What are some of the issues to consider when reducing wages in lieu of layoffs?
The first consideration is whether you have made any verbal or written commitments regarding compensation and benefits. Review employment contracts, commission agreements, offer letters, employee handbooks and collective bargaining agreements. If any apply, consult legal counsel before taking action.
An employer may reduce wages across the board or for specific groups (for example, managers), but must avoid discrimination against any protected class, including employees age 40 or older.
No advance notice is required, but reductions cannot be applied retroactively to hoursWage
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