A furlough is a temporary, unpaid leave of absence, with an … The blog is a timely resource that addresses some of the most troublesome employment law issues for business owners, human resource professionals, other legal professionals, policy makers, and the media. Fax: 847-253-8822 It is up to the employer to permit the carry-over of annual unused vacation time and determine how many days employees can carry over. The stark reality of government quarantines, mass … One of the biggest points of confusion for many employers is whether they should terminate or furlough their employees, and what the implications are with each regarding payroll and benefits. In addition, employees must be educated about this policy, as well as have a fair opportunity to use vacation time. Answering an email or taking a work-related call can result in you being obligated to pay a week of salary to your exempt employees. Also remember that your employees are free to find employment elsewhere during a furlough period (employees under contract might present a different matter). Mandate employees to report to HR if they are diagnosed with COVID-19. It is a temporary period wherein an employer suspends work and pay of its employees with a plan (though not a commitment or guarantee) to start the work back up at a later period when the company can afford the payroll costs. An employee furlough is a mandatory suspension from work without pay. For example, under federal law and in some states, employers must pay exempt employees the same minimum salary for each pay period. If you want to avoid falling under the FFCRA and having to pay out such sick leave, it is important to let your employees know that their employment is being terminated. If those standards are not met, proper notice is given by the tenant and the repairs/fixes are still not made within the allowable time period, a tenant would be considered “constructively evicted”. While other states may vary, Illinois requires that employers pay out any accrued but unused vacation time or PTO once an employee is terminated. Once assembled, you can create a PDF of your eBriefcase. For example, the Illinois Wage Payment and Collection Act requires payment upon “separation,” which is not implicated by a furlough. The Workplace Transparency Act, effective at the beginning of 2020, places strict legal requirements on Illinois employers in the use of Severance and Release Agreements. 751, and may be subject to criminal prosecution and institution disciplinary action. Not suggested to take temperatures or require testing. Encourage washing hands often with soap and water for at least 20 seconds or use an alcohol-based hand sanitizer if soap and water not available. Recent laws may not yet be included in the ILCS database, but they are found on this site as Public Acts soon after they become law. This article constitutes attorney advertising. © 2020 by Navigant Law Group, LLC.All rights reserved. Federal and State Governments are considering paid family and sick leave acts, which have not been approved in most states. Employers can implement furloughs without giving employees notice. Employers may allow or require furloughed employees to use vacation, sick or PTO time. Illinois labor laws require employers to give each employee at least 24 hours of rest in every calendar week. As for benefits, their continuation largely depends upon what the plan terms are – minimum hours worked, paid vs. unpaid, and short-term or long-term are all considerations taken into account. If an employer is having trouble meeting payroll, do they need to pay non-exempt employees … Employers may require employees to take unpaid time off. A careful evaluation of employment policies, benefit plans, and applicable state and federal laws is essential to identifying the impact of a layoff or furlough and making the right decision during this difficult time. Partial Week Furlough Using Vacation Time or PTO: Furlough vs. RIF – The Basics. If a non-exempt employee performs any work, they must be paid for such work. Discuss possible accommodations with the employee, such as working from home. Depending on the state, a furlough may be considered a termination of employment triggering the payment of accrued PTO. Permitted by state law. If not available, consider allowing employees to borrow vacation time and whether such borrowing of vacation time should be subject to a repayment agreement. It is also important to note that, because a furlough is not a termination, employees are entitled to use their company-provided vacation, PTO, and sick leave as they normally would. Estimates differ, but news sources largely reported that hundreds of thousands of government employees were furloughed during this period. So, if you want to institute a proper furlough, make sure you communicate to your employees that absolutely no work is to be done during its duration. A furlough means "you are still an employee — there's just no work," Barron said. Selection of Furloughed Employees. As long as the exempt employees receive at least $684 weekly salary, they will remain exempt. In an effort to reduce costs, many employers are considering furloughs – unpaid leave – for exempt employees.However, furloughs can be a legal minefield, if not handled properly, according to the SHRM, the Society of Human Resource Management.. Welcome to the eBriefcase Management Center. Screen employees who may be at high risk of infection. During a furlough, unless stated otherwise by the employer, the employee can be terminated. during a furlough. For example, a truck driver that lives in Illinois but travels throughout the United States to perform their work is likely not covered by the Act. COVID-19 Vaccines are Here! If an employer sets up a partial-week furlough and uses vacation time for the furlough time so that the employees receive their usual salary, there is no risk of losing the exemption. An employer may set up a permanent change in the employee’s usual weekly schedule, such as changing the workweek from 5 days to 4 days and altering the salary to match. 4082 or 18 U.S.C. These tools allow us to track new or past website visitors and help us to understand how users move around our website. Notably, the Illinois employee must be offered, in writing, 21 days to think over signing the agreement, regardless of the employee’s age. Partial Week Furlough Deducting Employee Pay: If an employer set up a partial-week furlough and deducts the pay of exempt employees for the furlough days, the employees are at risk of losing their exempt status and may be entitled to overtime and other protections provided by law. The FFCRA doesn’t worry about whether your employees are getting paid – only whether they are considered an employee. We use this data to improve our website, including helping to make sure that our visitors can easily find what they need. All guidance is subject to change due to developments in health practices and laws. While other states may vary, Illinois requires that employers pay out any accrued but unused vacation time or PTO once an employee is terminated. The work has to be performed in Illinois for an employee to make a claim under the Act. All Rights Reserved. Emergency Family and Medical Leave Expansion Act. Your company reputation is important, so saving face and only using furloughs for reasonable periods of time can go a long way in allaying employee fears, staving off anger, and maintaining your reputation. Waltz, Palmer & Dawson, LLC If your furlough period is too long and your employees cannot survive without their paychecks, they can move on to the next company. Pritzker, to medically furlough all specially vulnerable prisoners for the duration of the emergency,” Alan Mills of the Uptown People’s Law Center said in a statement. On March 11, 2020, the World Health Organization officially declared the worldwide outbreak of the novel coronavirus, COVID-19, a pandemic. Employers may require employees to turn in company issued digital communications equipment and laptops to avoid working. So furloughs don't present wage and hour issues for most employees. Further, nothing in Illinois employment law addresses furloughs in the context of sick leave, either. The FFCRA makes absolutely no mention of furloughs. Require a doctor’s note to return to work (may be difficult and need to be flexible). However, the coronavirus outbreak has sparked new federal legislation that mandates paid sick leave under certain circumstances and expands FMLA coverage. For information concerning the relationship between statutes and Public Acts, refer to the Guide. If an employee is confirmed to be diagnosed: If an employee voluntarily discloses an immune disorder that would be affected by COVID-19, then: *Subject to employment agreements and other agreements. Make hand sanitizer and tissues available. Below are links to the Illinois and Federal WARN Acts: Please email or call your HMB Legal Counsel attorney with any questions about how these updates could impact your business. Employees are wondering how they are going to get paid and employers are wondering how they are going to pay their employees. Furlough is typically used for companies to avoid layoffs (that can lower employee morale and cost money for severance packages) or due to seasonal labor. However, there is no such requirement in Illinois for employees who have been furloughed. This has not been approved by the Senate as of March 17, 2020 at 11:00 am Central Time. As mentioned above, there is no hard and fast rule on the duration of a furlough. Encourage social distancing and spread workers 6 feet apart, if possible. 820 ILCS 140/2; IL Dept. Additionally, if a furlough is to last more than six months, employers will have to follow WARN Act requirements. If an employer sets up a weeklong furlough and doesn’t pay exempt employees, there is no risk of losing the employees’ exempt status. It can be easy to make mistakes and run afoul of the law or sound business practices when you feel rushed to take action, especially when it seems like there is a new federal law or municipal order being released every day. But these moments of high stress are the ones that matter most. If you don’t, you run the risk of violating several wage and hour laws. And under the FMLA, employees who are caring for a child whose school has closed are eligible for paid and unpaid leave. Your use of our site reflects your consent to allow these cookies to be placed on your computer to help you navigate the site. View Map | Driving Directions. © Horwood Marcus & Berk Chartered 2021. However, under California law, a furlough may trigger an obligation to pay earned wages on the last day worked, including a payout of earned but unused vacation or PTO. You may run the risk of losing competent, hard-working individuals who you expended time and resources to train. A furlough is simply a suspension from work without pay. 820 ILCS 115/5 (2020). Plan considerations should include cash flow concerns, remote working possibilities, IT considerations, quarantine possibility and company specific concerns. However, while there are no set legal restrictions attached to how long you can furlough, there are several matters of best practices that you should keep in mind when asking this question. Should employers make them mandatory for employees. The coronavirus pandemic is creating quite a lot of chaos within the labor and employment world. In Illinois, landlords must comply with city and county ordinances and state laws regarding housing conditions. ** If an exempt employee does not perform any work for the entire workweek, he/she does not have to be paid for that workweek. New Year, New Name… LET’S CHART A NEW COURSE TOGETHER! Encourage video or phone conferencing instead of in-person meetings, including for people in the same office or nearby cubicles. Those violations could result in an even greater financial burden on your company during an already precarious time. In short, furloughs are for when employers can’t afford employees, but don’t want to lay them off. The Employment Law Business Guide is a blog published by McLane Middleton’s Employment Law Practice Group. And on the subject of payments, you should definitely consider instituting a “no-work rule” during a furlough. When a furlough is for less than one full workweek and a … On Friday, the U.S. House of Representatives passed the Families First Coronavirus Response Act. Consider also allowing employees to use paid vacation time and comp time, if available. If an employer set up a partial-week furlough and deducts the pay of exempt employees for the furlough days, the employees are at risk of losing their exempt status and may be entitled to overtime and other protections provided by law. The material is for informational purposes only and does not constitute legal advice. However, there are some industries that see them regularly, such as construction companies that furlough their employees during the winter when conditions are harsh or a snow shoveling business that furloughs employees spring through fall but reopens each year during winter. In the event of a furlough, employers need to be careful that they do not assign any work and that employees do not perform any work such as checking emails, client follow up, etc. In 2001, Tellabs faced a severe econimic downturn and one of the options it selected to stem the crisis was to require all employees to take certain furlough days. Regardless if the furlough is due to layoffs or due to seasonal labor. In normal circumstances, this would be the end of the conversation regarding employee benefits. https://www2.illinois.gov/dceo/WorkforceDevelopment/warn/Pages/default.aspx, https://www.dol.gov/agencies/eta/layoffs/warn. But if you later realize you cannot afford to end the furlough and decide to terminate them, that time must be paid out. Under federal wage and hour laws, employers may typically cut an employee’s hours or pay, as long as the employee still receives at least minimum wage for the hours actually worked. **Workweek is a defined term usually defined in a company’s employee handbook. Encouraging covering your mouth when sneezing or coughing with elbows, but not with your hands. Ask if the employee has a fever, cough or shortness of breath or been diagnosed with COVID-19. Waltz, Palmer & Dawson, LLC is a full-service law firm with various areas of service to assist your business, including: Employment Law, Intellectual Property, Commercial Real Estate, Litigation and general Business Law services. Hourly employees must be paid for all hours worked. 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