With the headlines of interest rate hikes and news of mass layoffs, we are seeing more employers looking to reduce staff and expenses. To avoid negative publicity and, hopefully, litigation, we wanted to give you key points to remember when planning a reduction in force.

Employee termination
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-When planning a reduction, define selection criteria and ideally have such criteria be objective. Regardless of the chosen criteria, conduct an adverse impact analysis to determine if your selections inadvertently impact any protected class.

-Consider if you are a covered employer under the Worker Adjustment Retraining and Notification Act (WARN) and/or California mini-WARN (Cal. Labor Code Section 1400 et seq.) and determine if your planned layoffs will impact the state or federal thresholds. Don’t forget the 90-day look back and forward period under federal WARN.

-Carefully plan your communication strategy to ensure employees are treated with kindness and respect. Try to avoid a mass zoom layoff and conduct the meetings in person to the extent your work force is not fully remote. If you are doing the initial announcement in a group setting, plan individual follow-up meetings or alternate time to answer individualized questions.

-Plan for severance if your budget allows. Not only will this assist in employees’ transition but it also will minimize outstanding risk, including waiver of rights under WARN. Consider offering career outplacement services as part of the package.

-Make sure you comply with final pay requirements and have a plan for getting company equipment back, particularly from remote employees.

-Consider any potential security risks and whether separated employees will be permitted to return to the office to collect any belongings, as well as whether the office should be closed to remaining employees for their safety.

-Don’t forget about the employees you are retaining. Communicate as clearly as possible if there are anticipated future reduction, though its best to do only one round if you can, so that remaining employees can focus on their work rather than if they are going to be part of a future round. Foster an atmosphere of transparency and collaboration to retain great talent.