During the coronavirus pandemic, employers are considering options that will enable them to match the size and structure of their workforce to their current business needs, while also retaining the flexibility to rapidly return the workforce to precrisis levels. One such option is placing employees on unpaid leave; namely, a furlough.
To read the full text of this article by Duane Morris partner Jonathan Wetchler (originally published in Law360), please visit the firm website.
Some of America’s most prominent publicly traded retailers announced that they would furlough bricks-and-mortar employees as the economy has frozen due to stay-at-home orders to stop the spread of the coronavirus.
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According to the United States Department of Labor report on weekly claims that was issued April 2, the advance figure for seasonally adjusted initial claims during the week ending March 28 was 6,648,000, which is an increase of 3,341,000 from the previous week’s level. In California, the state’s Employment Development Department reported 878,727 unemployment-insurance claims for the week ending March 28. Claims for the week ending March 21 were reported at 186,333. According to Dominica Anderson, partner and team lead for Fashion, Retail and Consumer Branded Products at law firm Duane Morris LLP, much uncertainty remains regarding the future of brands in the apparel industry.
“When you look at the financial impact, I’ve read that reports show some companies are self-reporting that they may take up to a 15 percent hit, others are speculating they will have an 85 percent reduction in profit. Those are pretty big swings,” she said. “In the near future, we’re going to see a larger number of the unemployment applicants from the fashion industry.”
To read the full article, visit the California Apparel News website.
Duane Morris attorneys Jonathan Wetchler and Eric Ruden will be the speakers at a Duane Morris Institute webinar, “Business Triage: Reductions in Force, Furloughs and Other Measures to Maintain Business Viability,” to be held on March 26, 2020, at 11:00 a.m.
his program will provide you with a working knowledge of:
• Potential approaches for managing workforce levels and costs
– Furloughs and recalls
– Compensation reductions
– Preparing for and implementing RIFs
– Employee communications
• Analyzing obligations under WARN and state/local mini-WARN laws
• Severance plan design strategies
• Unemployment compensation
• Key elements for separation agreements
To register, please visit the Duane Morris Institute website.
