When we rang in the new decade, no one could have predicted what the world is now dealing with. Very quickly, the COVID-19 pandemic has altered nearly every area of our lives, including the workplace. Employers of all sizes are grappling with how to keep their businesses operational and profitable while the economy takes a massive hit. It’s a predicament no business wants to be in, but a lot of those decisions revolve around a workforce reduction — an attempt to stay afloat with the leanest staff possible during these challenging times.
What are the factors to consider before initiating a workforce reduction? Are there alternatives to layoffs and if so, what makes sense for your business? And what are the legal issues that come into play with a temporary or permanent layoff?
When considering a possible reduction in force, there are a few practices to keep in mind. Working through the following can help you analyze your overall financial situation before initiating deep staff cuts:
Letting employees go is an extremely difficult undertaking for any manager or business owner. Not only is it emotionally taxing, but it also must be handled sensitively and fairly to avoid any legal complications. Here are a few guidelines:
If you’re considering a group of employees who all perform essentially the same function, the fairest approach is often to cut by hire date (assuming all other factors are equal).
You’ve made the tough decisions and now must act on them. Here are a few tips on how to address affected employees:
If you’re pursuing a reduction in force, you must uphold certain employee notification laws, including the federal Worker Adjustment Retraining and Notification Act (WARN Act). Typically, the WARN Act requires covered employers to provide 60 days’ advance notice to employees due to a plant closing, mass layoff or even temporary layoff. However, the unforeseeable businesses circumstances surrounding the COVID-19 emergency are likely to act as an exception to this requirement. That being said, it’s still wise to notify employees as soon as ‘practicable,’ along with an explanation of why the 60-day notice period was reduced.
Be sure to review state laws, too, as some states have their own requirements related to mass layoffs and plant closings, which may apply to the current situation. In addition, many state and local regulations require employers to provide written notices to any employee who is laid off. These notices, which cover topics such as unemployment insurance and separation from the company, are changing rapidly as new COVID-related laws are passed.
With the Mandatory Employee Handout Service, you can get access to electronic versions of all employee handouts required by federal, state and local laws to be distributed directly to employees based on triggering events such as leave requests or separation. Handouts are updated in real time as laws change, and cover all the latest COVID-related notices.
For additional guidance on how to address the many challenges with COVID-19, including workforce reductions, check out the webinar, COVID-19 and the Workplace: How to Comply with Rapidly Changing Legislation.
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