Employee Furloughs or Lay-offs

Employee Furloughs or Lay-offs Due to Operation Downturns/Interruptions

Updated March 18, 2020

Due to the Coronavirus (COVID-19), many employers are experiencing negative impacts and loss of revenue for their business. If you need to explore options to reduce payroll costs, you must proceed with caution, as salaried (exempt) employees have very specific rights and obligations owed to them.  Hourly (non-exempt) employees have fewer restrictions for reducing their work schedule and pay. Below is a list of various options you may have. Be sure to consult your legal counsel, in concert with your Human Resources Department, in order to implement any of these courses of action with your workforce:

  • Furloughs/Layoffs (Voluntary or Involuntary)
  • Reductions in Force (RIF)
  • Freezes (Hiring, Travel, Expense or Pay)
  • Reducing Work Hours
  • Not Allowing Overtime
  • Eliminating Bonuses
  • Offering Unpaid Sabbaticals

If you decide to proceed with any of the above actions, you must be sure that you are not inadvertently making discriminatory or unlawful choices of affected employees, such as terminating employees that are on FMLA leave or have been designated as a whistleblower or any number of protected individuals. Obviously, this is a various serious, fact-sensitive decision for any employer and there are many pitfalls to be avoided.

The information above is intended to act as a general resource and therefore does not address all considerations and jurisdiction-specific analyses that may need to be undertaken prior to taking action. Thus, employers should seek specific counsel.