Private employers in Baton Rouge may want to monitor the recent developments regarding proposed changes to employment law in Louisiana. The proposals would impact the laws that govern the pension plans of public workers employed by the state.

Louisiana, like most other states, faces economic hardship and is looking to public employee pensions as a possible way for the state to save money. Should the state legislature approve such changes, current state employees may be required to work longer hours in order to receive full pension and retirement benefits.

The proposed legislation should cut costs to the state but may have unintended consequences, since many state employees are near enough to retirement that they may decide to retire before any changes are enacted. As with any business, experienced employees can be difficult to replace and are costly to train.

The economic recession has affected the private sector as well as the public sector, and private employers are also looking for ways to reduce the cost of business. Maintaining a business that is financially efficient is a paramount concern for business owners everywhere.

As employers face similar issues and work to cut costs and run business smoothly, they should consider all the consequences associated with employee income and benefits. Reducing the number of employees on payroll is one way to cut costs. Another is to reduce or change the way certain benefits — such as retirement plans, health insurance or vacation policies — are structured.

Any time such changes are made, Louisiana employers must ensure they follow state laws and employee contracts. In some cases, benefits may be contractually designated, and any changes could open business owners to costly employment litigation.

Source: nola.com, “Elections office could lose key people to pension overhaul, secretary of state says,” Jeff Adelson, April 20, 2012