Small business owners are often forced to make difficult choices to keep their doors open. The high cost of healthcare, a complex tax code, and burdensome regulations can impact employees’ jobs, wages, and benefits. Karen Harned, executive director of the NFIB Small Business Legal Center, provides tips for navigating tough conversations with staff.
1. Candor is the best medicine.
Be honest about the business reason for this decision—which in many cases will be that it’s simply not affordable. At the end of the day, Harned says, pay or benefit decrease decisions are made to avoid job cuts, and it’s good for employers to reiterate that.
2. Don’t discriminate.
The change must treat everyone equally and not discriminate against any particular group of employees. For example: Health insurance can’t be offered to only younger employees.
3. Give plenty of notice.
Some states require advance notice for wage changes for nonexempt, hourly employees and the date of discontinuation for health insurance should be announced in time for employees to take advantage of open enrollment, which typically begins Nov. 1.
4. Be proactive
If your business is impacted by an Employment Retirement Income Security Act statute, contact your plan administrator about any legal steps that must be taken to institute a change. Stay organized. Update your employee handbooks and policies to reflect any changes. Share those changes with staff.
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