Suggestions on Key HR aspects in Salary deductions and layoffs
Due to the prevailing situation in the world and in Sri Lanka, there is a serious impact on the economy. The ripple effect of this going to be felt across all industries in various ways and of cause to the employees. Below are some guidelines on how to manage the impact on the employees and the best practices that can be used by the employer.
- All the employees must be informed of the current business situation and how it affects the company and the employees via email or through-line managers via proper channels.
- The consent must be taken off the salary deduction and obtain the required legal forms from the labor commissioner’s office or through your respective HR department or HR consultant.
- The management can decide the salary deduction amount considering the “Frustration Concept”, but must be able to prove that the business cannot currently be carried out due to the current situation of the country.
- The salary deduction letters must have a realistic time frame mentioning the exact time frame the salary will be changed back to normalization is proper forecasting can be done.
- If a layoff is required as per the business module, the employer must seek advice from the respective HR team or Labor Commission office at all times.
Some additional aspects that need to consider
- Salary deductions must happen from the top to bottom approach at all times. For example, the highest salary deduction percentage must be for the ether senior management/directors and then cascading down to the executive level.
- No salary deduction must effect the minimum early wages that are announced by the government.
- Proper financial forecasting and business model analytics must be looked into.
- Before applying any form of a framework on pay cuts or layoffs, EFC and Labor commissioner guidelines must be followed at all times.
Key points that need to be followed
Decisions require to be taken on salary deduction or layoffs can be unique to every business/industry/organization and cannot be copied since a similar form of business is taking some steps with regard to their employees.
It is always the best practice to seek advice from your HR department or HR consultant before taking any steps with regard to your staff at all times.
