Layoff Alternatives

MANAGEMENT MOXIE Nimble News

YOU MISSED YOUR NUMBERS – WHAT NEXT?

Stuff happens. Clients delay purchases. Suppliers raise prices. Competitors steal market share. Banks will not or cannot lend money. Losses in the stock market shatter records and the economy enters a recession.

What is the most effective way to save money? Layoffs are an option and in these tough economic times, many employers have been compelled to let some employees go. There are downsides to downsizing. Effective RIF’s require advance planning, consume time and some argue suck energy that could go to serving clientele and increasing revenue. Your strategic plan must be accomplished. The work must be reassigned, and job descriptions juggled. Unemployment compensation costs, severance benefits and a dip in morale may eliminate some or most of your targeted savings.

While it may become necessary to eliminate some jobs, here are a few alternatives to help you save money:

Unpaid mandatory furloughs – some employers should consider reducing operating costs by shutting down all or part of their operations during slow times. Mandatory furloughs are a viable alternative to layoffs, if implemented properly. Under Federal and most state wage and hour laws, non-exempt employees must be paid only for actual hours worked. Consequently, an employer may send them home for lack of work or to otherwise save payroll costs, and need not pay them for their regularly scheduled hours if they have not actually worked. However, employers with union contracts will have to comply with those contracts and/or bargain before implementing furloughs. Furloughs should be scheduled in full week increments to protect an employee’s exempt status. Employers must emphasize to all employees who are being furloughed that they are not expected or required to perform any work during the workweek. Employers may want to limit employees from using vacation, personal, or comp time or other accrued time during a furlough. Depending on the length of the furlough, the furloughed employees may be eligible for unemployment compensation.
As an alternative to furloughs, employers may want to consider temporary salary reductions, especially for exempt employees. Take another look at non-performers. Even in a tightly run ship, you may find that some of your payroll budget cutting exercise can come through finally saying good-bye to weak performers.
Ask for volunteers for layoffs. If your layoff plans call for severance or other types of assistance, you may learn that a call for volunteers gives you a long enough roster of willing employees to avoid involuntary layoffs altogether.
Restructure or streamline. These initiatives could include closing an obsolete plant, or branch, administrative overhauls, selling of non-core operations or improving internal processes.

Final Thought
Find and fix the problem. A RIF may not be the best solution to what ails your workplace. We have not exhausted the possible scenarios of layoff alternatives. We welcome you to contact us with any questions. You can reach us at 508.548.4888 or info@foleylawpractice.com

Questions?
Contact info@foleylawpractice.com or call 508-548-4888

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