[CA] [CA Can I legally reduce employees’ hours and offer an optional severance without risking lawsuits?
I want to reduce hours without legal trouble. I was thinking of making a document explaining low workload and giving employees the option to quit with a month’s pay, or agree to part-time until business picks up.
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Since you’re in California, and employment is at-will, you can reduce hours, but you must follow certain rules:
- Be careful about exempt vs. non-exempt employees.
- Comply with minimum wage and wage-hour laws.
- Provide written notice under CA Labor Code §2810.5.
- Be aware that employees may qualify for partial unemployment (California Unemployment Insurance Code §1256).
- A severance offer is allowed if voluntary.
- Document everything and avoid creating a fixed-term employment promise.
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I have a question about reducing employees' hours.
Lexi, Chatbot
I understand that reducing employees' hours can be a challenging situation. Is this reduction due to financial reasons?
I want to reduce hours without legal trouble. I was thinking of making a document explaining low workload and giving employees the option to quit with a month’s pay, or agree to part-time until business picks up.
Lexi, Chatbot
Are you currently facing any legal concerns or disputes about this?
I haven't made the change yet.
Lexi, Chatbot
Anything else the employment lawyer should know?
No.
Richard
I’m Richard, an attorney for over 25 years. Could you tell me how you plan to communicate these changes to your employees?
I’m trying to make a document for every employee and have them sign it.
Richard
Where are you located? Employment laws vary by state.
Stanislaus County, CA.
Richard
Do your current employee agreements mention anything about changes in hours?
No, but they were hired as “at-will employees.”
Richard
Since you’re in California, and employment is at-will, you can reduce hours, but you must follow certain rules:
- Be careful about exempt vs. non-exempt employees.
- Comply with minimum wage and wage-hour laws.
- Provide written notice under CA Labor Code §2810.5.
- Be aware that employees may qualify for partial unemployment (California Unemployment Insurance Code §1256).
- A severance offer is allowed if voluntary.
- Document everything and avoid creating a fixed-term employment promise.
Great. I don't know where to start.
Richard
I can’t provide legal forms, only information.
Should I make two documents—one for hours change and one for severance? I don’t want to lose employees or get sued.
Richard
Yes, generally:
- Hours Reduction Agreement – explains temporary hour change, effective date, and keeps employment at-will.
- Voluntary Severance Agreement – optional resignation with severance, voluntary, includes release of claims, and gives time to consider.
Communicate openly to maintain trust.
That is all. Thank you.
Richard
I hope I helped! Feel free to ask more questions.
Richard
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