Should a Business Furlough or Layoff Employees Amid Covid-19?

human resources, furlough, layoff

Business owners are looking for ways to mitigate revenue losses during the coronavirus pandemic, including how to handle their workforce. Some are considering furloughs and layoffs.

It goes without saying that furloughs are the best option for those who have cash flow availability. For others, layoffs are inevitable.

However, establishing a practical strategy during the coronavirus pandemic is essential to long-term growth and operations continuity. Speaking with an experienced Florida business attorney, who has experience in business disasters, will help forward-thinking business owners make the right decision.

Furlough vs. Layoff: What Is the Difference?

Furloughs and layoffs are actions that employers can take to save on payroll expenses by reducing its workforce payroll. While people sometimes use these two terms similarly, they are two vastly different strategies.

What Is a Layoff?

Layoffs are temporary separations between the employee and the company. It is predicated by the idea that work will resume when there is enough available.

Pros and Cons of Layoffs

It is an arrangement that allows displaced workers to collect unemployment benefits, and in some cases, maintain insurance coverage as an incentive to come back when a recall is issued.

However, businesses should carefully prune their workforce using this method as there is a chance for top talent to look for work elsewhere. This method is more likely to turn into a permanent loss.

What Is a Furlough?

In its simplest explanation, a furlough reduces employee hours for a specific period and is mandatory. Some companies require employees to take a furlough at some point during the year as part of their routine business practices.

Pros and Cons of Furloughs

The theory behind a furlough is that all employees experience hardship rather than just a few select individuals. It also helps companies reduce labor expenses without adding new ones.

Furlough could be an negotiated option with valuable employees to preserve the employment relationship. For the employee, it could appear a better option than layoff during a crisis that may make it difficult to find work. For the employer, reducing expenses makes the possibility of reopening the business more likely.

Implications that Business Owners Should Consider Discussing with Florida Business Attorney

There are specific aspects for business owners and managers to consider carefully. Florida follows governing state and federal laws when establishing how companies can handle furloughs and layoffs.

An Orlando business attorney will help them deal with the following:

  • Unemployment benefits advice
  • FLSA compliance
  • WARN Act compliance
  • Wage and hour considerations
  • How to handle exempt and non-exempt workers
  • Company communications
  • Furlough and layoff rollout strategies

Taking the time to plan for the long-term is the most practical approach during a temporary situation. An Orlando business lawyer will help agile companies weather the current COVID-19 pandemic.

Need Legal Advice? Boyer Law Firm is Here to Help!

Making the right choice when lives are at stake is one of the most challenging parts of running a business. Companies can perform their due diligence and discuss how to handle employees and economic impact issues with an experienced Floirda business attorney at Boyer Law Firm, P.L.

Request a case evaluation with our legal team by calling (904) 236-5317, emailing office@boyerlawfirm.com, or sending us a message through our contact form.

Print Friendly, PDF & Email