Q. Our company is looking for ways to cut labor costs in order to remain competitive. We are considering implementing a reduction in our labor force and wondering if there are other cost-saving options that are not as legally risky as laying off people.
A. Other alternatives may be to reduce employee work schedules, restrict overtime work (or freeze it altogether), implement wage and/or benefit reductions or implement unpaid leaves or furlough days. Whether these options create less legal risk depends upon the circumstances.
Because of discrimination laws, wage-and-hour issues, potential contractual obligations and other legal concerns, you should review any plans with your attorney before implementing them.
Also consider the impact these different strategies might have on your business. Some strategies may make sense for maintaining employee loyalty while you ride out the storm. Other approaches may simply make it easier for your competitors to hire away your best talent.
Like many employers in your situation, you will probably find that a combination of several strategies makes the most sense for your particular circumstances.
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