More employers are turning to employee furloughs to avoid adding to the current unemployment rate — but some are unaware of potential problems.
When employers put workers into temporary non-duty, non-pay status (for budget issues, lack of work, non-disciplinary reasons, etc.) it is considered a furlough. Employee furloughs can be voluntary or mandatory. Example: requiring a group of employees to come in every other Friday without pay on the days they don’t.
The benefits employers see with furloughs include:
- better on morale than layoffs, and
- cost savings on rehiring and training when the market rebounds.
But there are legal considerations to take into account when it comes to employee furloughs. For example, Federal law mandates that if any part of a week is worked by an exempt, salaried worker, then the whole week must be paid.
If you are still interested in this tactic with exempt employees, a full, week-long furlough is a safe bet legally.