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Involuntary Furlough

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State governments, universities, nonprofits, and businesses alike are instituting furloughs of varying length. Some of the longest are four weeks within a calendar year or two days each month. That’s the equivalent of about an 8 to 9 percent pay cut. Others are more limited, typically one day a month or one to two weeks in a year. Unfortunately, some manufacturing companies are planning furloughs of up to several months at a time.

Some employers first ask for volunteers or allow employees to choose when to be off work. Others are mandating the duration and exact dates of furloughs to avoid conflicts with employment laws. So, in a word, yes, employers have resorted to this lesser of two evils because they are trying to hold their workforces together in hopes of better days.

Employers will have to structure their furlough policies to avoid some legal issues. For example, salaried or “exempt” employees (those who don’t qualify for overtime pay) will most likely be required to take a full week’s furlough rather than individual days. Furloughed employees are not permitted to perform any work from home—not an easy thing to do in this age of BlackBerries and unlimited e-mail access. Unionized employees covered by collective-bargaining agreements are generally protected from unilateral furloughs. Hourly paid, nonunion employees have the least protection in most cases. The only comfort is that furloughs may permit workers to keep their jobs and benefits.

Q: We’ve been told that we will be furloughed two Fridays each month at least through December of this year. My pay will decline by almost 10 percent, and I won’t be able to find a part-time job for only two days each month at a pay level anything near what I earn now. Will I qualify for state unemployment compensation? Marlene, North Carolina

A: It depends. Because unemployment laws vary by state, there is no simple answer to your question. In general, a furlough will have to be five consecutive days to meet the “waiting period” common to most states. Still, go ahead and file. Subsequent furloughs may then qualify for unemployment compensation, because you will have met the initial waiting period. If your furlough is longer than five work days, you might qualify for unemployment payments.


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