Reductions in Force
Our town is facing a budget shortfall. We need to cut back on expenses and are wondering if we can terminate/layoff/furlough some of our non-essential personnel? How do we go about doing this?
During this economic downturn municipalities are facing record budget deficits which leaves cities/towns no choice but to cut their budget. This has spurred many calls about reductions in force (RIF)and furloughs of municipal employees. It is very important to make sure the decisions are fair and are applied across the board. To insure strict compliance with all labor laws we have compiled a list of essential factors;
· Employee manuals, personnel policies, and any labor agreements should be reviewed thoroughly for any RIF/layoff policy; if a policy exists it should be followed accordingly.
· ARIF/layoff plan should be implemented prior to any terminations.
· Determine the amount of work force needed to meet your required level of service(s).
· Evaluate employees using objective criteria
· Take in consideration the employees state; avoid comments like “Now you will have more time for your family” or “At your age you should have more rest.”
· IMPORTANT: If the employee(s) in question are currently part of a collective bargaining agreement, it is essential to follow any notice or bargaining requirements set forth in the agreements.
Other options in lieu of forced reductions;
· Voluntary or mandatory furloughs: Furloughs involve non-duty and non-pay status for budget reasons. The employee continues to work on a fairly regular basis, and allows employers to schedule certain days/hours off; example, a non-exempt employee could be required to take every other Friday off, without pay.
· Reduced-hour schedules: This involves a permanent or semi-permanent reduction in the employees normal working hours; example a non-exempt employee normal workweek is 5-day/40 hours could be reduced to 4-day/32 hours.
· Salary Freezes: This freezes all non-exempt employees salary at the current rate they are receiving.
When reducing the hours or salary of exempt employees the FLSA has special requirements. For recent guidance callOML for the May 2010 issue of the Labor Bulletin or visit the below web link.
If you have any further questions you can contact the
US Department of Labor at the following web link: (http://www.dol.gov/WHD/flsa/FurloughFAQ.pdf) or your TortLiability Insurance carrier for their input on your municipalities situation.