Can I Reduce Employee Benefits?

Can I Reduce Employee Benefits?

Handle this carefully and check contracts first.

By Marcia Smith

Sometimes it’s necessary to cut the running costs of your business – reducing employees’ perks and benefits can be an obvious way of lowering your staffing costs while maintaining the size of the workforce.

Whether you can impose these changes largely depends on what your employees’ contracts say. If the benefits you want to cut are not mentioned or if you have inserted a variation clause allowing you to make changes, then you can go ahead and reduce or axe the benefits. Otherwise, you will have to ask employees to accept a new contract, but they do not have to agree.

In all cases, however, it’s preferable to negotiate with employees so that they understand the reasons for your actions and are more likely to accept the changes without protest.