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Kind Staffing Cuts?
January 12, 2009
By Margery Weinstein
Well, not kind exactly, but kinder. There's no way to be nice when reducing your workforce, but there are strategies for easing the blow. Michael Rosen, an employment lawyer and partner with Foley Hoag LLP, offers some layoff do's and don'ts:
First, decide if a layoff is even necessary. The typical objective in a layoff is to reduce expenses through the paring of payroll and benefits-related costs. But large-scale reductions also entail substantial costs, both in upfront severance-related compensation, and in longer-term, often hidden costs, such as legal expenses associated with claims by terminated employees.
Consider alternative methods to achieving expense reductions such as hiring or wage freezes, postponement of wage increases, reduction or elimination of annual bonuses, reduction of fringe benefits, reduced work hours, transferring potentially affected employees to open or vacant positions, and engaging in more selective performance-based terminations.
Look into a voluntary separation or incentive program. But the employer may have no control over the number of employees who will choose to participate. If not enough employees accept the package, a subsequent layoff may be necessary. What's more, good employees may choose to leave, while poor-performing employees may choose to stay, realizing they will have difficulty finding new employment.
Conduct a layoff analysis. Once an employer has compiled a list of positions (or employees) to eliminate, analyze whether there will be a disproportionate effect on any one group of protected employees, such as racial minorities, women, older workers (age 40 or over), or the disabled.
Don't lose sight of termination basics. A layoff can be an administratively complicated event, causing some employers to lose sight of basic requirements such as ensuring affected employees are paid all accrued salary and unused vacation time in the final paycheck.
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