Pros And Cons Of Furloughs, Shutdowns

Law360, New York (February 27, 2009, 12:00 AM EST) -- Terminations, layoffs, hiring freezes and reductions in hours and pay are all increasingly well-known devices to reduce an employer’s workforce costs. Each employment action has its benefits and downsides.

Two other tools for an employer facing unusual economic pressures that are growing in use, if not popularity, are the furlough and the mandatory shutdown.

What Are These Tools?

The description and effect of the furlough and the mandatory shutdown are similar, and overlap in part.

With a mandatory shutdown, an employer decides that for a designated...
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