Page 67 - BusinessWest April 27, 2026

LAW >>
When Savings Aren’t
Savings
How to
Control Business
Costs While
Reducing Risk
BY TANZI CANNON-ECKERLE, ESQ.
When employers cut costs, the
wrong cuts can get expensive fast.
As employers head into the
second quarter of 2026, a lot of
businesses are in the same mode:
cut costs, stay lean, keep moving. The problem is
that some ‘savings’ decisions don’t save anything;
they just shift the spend from payroll to legal fees,
investigations, back pay, and distraction. Here are
five cost-cutting moves I’m seeing right now that
can blow up fast, and what to watch before you
make them.
1. Cutting Payroll by Restructuring Too Fast
Layoffs, role consolidations, and schedule
cuts are classic budget levers. They’re also where
employers make avoidable mistakes. Massachu-
setts final-pay rules are strict, and wage and hour
claims can come with automatic treble damages.
If you’re moving fast, slow down just enough to get
the basics right: final pay timing, earned vacation
where required, clean documentation, and accu-
rate time records.
2. Reclassifying Employees as 1099s to Save
on Benefits and Taxes
This one looks like an easy win on a spread-
sheet. In practice, it’s a liability magnet. Mas-
sachusetts uses a tough independent contractor
standard (the ABC test), and misclassification can
trigger wage claims, tax exposure, and insurance
issues all at once. If the job walks and talks like
employment with a set schedule, supervision, and
core business work, then the 1099 label won’t
hold.
“The problem is that
some ‘savings’ decisions
don’t save anything; they
just shift the spend from
payroll to legal fees,
investigations, back pay,
and distraction.”
Business W est << LAW >>
APRIL 27, 2026
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