Salaried Furloughs?

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Aug 1st, 2010

Dude, where’s my paycheck?

While I like to fashion myself as the “Know-It-All Gnome” of HR, there are some things I don’t know. For instance, California’s recent furlough of workers has me thinking. Apparently, due to a 19 billion dollar budget deficit, California is furloughing state employees three days out of the month. But, does this type of furlough work for salaried employees?

Generally, salaried employees can be furloughed in increments of one week. When a furlough is for one or more full work weeks, payment of the weekly salary is not required. But, when a furlough is less than a full week, federal law generally holds that salaried employees must be paid their full week’s salary for any time worked in the given week. So, if your employee – while on furlough – takes 30 minutes to check their work email from home, they are entitled to their full salary for that week.

Since I already knew this tidbit about wage and hour law, I was confused as to how California could furlough all state employees (including their salaried employees) for three days out of the month. Assuming we’re all on planet Earth and don’t participate in intergalactic space travel, three days does not equal one week. So, when in doubt, I do what any reluctant lawyer does…I go to the federal regulations.

In this case, the governing federal regulation is the Fair Labor Standards Act (FLSA). According to section 29 CFR 541.710(b), which contains a special exception for public sector employees, California has every right to furlough their state employees. The provision states that: “deductions from the pay of an employee of a public agency for absences due to a budget-required furlough shall not disqualify the employee from being paid on a salary basis except in the workweek in which the furlough occurs and for which the employee’s pay is accordingly reduced.”

So, there you have it. 401(k) non-discrimination and WARN act responsibilities notwithstanding, California is in the clear when it comes to furloughing employees. Alas, we have an answer and I have added more knowledge to my gnome library.

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