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Why employers must proceed carefully when planning layoffs

As much as small business owners would perhaps like to imagine otherwise, there will come a point at which they experience a slump in sales or some other unforeseeable financial difficulties. While most of the time these problems can be effectively managed or simply endured, the situation may become dire enough that the possibility of layoffs or reductions in force must be considered.

As truly unfortunate as this reality is, it's important for small business owners to proceed with caution in the event they have no choice but to take this route. In particular, they must take steps to ensure that the ensuring layoffs or reductions in force are not discriminatory.

What this means is that it will be necessary to ensure that the layoffs or reductions in force do not result in the disproportionate dismissal of groups of employees otherwise protected by federal employment discrimination laws, such as older workers or disabled workers.

In order to accomplish this, the U.S. Equal Opportunity Employment Commission recommends that small business owners consider taking the following steps:

  • Create a confidential list outlining the employees who would be terminated or laid off in accordance with your layoff/RIF criteria (most recently hired, productivity, expertise, etc.).
  • Carefully examine the confidential list to determine whether a certain group of protected employees would be disproportionately affected. For example, if there are concerns older workers will be affected more than their younger counterparts, compare the percentage of older workers slated for a layoff/RIF with the percentage of older worker currently employed.
  • Make the necessary adjustments to your layoff/RIF criteria if it's determined that a certain group of protected employees will indeed be disproportionately affected. Using the aforementioned example, if it's determined that the planned layoff/RIF would be comprised of 80 percent older workers and that the total number of older workers currently employed is only 10 percent, it would perhaps be prudent to readjust the layoff/RIF criteria such that business interests are still protected but fewer older workers are terminated.

If you have questions about this complex topic, or your rights and responsibilities as an employer in general, consider speaking with a skilled legal professional.

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