Thinking About a Reduction in Workforce (RIF)?

While many companies don’t approach a workforce reduction lightly, often employers don’t take the correct measures to insure they are handling the process legally and effectively. Having the right plan in place insures employees who remain are productive and allows you to avoid problematic situations such as claims of alleged discrimination, claims of breach of contract, violation of wage statues and federal layoff rules. Following the right guidelines will enable you to make informed decisions about how to structure the layoff and minimize the risk of a lawsuit.

  1. All supervisors and/or managers involved in this process should participate in this decision and be on the same page. Specifics like identifying tasks being performed and time spent on these tasks are crucial to the decision-making process.
  2. Key questions to ask:

    • Which job or job functions will be eliminated?
    • Will certain job functions be combined
  3. Develop clear criteria for making your RIF selections. This will allow you to choose the right positions and people by applying it fairly to each employee and job function. Each company should identify criteria that are specific to their business. Always double-check to insure you are complying with the requirements of your handbook or any contracts and collective bargaining agreements that your employees signed.
  4. Train all managers involved on how to conduct the layoff process and define his/her part of the process. How you communicate a reduction is critical and must be handled professionally and consistently. For more information, check out “How would you like to be let go?”
  5. Once you have the preliminary layoff list, evaluate it to insure that a particular class of employee is not disproportionately affected. If you find that to be the case, be sure you can substantiate the reductions with legitimate business reasons and have the right documentation to back it up.
  6. Consider “special cases” such as employees who are on a leave of absence. You also need to take into account employees who are about to vest in a benefit plan. They may feel that the layoff interferes with their protected rights.
  7. Once your list is determined and you are ready to move forward, consider drafting separation agreements and releases. Making a decision about whether severance pay should be given in exchange for a release of claims is the first step. Review all agreements, contracts, plans and practices to insure you are meeting your obligations. Be sure to address the legal complications when producing the separation agreement. Consulting with legal counsel is recommended.
  8. Understand that notification of the layoff is a legal requirement. The WARN Act states that employers with 100 or more employees must provide 60-days advance written notice of a “mass layoff” to employees, local government and union representatives.

You may also want to consider alternatives to a RIF.

*Source: Dr. Michael Reilly and Jennifer K. Wyatt as published in Lane Powell’s sponsored legal brief.

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