Before You Unfurl That Plan To Furlough Employees — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Before You Unfurl That Plan To Furlough Employees

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in Human Resources,Office Management

Many companies and state governments are turning to furloughs as an alternative to laying off employees. Besides the obvious benefit of keeping workers employed, other potential benefits include not having to rehire and retrain employees when business improves; cutting overtime costs; avoiding the cost of paying severance; and avoiding potential legal risks associated with terminations.

 

Furloughs are not without fault, though. Layoffs or other cost-cutting measures may still be needed, and employees may be disheartened by the loss of pay. It is important that you understand the payroll aspects of a furlough before rolling out the plan; otherwise, you risk violating the federal Fair Labor Standards Act (FLSA).

 

Pay for furloughed non-exempt employees is straightforward. Non-exempt employees need only be paid for hours worked; they don't work, you don't need to pay them.

 

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