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Here are some alternatives to layoffs

An employment law expert shares a few options for employers looking to avoid reducing staff.
By: | April 10, 2020 • 2 min read
(Photo by Filippo Alfero/Getty Images for Polito / Politecnico di Torino )

The COVID-19 pandemic is threatening to upend workplaces across the U.S., as employers look for ways to hold onto their workers and dodge total business collapses.

Marta Moakley, an attorney and legal editor at XpertHR, explains that while some employers may not be able to avoid permanent layoffs, others are trying to hold the line by exploring temporary layoffs or other stopgap measures to keep their employees.

According to Willis Towers Watson’s Cost Containment and Premium Pay Considerations survey of 812 companies, including some multinationals, so far only 7% of companies have laid off employees, typically hourly wage earners; however, 37% will or may do so in the future.

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For alternative work arrangements, the survey found that less than one in 10 employers is offering voluntary unpaid leaves of absences (9%) or reduced work weeks (6%); however, more than a quarter of respondents either will or may do so in the future.

Regarding hiring, the survey found that 42% of employers frozen or reduced hiring, while another 28% “will or might do the same.”

“Employee retention should be a top priority for employers during challenging times,” says Moakley. “If a temporary layoff is unavoidable, an employer should communicate its desire to retain its workforce and that this step must be taken due to circumstances outside of the employer’s control—not because of poor performance or misconduct.”

Moakley notes that XpertHR offers a multitude of compliance resources for organizations grappling with new employment complexities during the pandemic, including webinars, a Coronavirus (COVID-19) Workplace Resource Center, podcasts and a blog.

As the economic fallout of the pandemic mounts, she adds, employers can consider those alternatives to layoffs, such as hiring freezes, furloughs, flexible working arrangements and reductions in salary and benefits. Employers can also explore a variety of ways to reduce workforce spend while retaining the most desirable, productive employees, such as selective, performance-based terminations, voluntary attrition programs, and eliminating contract and temporary employees.

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When layoffs become necessary, Moakley says, employers should comply with any and all applicable notice requirements under the federal Worker Adjustment and Retraining Notification (WARN) or any state and local counterparts, which may be activated if a temporary layoff is really a permanent one.

“Even if temporarily laying off employees, an employer may need to provide termination notices under unemployment insurance laws and final pay requirements may apply,” Moakley explains. “Because requirements change often, HR professionals should ensure that the organization is following the latest guidance relevant to the COVID-19 pandemic.”

Tom Starner is a freelance writer based in Philadelphia who has been covering the human resource space and all of its component processes for over two decades. He can be reached at hreletters@lrp.com.

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