Alternatives to Lay off?

CAHR · February 2007

We are a manufacturing plant in Kentucky. Business is very slow right now and would like to somehow cut back for the next 2-4 weeks and looking at seeing if 10 or so employees would be willing to do a "voluntary" lay off for that amount of time. I believe they would be able to also draw unemployment? Wondering your thoughts on this - pros and cons? Or has anyone else done something like this on a temporary basis - any thing that worked to cut back on payroll?

LindaS · February 2007

They would be eligible for UI, at least here in WI. We have used this in the past and it has worked VERY wel but keep a couple of things in mind:

1) How are you going to determine WHO is eligible for the voluntary layoffs? Seniorty?

2) How long are the layoffs going to be? It is best to determine a length of time right off the bat so the EEs know when they are to return to work. Make sure this is in writing.

3) Insurance coverage - Are you going to continue their insurance coverage while they are off? Are they going to be required to come in an pay their premium? Remember to put this in writing as well.

4) Early recalls - what happens if you need to call the EEs back early and they have made plans while they were off? Are you going to honor those plans?

These are the things we address right off the bat before posting any voluntary layoffs.

Good Luck!

C Wilson · February 2007

I have used temporary lay-offs and they have worked very well. In NC there is a waiting period of one week before an employee can draw unemployment benefits. They can also draw unemployment if the hours worked have been reduce to less 60% of normal work hours. Check with your state unemploment office for the specific requirements to assist you in the proper structuring of the lay-offs. I was able to file unemployment for the employees who were on temp lay-off on-line and it was a very easy procedure. We allowed the employees delay payment of their portion of insurance premiums until they return to work and extended those deductions out over several pay periods. Hope this helps. Good Luck.

dbutton111 · February 2007

We have a "category" between active employee and laid off - furlough. Our policy allows us to place an employee on furlough status for up to 30 days. This allows them to keep their benefits (they pay their normal portion) and they do accrue leave during this time. They just don't work or get paid. We allow them to use any accrued leave. They also are generally entitled to unemployment.

By the end of the 30 days, if the employee hasn't been recalled they are actually laid off.

Alternatives to Lay off?

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