3 Mistakes Employers Make When Reducing Staff

The Pandemic has led many major employers throughout the country to terminate big groups of their workforce.  Whether you are an employee who has been terminated, or an employer who needs to reduce staff, here are some common pitfalls to look out for: 

1.     Not honoring obligations 

Depending on the language used when terminating staff, an employer may have different obligations.  For example, where staff are ‘furloughed’ there is an implication that the employer plans to bring them back on board eventually.  The same is true when staff are ‘laid off,’ but the time before employees can expect to return is somewhat less definite. Finally, where an employer engages in a ‘reduction in force’ those terminations are considered permanent. 


2.     Either terminating or recalling staff in discriminatory ways

When employers make large cuts to the workforce it’s important they don’t concentrate on one group, especially where that group is protected.  Best practices for limiting liability include following a “last hired-first fired” policy.  

Employers have to be just as careful to avoid discriminating against a protected group when recalling furloughed or laid-off workers.  It’s important to bring back a cross-section of all employees rather than excluding one group.  

 3.     Not paying attention to benefits 

Many employer-provided benefits require a notice period before an employee’s coverage can be terminated.  For example, the Consolidated Omnibus Budget Reconciliation Act, or COBRA, may require employers to warn employees that their coverage will be lapsing, provide them with an option to extend, or even remain covered if they are considered furloughed. 

If you have questions contact us for a free, 30-minute consultation with an employment lawyer.  

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Lázaro Law Group
321 S. Plymouth Ct Suite 1250,
Chicago, IL 60604

Rafael E. Lazaro
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