Reduction in Force (RIF) Alternatives


Summary

This practice note addresses alternatives to reductions in force (RIFs). A RIF is an involuntary termination of employment, usually due to lack of funds, change of work requirements, redesign or elimination of position(s), or reorganization, where the employee's position is abolished and there is no likelihood of re-hiring. Because RIFs can be costly to implement, increase the possibility of lawsuits from upset former employees, and damage the morale of remaining employees, employers should consider alternative options such as furloughs, voluntary separation programs (VSPs), and early retirement incentive plans (ERIPs). Such alternative options can help reduce employers’ labor costs and/or workforce while avoiding or minimizing the negative issues associated with a RIF.