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Economic Fallout of COVID-19 Triggers Temporary Layoffs and Stopgap Measures

Furloughs, hiring freezes, and flexible working arrangements are alternatives to COVID-19 layoffs, says XpertHR

The Coronavirus (COVID-19) has taken a toll on the workforce, with many employers considering furloughs, layoffs and workplace closures. While some employers may not be able to avoid permanent layoffs as a result of the pandemic, others are exploring temporary layoffs or other stopgap measures in the interest of keeping as many employees on the payroll as possible, says XpertHR. Only 7% of companies have laid off employees, typically hourly wage earners; however, 37% will or may do so in the future, according to a new Willis Towers Watson survey.

“Employee retention should be a top priority for employers during challenging times,” says Marta Moakley, JD, Legal Editor, XpertHR. “If a temporary layoff is unavoidable, an employer should communicate its desire to retain its workforce and that this step must be taken due to circumstances outside of the employer’s control – not because of poor performance or misconduct.”

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As the economic fallout of the pandemic mounts, employers can consider alternatives to layoffs, such as hiring freezes, furloughs, flexible working arrangements and reductions in salary and benefits. Employers can also explore a variety of ways to reduce workforce spend while retaining the most desirable, productive employees, such as selective, performance-based terminations, voluntary attrition programs, and eliminating contract and temporary employees.

When layoffs become necessary, XpertHR says employers should comply with any and all applicable notice requirements under the federal Worker Adjustment and Retraining Notification (WARN) or any state and local counterparts, which may be activated if a temporary layoff is really a permanent one.

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“Even if temporarily laying off employees, an employer may need to provide termination notices under unemployment insurance laws and final pay requirements may apply,” explains Moakley. “Because the pandemic requirements change often, HR professionals should ensure that the organization is following the latest guidance relevant to the COVID-19 pandemic.”

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