Last month, I discussed the topic of furloughs, which have become an attractive option to employers in lieu of layoffs.

Recently, the United States Department of Labor issued a "fact sheet" that provided additional guidance for employers to some frequently asked questions on the topic. 

As the Employer Law Report said,  "While the fact sheet contains no new law or interpretation, in these economic times, it is extremely helpful for employers to have the DOL’s prior guidance on these issues consolidated in one sheet."

Among the questions that the guidance seeks to address:

  • If an employer is having trouble meeting payroll, do they need to pay non-exempt employees on the regular payday? (Yes)
  • Is it legal for an employer to reduce the wages or Photo Courtesy Library of Congress circa 1943number of hours of an hourly employee? (Yes, if minimum wage and overtime laws are followed)
  • Does an employer need to pay an hourly employee for a full day of work if he or she was scheduled for a full day but only worked a partial day due to lack of work? (No)
  • In general, can an employer reduce an otherwise exempt employee’s salary due to a slowdown in business? (Not for back work, though an employer and prospectively reduce future compensation so long as other tests are met.) 
  • Can an employer reduce the leave of a salaried exempt employee? (Yes, though in Connecticut, consider whether such leave is akin to accrued vacation.) 
  • Can a salaried exempt employee volunteer to take time off due to lack of work? (Yes, which allows an employer to deduct for a full day absence, but the voluntary nature of this will be challenged greatly.)  

Employers in Connecticut should continue to be aware that state labor laws may apply as well. (There are other options for companies facing difficult economic times, as well, such as the shared work program.) But the newest guidance provided by the U.S. Department of Labor will be a good start for employers having to deal with this thorny issue.