In our current economic climate, cost reduction has become the primary focus for many employers. However, many companies are questioning whether layoffs are the answer. Do you want to lay off valuable workers now, and then risk a shortage of skilled labor when the markets pick up? What about the effect that layoffs have on morale? Employers are thus resorting to other strategies to reduce labor costs. These strategies, however, are not without legal risk.

We explored many of these strategies, and the legal implications which surround them, including:

Furloughs
Shortened workweeks/ shortened work hours
Forced “vacations”
Exit Incentives
Wage and salary reductions
Benefit Reductions

The seminar discussed innovative strategies for cutting your labor costs, short of a layoff, and the legal implications of these strategies. The panel outlined the key factors companies must consider when evaluating these layoff alternatives, in order to minimize the risk of lawsuits, NLRB charges, union grievances, Department of Labor complaints, WARN violations, ERISA complaints, and the other legal and public-relations problems that may arise from these actions.

In accordance with the requirements of the New York State Continuing Legal Education Board, this non-transitional continuing legal education program is not approved for the newly admitted attorney within the first two years of admission to the Bar.

Layoffs are Not Always the Answer: The Do’s and Don’ts of Cutting Labor Costs