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Reality Check: California Labor Law and the Dreaded Furlough

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Sacramento, CACalifornia labor law is designed to protect workers from unfavorable behavior on the part of employers. The problem: recent efforts by the State of California to mandate furloughs as a means to save money serves as an affront to California state labor law and the very statutes the state sponsored in the first place. And now, the private sector is getting in on the game, which could further erode California labor employment law.

There is little doubt that the State of California is in fiscal trouble and drastic measures were needed. However labor unions disagree with the mandated furlough—time off without pay—and have been litigating against the state, and the Governor's office in an attempt to try to force a reprieve.

California WorkersLast month the California Correctional Peace Officers Association became the latest labor organization to file a petition against the state and the office of Governor Arnold Schwarzenegger, in a bid to have the furloughs reversed.

The problem is that private industry has caught the furlough bug as a means to save money and protect the bottom line in a worsening economy. It's the 'in thing right now,' according to labor insiders. 'Furlough' is the new buzzword and it appears as if everyone is jumping on the bandwagon.

The idea is not new. The manufacturing industry has been relying on the furlough for years, but under a different name: 'annual shutdown.' Manufacturers will often shut down the assembly line and send everyone home for a week or two, usually over Christmas when inventory is high and people aren't buying. Annual shutdowns in the manufacturing sector for a week or two are fairly common.

But now the idea has caught on in non-manufacturing sectors. It was announced early in the New Year that Gannett, the newspaper-publishing giant, would require all employees to take a week's furlough sometime within the first quarter. That's a week off without pay, and one un-named Gannett journalist referred to the mandated furlough as "banishment."

Furloughs have been lauded as one way to fight the recession, and to spread the pain around. Employees who agree to a furlough in an effort to avoid layoffs are helping protect jobs for their fellow workers. President Obama said as much when he remarked about "the selflessness of workers who would rather cut their hours than see a friend lose their job."

However, more often than not it's a case of employers forcing the furlough on employees who can least afford the dip in pay, such as a single mother. And there's been talk of some healthy, and profitable companies enacting furloughs, whether they are needed or not, because they can. They've decided to catch the wave, save some money and increase profit and returns on investment at the same time. And they're doing it on the backs of their employees, some of whom can least afford the loss of income.

But it could backfire on them. At least in California, according to state labor law—and it could nip at the heels of other employers in other states, as well.

One area in which there could be a problem, labor experts suggest, is when the furlough affects salaried employees who are normally exempt from overtime. As most know, the State of California dramatically lowered the exemption threshold for computer workers, for example, to an annual salary of $75,000. Employees at that level, many of whom have written contracts, may have a claim if their salary falls below that amount, such as might be the case through a mandated furlough.

Additionally, if the salary falls below $75,000 as the result of the furlough, the employer may lose his overtime exempt status for that employee. That employee could have an overtime claim for the remainder of the year.

There are other issues that could trigger violations in labor laws, according to experts. An employee furloughed from the workplace should not be required, or feel compelled to do any work from home. Were a non-exempt employee work as such, the law requires that he be paid for the hours worked.

And what about a salaried, overtime-exempt employee who is furlough for, say a week? That employee should not do a lick of work while at home. Emails, text messaging, the reading of reports…nothing. Were that employee to perform even a few hours of work from home, according to labor law she should be paid for the entire week.
Even if a worker is disciplined for electing to work while on furlough, that worker must be paid, according to labor law.

Obviously, if an employee were mandated to work unpaid overtime in an effort to make up for the furloughed time off, that too is a no-no.

"In some cases, employers are doing what they have to do to survive in a bad economy," says Lewis Maltby, the president of The National Workrights Institute in comments to MSNBC. "But in some cases, greedy employers are trying to squeeze work out of employees without paying them for it."

The state of California's finances notwithstanding, the Governor's gambit that the furlough will stem the fiscal bleeding could run into a brick wall with California labor law. Employers buying into the furlough should be careful to heed California labor employment law. Those that do not could expect lawsuits from disgruntled employees who feel taken advantage of by employers openly thumbing their noses at California state labor law.

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Posted by

My company furloughed all the little guys and all the higher ups worked on the furloughed days and also worked overtime for the week. Is this legal?!

Posted by

What a greedy company? Talking about IBM who gives furloughs to non IBM employees, hires new employees, post quarter gains, and gives each other bonuses. All these at the stake of giving non IBM employees days without pay. IBM has the courage to laugh at their face and then call them a team.

Greedy company.

Posted by

What a greedy company? Talking about IBM who gives furloughs to non IBM employees, hires new employees, post quarter gains, and gives each other bonuses. All these at the stake of giving non IBM employees days without pay. IBM has the courage to laugh at their face and then call them a team.

Greedy company.

Posted by

Another recent complaint about IBM treating contractors like they do not exist.

Last meeting. Non IBMr asked question to IBM Representative "Are furloughs or non-paid days going to continue every quarter?" IBM Representative answer with a laughter at the end "To my knowledge, No; however, think of this as the last one for the rest of the year. Hahaha."

Follow up question from another non-IBMr. "Were all employees including IMBrs affected by taking these 5 non-paid days? Answer "No. Just non-IBMrs; however, we are not allowing IBMrs to work overtime hours."

This is too great of an insult. On the second quetion it sounded like non-IBMrs can work overtime but we know from experience that they forbid everyone.

Next IBM Speaker comes up and says. Gents welcome our new hires.

Really, they are making us take 5 days unpaid and continue to hire. Taking 5 days unpaid means that the company is running out of funds. Really... They post earnings every quarter. Wonder how much it is their 4th quarter earnings for 2011.

Posted by

IBM is forcing furloughs on sub-contractors and some are lucky that they were exempted, as I found out later after sitting at home reading e-mail. All who suppossely were suppose to be on furlough received a letter from our respective sub-contractor. It is funny because supervisor stated that all sub-contractors were affected not only myself. I asked around and I found someone who was exempted from this furlough and that is how I found out there was a list of 20 individuals who were exempted. Of course, I was not one of them on the list. On another note, IBM keeps asking us to submit vacation through their vacation scheduler and they push and push; however, how do they want us to take vacation when most of their sub-contractors do not have vacation. This company states that we are all one team, but when it comes to it, they treat sub-contractors like 3rd world citizens. Is there a lawsuit all ready pending so that I can be part of this? Please post and provide me how I can. Thank you.

Posted by

IBM is forcing it's sub-contractors on some accounts it provides IT support service to take mandatory furloughs. What I find questionable ethically is that those employees have been advised not to inform their client of this fact. (the company to which they actually provide IT support)

Posted by

I work for a California Community College District. Due to budget cuts and such, this District is telling us that mandatory "Furlough" between January 3-9, 2012 will start and their will be NO PAY.
Now, they are stating that if, during that particular week there are deadlines that must be made and the employee has to work in order to get the tasks done, like Payroll and the reporting of STRS and PERS contributions to the STATE of CA, and also the Variable Payroll for our employee's who are paid on the 10th of January. would work during the Furlough, BUT, THEY CAN PICK THE AMOUNT OF DAYS THEY WORK DURING FURLOUGH, FOR OTHER DAYS TO TAKE OFF. This reminds me on COMP TIME, which I don't think is legal. We normally don't have or ever had comp time. In this case, I am talking about "Classified Employees'" in a CA College District.

So, I need help in knowing if this is legal or not and what can I do. During this Furlough and no pay, can I claim "Unemployment"?

Thank you and have a pleasant day.

Posted by

My wife is on a 90 day Furlough. Is this "Legal"


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