As a cost-cutting means for companies to avoid layoffs, the furlough has roared on to the work scene with amazing speed. When employers have closed facilities, laid off staff, reduced health-care benefits, and eliminated contributions to pension and savings plans, there are only a few things available to further reduce costs. It seems no industry or worker is immune to taking vacations without pay.
Q: My employer has announced that all employees will be required to take a 10-day furlough before the end of the year, and we’ve been asked to attend an information session and come with prepared questions. What do I need to ask? — Richard, Vermont
A: Richard, you may find that your employer has anticipated many of your questions, but here are the questions I would want answered:
- Health care: How will my eligibility and premiums be affected?
- Benefit costs: Will my cost for other benefits be affected?
- Paid time off: Will my sick pay, vacation time, and personal days off be affected?
- Vacation time: Can I draw on my sick or vacation time during the furlough?
- Unemployment compensation: Will I be eligible for full or partial unemployment benefits?
- Furlough dates: Will we have a have a choice of furlough dates?
- Uniformity: Will everyone have the same number of furlough days?
- Workload: How will we handle the work that “backs up” during the furlough?
Depending on the number of furlough days you face and how much advance notice you’re given, you may be able to plan reductions in your living expenses or even to arrange some short-term, part-time work. If your employer is requiring furloughs, it’s a sign of trying to protect your employment—and that’s a big thing these days.
Q: I received notice from my Human Resources department that all employees will be required to take a week without pay between July 1 and December 31. Can an employer just announce that we'll be out of work for a full week and receive no pay? — Matthew, Maryland
A: Employers may, and increasingly are, doing exactly this. About 15 percent ofemployers have instituted mandatory furloughs, and more are likely to follow suit. Furloughing workers is one of the ways to reduce payroll costs in hopes of avoiding additional layoffs until the economy recovers. Employers could just as easily reduce wage levels to save payroll dollars, but managers seem to judge the furlough to be somewhat more tolerable than outright pay cuts.