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Employment Law: A Furlough With Exempt and Non-Exempt Employees

A man working on his computer at home

The operations of essentially all business enterprises in the U.S. are now being affected by the COVID-19 pandemic. While many employees are able to work from home, others are not. Whether to mitigate the spread of COVID-19 or because of the downturn in the economy that COVID-19 has caused, many in our community have been required to take furloughs. Part of the uncertainty is not knowing your rights under these circumstances.

What Is a Furlough?

A furlough is a temporary reduction of an employee’s work hours, or pay, or a temporary suspension due to lack of funds. Employers may require furloughs during times of crisis when they do not have the resources to continue to pay employees but don’t want to fire or lay employees off. Unlike being fired or permanently laid off, employees on a furlough may be able to return to their old jobs once the employer deems it possible.

What Are My Rights While on a Furlough?

First, the selection of furloughed employees must be on a completely neutral basis. An employer cannot select employees to furlough based on race, sex, age, disability, religion, etc.

Second, although individuals on furlough do not receive regular pay, they are still employees. Employers generally continue to provide fringe benefits but are not required to do so.

Additionally, while employers are legally allowed to cut hours, employees cannot perform any work for their employer without pay (whether from home or the workplace). Any work, no matter how brief, breaks the no-work rule. An employer must pay an exempt employee the full predetermined salary amount "free and clear" for any week in which the employee performs any work without regard to the number of days or hours worked. An employer must pay a non-exempt employee for any time worked.

Employers are also legally allowed to cut pay. If you are a non-exempt employee your pay cannot be reduced to less than minimum wage. If you are an exempt employee, there is also a minimum weekly wage that employers must abide by. If your weekly wage falls below the weekly minimum requirement, you can be converted to a nonexempt employee.

Employees are also entitled to seek new employment or to apply for unemployment benefits for their time without pay. Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on March 27, 2020, employees who have lost work as a result of the COVID-19 pandemic—including being furloughed—are entitled to expanded rights to unemployment benefits.

What if I’m on Call?

Whether on-call time is considered work time depends on the circumstances. An employee who is “engaged to wait,” such as a firefighter waiting for an alarm, is considered to be working during a time of inactivity. An employee waiting to be engaged, who leaves a number where they can be reached when work is available is not considered to be working during time of inactivity. Employees who perform part or all of their normal job duties during a furlough day are working while performing such duties.

Is My Old Job Guaranteed?

How long the furlough lasts is up to the employer. While the hope is that furloughed employees will return to their old jobs, it is not a guarantee. Some employers provide that a furlough will be converted into a layoff after a fixed period of time, such as six months or before unemployment benefits are exhausted. At this point, furloughed individual employees cease to receive employee benefits and become eligible for termination benefits.

What Remedies Are Available to Correct Violations?

An employee may file suit to recover back wages, and an equal amount in liquidated damages, plus attorney's fees and court costs.

Contact Us Today

The COVID-19 pandemic is affecting many different industries and employees during this time.

If you are in need of an employment law attorney, call Chung & Ignacio, LLP at (909) 726-7112 or fill out the contact form on our site.