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Layoff Alternatives

Layoffs are rattling corporate America. In a survey of U.S. business executives by professional services firm PwC, 50 percent of respondents indicated they were reducing their companies' headcounts.

If employers are looking to trim costs, are layoffs the best way to go? Not necessarily, experts say. Alternatives to wielding the layoff ax are available.

Read the rest of the article:
Look at Alternatives to Layoffs
SHRM | Aug 2022

Weathering Coronavirus: Furloughs, Layoffs or Pay Cuts?
SHRM | Mar 2020

The Coronavirus Crisis Doesn’t Have to Lead to Layoffs
Harvard Business Review via SHRM | Mar 2020

Employers Advised to Ponder Worst-Case Scenarios
SHRM | Mar 2020

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Law Firm Articles

Work Share Programs: This program involves asking or mandating that employees reduce their hours worked and share duties with other similarly situated employees.  This approach is often viewed as an alternative to furloughs or reductions in force.  Several state unemployment compensation schemes in Arizona, California and Colorado have work share programs that allow participating employers to have their employees receive unemployment compensation while also working part-time.  Depending on the state, one benefit of these programs may be that an employee does not need to certify he is looking for employment elsewhere.  An employer interested in those programs needs to apply to the applicable state office to gain approval for a work-share program.
Furloughs, Reductions in Force, and Alternatives to Consider
Snell & Wilmer | Mar 2020

Shared-Work/Work Share Programs
SHRM Express Request

Reduced Job Hours and Pay: Employers may reduce an exempt employee's work assignments and compensation on a prospective, forward-looking basis, as long as the exempt employee's guaranteed salary remains over $684 a week. For example, an employer may notify an employee as follows: "Starting in the next pay period, your job is going to change temporarily in light of coronavirus. You will work a reduced schedule and your pay will be 75 percent of your prior salary."

You Need to Cut Costs, but Don't Want a RIF: Alternatives to Terminations in the Age of COVID-19
Ogletree | Mar 2020

Use Caution When Cutting Exempt Employees’ Salary
SHRM | Apr 2020

Considerations for Private Companies in Connection With Implementing Salary Reductions
Cooley | Mar 2020

Voluntary leaves and exit packages: Employers may take an initial step of offering non-essential employees voluntary unpaid leaves of absence, during which they would temporarily cease working but the employer may offer incentives such as continuation of certain benefits or incentives to return promptly when business ramps back up at the end of the business slow down or interruption.
Workforce management in response to COVID-19 business interruptions and closures: Voluntary leaves, hours reductions, furloughs and layoffs
Nixon Peabody | Mar 2020

Reduction in Force Policy: Voluntary Separation Program
SHRM Sample Policy

Voluntary Unpaid Leaves of Absence – High Level Salaried Employees
Executives and other higher-paid employees of an employer can also volunteer for unpaid furloughs, and would not need to be paid for any week in which they do not perform any work (which includes no telecommuting, monitoring of e-mail, etc.). Depending on the language of applicable employment agreements (if any), employers should consider having employees acknowledge, in writing, that they have agreed to unpaid leave. In order to avoid potential wage and hour issues, employers should also consider asking impacted employees to acknowledge that no work will be performed during these unpaid furloughs.
The Pandemic Hits the Payroll: Employer Options for Cutting Costs and Staying Compliant in the Time of COVID-19
Obermayer | Mar 2020

There are a range of other cost-saving measures that could serve to help employers avoid layoffs.  These include:  (i) freezing wages; (ii) establishing a hiring freeze so that no new employees are hired, and no positions are filled when employees leave through natural attrition or termination; (iii) implementing alternative compensation arrangements such as deferred compensation, or increased incentive pay or productivity bonuses in conjunction with salary reductions or freezes;
Cost-Saving Alternatives to Layoffs During the COVID-19 Pandemic
Proskauer | Apr 2020

Furloughs: Among the many issues employers are facing in the wake of the spread of the novel coronavirus (COVID-19) is the possibility of furloughs, temporary office and location closings, and short-term layoffs. A furlough involves reducing the days or weeks that an employee may work.  A layoff can be temporary or permanent.  Employers may also consider reducing the daily hours of some employees.  This article will address these strategies in the context of COVID-19-related actions, which for most employers involve temporary rather than permanent responses.
Furloughs and Other Temporary Responses to Coronavirus (COVID-19) Disruptions
Littler | Mar 2020

Continuing Employer Group Health Coverage During Temporary Layoffs or Furloughs
Epstein Becker | Mar 2020

Reducing Personnel Expenses in An Uncertain Economy
Cooley | Mar 2020

Related Reading

The Coronavirus Has Been Devastating for Some Companies. 6 Questions to Ask Before You Consider Layoffs
Inc. | Mar 2020

U.S. Factories Closing Due to Coronavirus Concerns but Some Must Keep Producing
SHRM | Mar 2020

Finding Alternatives to Layoffs
The Hartford


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