Furloughs raise questions about worker rights

Eve Tahmincioglu • Profile • E-mail

There’s been a furlough frenzy in corporate America lately, and employee rights may be getting lost in the shuffle.

Major companies such as Dell Inc., Gannett Co., American Airlines Inc. and DuPont Co. already have announced plans to send workers home for a few days or a few weeks without pay as a way to cut costs, and a growing number of employers are jumping on the furlough bandwagon.

But many labor experts say it’s created a “Wild, Wild West” in the workplace, with many employees and employers unclear on what such furloughs will mean to morale, productivity and adherence to the nation’s labor laws.

“The stakes are high,” says Barbara Poole, president of EmployAid, an online resource for employees and HR executives. “The entire dynamic between workers and employers has been turned upside down, and the rules are being made up as we go along.”

In a scramble to deal with a sputtering economy, some companies have opted to use furloughs instead of, or as a supplement to, layoffs.

According to a survey of 141 human resource executives by consulting firm Watson Wyatt, 17 percent of employers surveyed in April said they had initiated mandatory furloughs, up from 11 percent in the previous month. Another recent survey by human resource company Hewitt Associates survey of 518 U.S. firms found that 70 percent had implemented or were considering implementing furloughs.

Even though it’s better than the alternative — getting laid off — it still can cause economic hardship for employees, and it could come back to haunt employers.

“As this happens more and more, there are sure to be issues, and speculatively, there could be a wave of suits or charges,” says Loree Griffith, a senior consultant with consulting firm Mercer, about workers who may come to believe they were furloughed illegally. Maybe an employee was out on furlough, he explains, and felt they had to answer an e-mail from the boss or do work at home. That’s a no-no under labor laws.

And some mass, extended furloughs could be layoffs in disguise, says Rene Roupinian, an attorney with Outten & Golden, a law firm representing employees. This would allow some employers to thwart layoff notification under the federal Worker Adjustment and Retraining Notification Act, she says. If a worker is laid off after a furlough, the Act would kick in on the first day of that furlough, and workers could be eligible for 60 days pay if their employer has more than 100 employees.

Many questions, few clear answers
Clearly furloughs are anything but simple alternatives to layoffs. As a result of the recent furlough-mania, I’ve been getting many questions from readers about their rights:

• Can I be furloughed if I’m salaried?
• Can I file for unemployment insurance when I’m on furlough?
• What if I work a bit while on furlough?

Unfortunately, the answers to these questions are not clear-cut, and some vary by state. Even getting guidance from the U.S. Department of Labor on furloughs has not been easy.

I repeatedly asked Labor Department officials, via telephone and e-mail, specific questions on furloughs and employee rights, and it took nearly a month to get a straight answer.

The agency recently came under fire for its lack of responsiveness to workers in a Government Accountability Office report, and new Secretary of Labor Hilda Solis has vowed to deal with the problem by adding more employees and field investigators.

While her comments are promising, the difficulty I had in getting basic information on labor laws points to how difficult things are right now for employees who are seeing so many changes at their place of employment.

To help out, here’s an overview on what your rights are when it comes to furloughs based on my discussions with labor lawyers, my reading of the labor laws and finally, some concrete information from officials at the Labor Department’s wage and hour division.

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