper and your 401k stop vesting?
Yes, the stock grants that they vest in the severance package works the same way - portions are sold to pay off the taxes due. If you are cut, it is REALLY hard to try to figure out all of your paychecks and what was paid, when and how - especially if you are in the deferred compensation program.
They cannot count on some future event such as "ramping up drilling mid-2016". They cut based on todays market and what has been going on throughout 2015. If in mid-2016, they decide to ramp up, then they will hire some of you back. Look at all the ones that were cut in 2013 that were re-hired back. Bunches!!
If I recall correctly, the 401k match stopped on the last day of actual work that you showed up - meaning the end of that pay period (not the end of the WARN or severance period). I could be wrong but that is what I remember happening. You lose all of the benefits - fitness center, unearned wellness money, etc.
Use up any CHK dollars that you have saved.
You will lose any "extra" PTO except for the amount approved to carry over. Such as, I had 130 hours of PTO unused at the time I was cut in September. My anniversary date was mid-Dec which I could have normally carried over 80 hours. Therefore, they allowed the 80 hours to be "carried over" and paid me for it but I lost the other 50 that I wasn't able to use between September and December. On my anniversary date which was within the 60 day WARN period, they did grant me my new PTO and paid me for it. But I still lost that unused 50 - the money value and the ability to take the PTO. Therefore, if you happen to fall in that scenario with your anniversary coming up in the next 60 days or so, I would advise you to take some time off so you don't lose the PTO. Have a break from the stress. Just show up to work on Tuesdays as it will be easier on you to go through the process and you will have the experience with your co-workers . . . for what it is worth! If you are one of the lucky ones to be retained, you will still have your carry over PTO to use for Thanksgiving or whenever.
Great post, but I am left wondering a few things. We were told a month or so ago that we were going to ramp up drilling starting January 2016 through JVs. Why would they lay off people only to increase the workload throughout next year? When the cuts were made in 2013, how many rigs did we have compared to today or what we are "hoping" to have in, say, mid-2016? I would imagine a rigs-to-people ratio may be a good guide to predict layoffs. If layoffs are inevitable, will the field be hit as hard this time around? Our play was largely unaffected.
Great info, thanks!
If we are vested in our common stocks, are a certain amount of shares (25%) used to pay the taxes similar to a normally scheduled vesting?
@401k-er. Yes. You are "employed" through the Warn Act. It is not an option CHK can pick and choose. You have to be given 60 days notice.
My 5 year mark is September 30th, if layoffs were to occur before that time (using the assumption the severance is the same as in 2013), will my 60 days WARN protection carry me to my 5 year mark?
So during the 60 day period I am still employed at CHK (on paper)?
Also note if you are not fully vested in your 401k. 5yrs, get ready to loose all the un vested match.