Every business owner knows that the economy fluctuates. No matter what industry you are in, you can expect times of great profit and periods that are sparse. In some cases, the latter will necessitate action. You may need to cut costs in order to maintain your business, but downsizing is often easier said than done. There are several legal pitfalls, in fact, that can make it a liability and therefore potentially more expensive than it is worth. The following are important risks to avoid when you are reducing your workforce.
There are several legal pitfalls, in fact, that can make it a liability and therefore potentially more expensive than it is worth. The following are important risks to avoid when you are reducing your workforce.
Lack of definite documentation
When you are reducing your workforce, clear and definitive documentation is your best friend. This will take the form of a written plan, a logical explication, statistical evidence and budgetary projections. Without this to justify your decisions, it can easily be alleged that your downsizing was done unfairly or haphazardly. According to The Balance, you should always maintain documentation that you can confidently rely on for support if you face questioning.
Appearances of discrimination
Nobody wants to lose their job to downsizing, and when it happens, some employees may wonder if ulterior motives led to their unemployment. It is imperative to prevent any downsizing decisions that could be attributed to discrimination on the basis of sex, race, gender, religion or any other statuses protected by the EEO. Always back up your decisions with the aforementioned documentation to avoid this.
Violation of union standards
If your workforce includes unionized workers, things are a little bit more complex when it comes to downsizing. You should thoroughly familiarize yourself with the standards that dictate their employment if you find yourself needing to reduce your workforce. Violation of their rules can be seriously costly and lead to a series of repercussions.
If you are currently trying to reduce your company’s workforce, there are many legal pitfalls, but a lawyer can help. Contact an attorney today for more information on how to minimize the risks.