During periods of economic or business uncertainty, employers may need to downsize their workforce. Such reductions can take a variety of forms but frequently include employee layoffs or furloughs. Employers who take these measures must ensure that they are in compliance with laws governing compensation and employee benefits.
Some key benefits and compensation issues to consider include:
- Health plan coverage;
- Employer shared responsibility rules;
- Right to continue coverage under federal and state coverage continuation laws;
- Payment of wages under the Fair Labor Standards Act (FLSA);
- Payout of accrued but unused paid time off; and
- Unemployment compensation.
Click the following link to read our Compliance Overview that summarizes the employee benefits and compensation issues employers may encounter when terminating or suspending employment. However, this Compliance Overview only addresses federal requirements. Therefore, employers may also consider reviewing state and local laws for additional legal requirements.
