Furlough

jds · June 2003

Due to budget problems, we have decided to do a one-week furlough. We are allowing employees the option of trading five accrued vacation days in lieu of going one week without pay. The employees who choose the furlough option will not work the week of July 4th, and will not get paid for any of those days. The employees who choose the accrued vacation option will work that week (except they won't work on July 4th) and will hand over 5 days of vacation in order to be paid. Any legal problems with this?

mtz · June 2003

It is my understanding that many employers are doing this. Many airlines are doing this and the State of Indiana government employees are allowed to do this. There is some examples out on the web of universities allowing it.

We are looking into it as well. The way we plan to handle it, is offer a one week furlough without pay. We aren't looking at the employee using existing vacation time to account for the furlough. We are looking into more than just one week.

I posted a similar message in the past with no responses. I don't think too many employers know about it.

jds · June 2003

Thanks for the response.

Hatchetman · June 2003

[font size="1" color="#FF0000"]LAST EDITED ON 06-04-03 AT 01:40PM (CST)[/font][p]Are you saying that if the employee works that week, the only way they'll be paid is if they give back 4 days worth of accrued paid vacation time? (I have no problem of not paying emplyees - exempt and non-exempt -- if they don't work at all during that week.)

I think you may have a legal problem with that? If an employee works, you have to pay him or her. Requiring that the employee "turns in" accrued paid time may be blatantly illegal in some states and is certainly contrary to the intent of wage and hour laws in the first place.

POPEYE · June 2003

>Due to budget problems, we have decided to do a one-week furlough. We
>are allowing employees the option of trading five accrued vacation
>days in lieu of going one week without pay. The employees who choose
>the furlough option will not work the week of July 4th, and will not
>get paid for any of those days. The employees who choose the accrued
>vacation option will work that week (except they won't work on July
>4th) and will hand over 5 days of vacation in order to be paid. Any
>legal problems with this?

As an employee, why would I want to work 4 days, be paid but have to give you 5 days of my vacation? Something just doesn't sound right both from a legal and an ethical aspect. Talk about a morale breaker! If you feel you must furlough for a week, why not just have everyone use that as a vacation week, get paid and not have to work. I have known several facilities that shut down and require everyone to take vacation at the same time.

pmaher · June 2003

I understand from previous legal advice that employees cannot take time in lieu of pay. I was also advised that only governmental agencies can do this but am sure it's different state by state.

Don D · June 2003

I may be dense, but it sounds like to me what you are describing is the age-old practice of an employer announcing a vacation week or shutdown week, during which most if not all operations cease, possibly with the exception of maintenance. Employers all over the country do this twice annually. I don't understand this terminology of 'giving up time' or 'trading vacation'. Typically, such periodic shutdowns are unpaid unless the employee has vacation built up and wishes to take it to keep a check rolling in.

It also sounds to me as if the employer is considering cancelling the July 4th paid holiday, which is also his right to do. If that is the case, he has a right to proclaim that the paid holiday observed in the past is history and if an employee wants pay for that day, he must take a vacation day.

But, if one of the options is to work all week long and trade in one's vacation to finance the payroll that week, that's insane! I have never heard of a situation where an employee both works a day and takes a day of vacation just to get himself paid. That is not creative accounting or proactive management; it's insanity and I would get a group together, take up ten bucks apiece and hand it to an attorney for advice. Get a hungry one.

Furlough

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