In previous posts, I’ve argued that employers should consider alternative ways to deal with our economic crisis instead of relying almost exclusively on layoffs. One alternative is a pay cut for all employees, and there’s evidence to support the pay cut alternative.

However, as the recent breakdown in negotiations over the big three auto bailout shows, that’s not always going to work, particularly when employees are represented by a union. (Click here for an article in the New York Times and here for an article in the Washington Post.) Republicans in the U.S. Senate demanded that the automakers cut wages and benefits to match those paid to Nissan, Toyota and Honda employees, who aren’t represented by a union. The United Automobile Workers, which represents employees at GM, Ford and Chrysler, balked at the proposed changes — at least, until the U.A.W. collective bargaining agreements expire in 2011.

If a collective bargaining agreement controls wages and benefits, then it has to be amended for there to be a change. Historically, union leaders and union members have resisted this kind of proposal. U.A.W. leaders are obviously against making pay cuts part of the bailout. Even with the extraordinary circumstances they find themselves in, union members appear to support their leaders.

For non-union employers, the pay cut alternative is somewhat easier. There’s no collective bargaining agreement. If your employees are working on an at-will basis, you can probably impose a pay cut on a unilateral basis. Beware of pitfalls, however. Your employee handbook or personnel policies could prevent this. Some state statutes forbid employers from arbitrarily imposing a change in compensation. If you have individual contracts with some of your employees, there could be provisions making a unilateral pay cut impossible. If a pay cut disproportionately impacts one of the protected classes, you could be sued for discrimination.

But a unilateral pay cut would be counterproductive and probably not much better than a layoff in terms of impact on employees. I’m talking about proposing a pay cut to your employees as a way to avoid layoffs and getting their buy-in. Right now, I think most employees would gladly take the cut. They may have questions: how long will it last; will lost pay ever be made up; could there still be layoffs? Asking your employees to help solve this economic crisis would be novel this day and time, but something novel is needed. The layoffs are making the recession deeper and prolonging the time for meaningful recovery.

If you have a union, you’ll need legal advice on how to proceed with a pay cut proposal. Even if you don’t have a union, you’ll need legal advice. Make sure you don’t run afoul of state laws. Make sure your communications to your employees don’t cause unintended problems now or later.

Or, we can continue down the layoff path; learn how many employees are being laid off every day; and wonder how long it’ll last and whether we’ll be next.