Economic Analysis of Reductions-in-Force (RIF) and Pay Equity

The current economic and legal environments have drawn increased attention to economic and statistical analyses involving layoffs and pay equity. The economic downturn that started in late 2007 led to a large number of layoffs or reductions in force ("RIFs"). The RIFs started mostely in early 2008 and continue through 2009. Many companies affected by this economic downturn looked for statistical analysis to examine whether their restructuring plans would have had a disparate impact on federally protected employee groups. The passage of the Lilly Ledbetter Fair Pay Act ("LLFPA"), the first legislation signed by Presdient Barack Obama in January 2009, has also prompted companies to review their comparative pay statistics. These two forces combined have increased the demand for disparate impact analyses of RIFs and for pay equity studies. This chapter review these two types of analyses and the economic and statistical tools used in each.

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Citation: Bainbridge, Flavia, Mark Gustafson and Debo Sarkar, “Economic Analysis of Reductions-in-Force (RIF) and Pay Equity,” in Litigation Services Handbook: The Role of the Financial Expert, eds. Weil, Frank, Kreb & Wagner, 2011.

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