Should I reduce my labor force to get through these tough economic times? Rose Law Group Partner and Litigation Department Director David McDowell advises against ‘hasty decisions.’

By David McDowell, Partner at Rose Law Group

Many employers faced with a significant slow-down of their business are asking whether they should reduce their workforce to weather the tough economic times. But hasty decisions motivated by cash flow issues can have serious consequences. If you intend to apply for a loan under the new stimulus package reduction of your labor force may affect your eligibility or your ability to get loan forgiveness. Both loan programs are designed to keep people employed and require employers to either use the funds for salaries or affirm that employment levels will be restored in order to get the loans or have the loans forgiven.

The new FMLA extension act applies to all companies with less than 500 employees. Even small employers who have never had to comply with FMLA before are now subject to FMLA when it comes to corona virus.

Employers need to make careful decisions in the light of these constantly evolving laws and the regulations which are sure to follow.