Human Resource Blog

Furloughs Part 2 (voluntary furlough)

Thank you for your speedy response to my first furlough question, but I have a follow-up question on furloughs and exempt employees.

One of the things I failed to mention in my first post is that we’re a public institution and I’m referring to

29 CFR 541.5d - Special provisions applicable to employees of public agencies, which states

(b) 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.

Does this mean that we can have our exempt employees furlough, thus reducing their pay, and we will not jeopardize their exempt status?

Yes, city, county and state governments can furlough an exempt employee for a day or a few days, and reduce the employees salary accordingly. Many times, the agencies are required to do so by their respective governments. This is the only case were an employee furlough of less than an entire payroll week can be unpaid.

This is a very common money-saving technique that states and cities use, and it is being employed right now from Chicago to Texas.

To be on the safe side, contact the Wage and Hour Division of the U.S. Department of Labor to be sure that this provision applies to your agency.

Again, we note that for exempt employees of private employers, only a furlough of a payroll week or longer can be unpaid.