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Employee Furlough FAQs

 

 

What is an employee furlough?

 

An employee furlough is a mandatory suspension from work without pay. It can be as brief or as long as the employer wants. An organization may furlough employees as a cost-saving measure when it doesn't want to lay off staff but lacks the resources to continue paying them.

This information is up to date as of the above date. We are monitoring the Families First Coronavirus Response Act (FFRCA) and similar legislation that may require pay during COVID-19 closures or leave, and will provide updates as they occur.

Can an employee work while on furlough?

 

No—furloughed employees must not do any work on behalf of their employer whatsoever. If a salaried employee does any work while on furlough the employer must pay them the equivalent of their salary for the entire day. If an hourly employee works while on furlough the employer must pay them for the time worked. To ensure that well-meaning employees don’t engage in activities that may inadvertently trigger the no work rule, furloughed employees typically have their access to work accounts and devices revoked.

 

Are there notice requirements when employees are placed on furlough?

 

Employees should be notified of the furlough. When possible, reasonable advance notice must be given to employees before the furlough begins. In addition, furloughs for longer periods of time may be affected by the federal Worker Adjustment and Retraining Notification (WARN) Act and some states’ WARN laws. For example, in California, 50 or more employee furloughs may trigger California WARN Act notice obligations.

 

What are the differences between a furlough and a layoff?

 

There are four key differences between a furlough and a layoff: 

(1) Furloughed employees have an expectation that they will return to work. Typically, an employer will give furloughed employees either a specific date or a specific condition for resuming duties. 

(2) Furloughed employees typically retain access to any health and life insurance during the furlough. 

(3) A furloughed public employee retains their employment rights. Government employees cannot be fired or replaced without process. For a public employee who has been furloughed, rather than laid off, this means that they have a presumptive right to return to that position if they choose and it exists. 

(4) A furlough is relatively seamless. Laying off employees requires significant process, as does hiring new staff. This can be time consuming and expensive. By contrast, a furloughed employee can come and go fairly easily.

 

What rights does a furloughed employee have?

 

Furloughed employees have the right to seek new employment. For an employer, one of the main risks of this process is that their top talent will get jobs elsewhere. Many employees consider taking temporary jobs during a furlough. They should check carefully for rules against outside employment and/or second jobs, as their employer is free to enforce these policies even during a furlough. A furloughed employee may also be able to claim unemployment benefits for their time without pay. Each state has individual rules for collecting unemployment, including (potentially) waiting periods to collect benefits and a requirement that the applicant show an active job search. Either or both of these may disqualify a furloughed worker. Further, furloughed workers who receive back pay for their time away from work will typically have to pay back any unemployment benefits they collected.

 

How do I furlough a worker in Zenefits?

 

First, there are some things you need to do outside of the Zenefits system.

 

  1. Be aware of state and local laws as related to furloughed employees.
     
  2. Determine whether or not employees will continue to receive benefits during furlough. For those who will have benefits coverage cease, work with your COBRA provider for notices.
     
  3. If employees are still expected to pay a employee portion of benefits, arrange for how they’ll pay that.

Once you've taken care of the work outside of Zenefits, you can take the following steps inside the system. Please note that if you follow these steps, you will continue to be charged as per your Zenefits billing scheme. You are still charged as usual for workers on leave or on furlough in Zenefits.

 

  1. After the last pay run is done, remove the furloughed employees from payroll.
     
  2. Change any PTO accrual rates to 0.
     
  3. Using the Leave of Absence (LOA) tool, you may track the furloughed employee on an unpaid LOA policy.
     
  4. If the furloughed employee is tracked using leave of absence, process an LOA change within the Benefits Administration app for the employee’s benefits.

 

 

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