Unpaid Furloughs Instead of Pink Slips

How both employees and employers can benefit

Consider a tiered furlough system. Try to reduce the economic burden on lower paid employees by implementing a tiered furlough system that will give higher salaried employees more days off without pay. “Usually, the people who are highly compensated can make out [okay] on a furlough,” says Alston.

Give ample notice. Try to plan furlough days well in advance to give employees enough time to prepare financially, advises Alston. Spread the furlough days across a period of time instead of insisting that they all be taken during one pay period. McNealy alerted his staff and faculty about the furlough plan in February and scheduled furloughs in March and July, which allowed for a break between decreased pay periods.

Don’t force employees to work. Employers must make sure that they abide by the federal Fair Labor Standards Act (FLSA). Non-exempt (hourly) employees can be easily furloughed, but exempt or salaried employees are entitled to full weekly salaries for any week they perform work, even if it is less than a day’s work. As such, employers can only furlough exempt employees for an entire week, not day by day.

Despite the law, some employers make employees feel obligated to work on a furlough day. Alston highly recommends that HR departments enforce furloughed days within FLSA guidelines and reduce the risk of workers compensation problems.

ADVICE TO EMPLOYEES

File for unemployment insurance. Eligible furloughed employees can apply for unemployment benefits depending on the state they live in. Be diligent about understanding when and how to file, says Alston. In most cases, payments are not retroactive. For more information, visit your state’s unemployment office or contact the U.S. Department of Labor.

Get paid or gain experience. If it won’t strain your wallet, consider using your time off to volunteer or pursue another professional development. Take a class, obtain certification for a skill set, or volunteer your professional services to keep your faculties sharp. If money is an issue, seek out freelance, consulting, or part-time work to make up for lost income. Or use this time to start your dream business.

Relax, and conserve money and energy. For most, this isn’t a time to spend a ton of money—throwing a big backyard barbeque for all of your friends and family, or taking an extravagant three-day-weekend vacation. Alston suggests that you think of your furloughed days as a time when you will be able to save money on gas, food, and other incidental expenses that occur throughout the workday. Finally, relax and enjoy the benefit of having a day off so that you will have plenty of energy to face the mountain of tasks that will pile up while you are gone.

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