How to Decide Which Employees to Lay Off
Employers must consider many factors when deciding which employees to lay off. First and foremost, they must take into account the legal ramifications of their decisions. It's illegal to base decisions on discriminatory factors such as sex, race, religion or age. Employers must also adhere to any employment or union contracts. Laying off employees is a big decision and businesses need to figure out what's best for their type of operation. This is accomplished by determining which employees they can afford to eliminate, while also improving their bottom line.
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Instructions
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Determine the areas of your business that are most negatively impacted financially and where you need to cut expenses. After you determine the areas where cutbacks are needed, make a further analysis to determine which specific positions you can afford to lay off. Some positions may be vital to operations and cannot be eliminated for any reason.
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Consider the legal implications of laying off certain employees. For example, if your business operates under a union, you must adhere to union regulations. Similarly, if some of your employees are working under employment contracts, it may be more difficult to lay them off than employees who haven't signed contracts. These types of factors may have an impact on which employees you should choose to lay off.
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Decide the criteria you want to base your decisions on. For example, some companies lay off workers according to seniority, while others may wipe out entire departments in one sweep. Some other options include offering early retirement deals, or basing final decisions on prior performance reviews. You'll need to determine the best approach for your situation based on the information you've gathered thus far.
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Choose the employees you want to lay off based on the criteria you selected.
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