Tip of the Day: Legal considerations for furloughs

I received this week from Mercer citing alternatives to layoffs, furloughs and suspending 401(k) matches, while still cutting costs. About halfway through, I saw this nugget:

"...furloughs may prompt scrutiny from the Department of Labor since U.S. labor laws prevent employers from requiring salaried employees to reduce the number of weekly hours worked like they can do with hourly employees."

You may already know that, but it was news to me. And even if you knew, it never hurts to be reminded, right?

At any rate, Mercer also offered some alternative approaches to traditional cost-cutting measures without harming your employment brand or diminishing your resources of talent:

"These solutions involve cutting pay in exchange for enhanced paid-time-off banks and offering leaves of absence in monthly increments at reduced pay levels. Instituted as either a voluntary or involuntary measure, these alternative approaches cut workforces in the short-term while maintaining employment of critical talent over the long-term. The benefits are numerous – availability of essential employees once business improves, option to restore salaries and paid time-off to original levels, strong employee morale and additional cost-savings by not having to rehire workers."

News You Can Use: Employers offer good news, bad news on the recession

The bad news is, employers see the current recession lasting a while. The good news is, they also seem to think the worst of layoff and other cuts is past.

New survey data from Watson Wyatt shows 61% of employers expect the current downturn to last at least until the end of 2009. However, the firm reports that most companies already have made most of the sweeping changes they intend to.

“Companies have come to terms with the fact that this recession is going to last and that they can’t slash their way out of it,” says Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. “With over half of companies reporting they have already made layoffs, they are now focusing on smaller, more sustainable cost-cutting actions.”

According to the survey of 245 large U.S. employers conducted in February, 52% have made layoffs, up from 39% two months ago. Additionally, 56% now have a hiring freeze in effect, an increase from 47% in December’s survey.

However, the number of companies planning layoffs has fallen from 23% to 13%. “This may be good news," notes Laurie Bienstock, Watson senior compensation consultant, "as companies move more towards cost-cutting efforts other than workforce reductions in an effort to hold on to the workers they will need when recovery eventually comes.”

Workers won't be untouched by those other cost-cutting efforts, though. Among them are:
* Salary freezes, 42% (up from 13%).
* Reductions in 401(k) matches, 12% (up from 3%).
* A shortened workweek, 13% (up from 2%).
* Travel restrictions, 69% (up from 48%).

What do you think? In terms of layoffs, is the worst over? What alternative cost-cutting measures are you considering in lieu of/in addition to salary reductions? Comment and let me know.