New Policy - Adding to Leave Balance In Lieu of Holiday Pay
HR Lady
11 Posts
Our company, like many others in this economic down turn; have used furloughs as a cost savings measure. Each employee has been furloughed for the equivalent of one week each month since May. I say the equivalent, as depending on the employees classification and leave balance, they are able to break that week up during the month (e.g., every Monday in the month of September - totaling 40 hours) or take their week uninterrupted (one full week at a time - Monday to Friday each month). <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Of course the choices available depend on the salary status and leave balances. Our company understands the obligation to and comply with our obligation to pay salaried employees a full week’s wage for anytime worked during a work week, with the exception of partial first and last week of employment etc.
During any week that a holiday that we recognize and pay for occurs, we furlough the whole workforce (no exceptions) for the entire week during a holiday that we recognize and pay for occurs. Except for December, that never amounts to more than one week at a time. Any other month, the employees get to choose their week off themselves.
Our President was asked to allow employees to change the holiday pay policy to allow employees to choose to be paid their 8 hours of holiday pay, or get that 8 hours added to their leave balance for future use. The idea is to allow employees furloughed for a full week, during a week like Thanksgiving, where they would receive two days of holiday pay (thanksgiving and the Friday after) to not be paid. This way, they would receive the maximum amount of unemployment insurance for that week. <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Holiday pay often means reduced or no unemployment insurance depending on the amount received.
What say the panel?
Comments
Sounds OK for hourly employees because such pay is optional for the employer.
Definitely not OK for exempt employees because such pay is mandatory if the holiday falls on a regularly scheduled day.
[quote user="HR Lady"]Thanks TX. Where the salaried employees are concerened, couldn't they be included during the weeks where no work at all is performed, therefore, no salaries are owed. During the upcoming Thanksgiving, Christmas and New Years weeks, the company will furlough all employees for the full week during which those holidays occur. Why wouldn't it be fine for a salalried employee to choose the no holiday pay option during these weeks when they perform no work at all?[/quote]
If the cause of not working on any particular day that is normally scheduled for work is because the company has no work (is closed for weather, random reason, whatever), then an employee paid on a salary basis as defined in FLSA is entitled to a day of pay that day. If you are going to furlough people for the entire week, then they aren't entitled to anything. If you choose to give them a day of leave, why not just give them a day of leave and not say in any official manner that it is for anything other than the company's grattitude for employee loyalty during these hard financial times?
[quote user="HR Lady"]If we say that the extra days of leave are for the company's gratitude in hard fincial times, then won't we still have to pay the holiday pay during the week of enrite furlough? This defeats the employee's request to chooose not to be paid for an entire week that they do not work, with the express intent of getting the maximum amount of unemployment insurance that they can receive in this state.[/quote]
Why would you have to pay anybody anything when they're off for the whole week?
Dear employee:
You are on involuntary furlough next week. In gratitude for your loyalty to the company during these hard economic times, the company will add one day of leave to your leave bank on monday following the furlough.
Sincerely,
P. R. Esident
We don't generally pay anything when employees are furloughed for a whole week, unless a paid holiday like Labor Day Thansgiving, (which we have traditionally paid 8 hours of holiday pay) falls on a furlough week.
So even though our handbook says we pay 8 hours holiday pay for example on Thanksgiving, we can change the offical policy to say that,
Dear employee:
You are on involuntary furlough next week. In gratitude for your loyalty to the company during these hard economic times, the company will add one day of leave to your leave bank on monday following the furlough, in lieu of paying 8 hours holiday pay. This way you can apply for and receive the maximum unemployment insurance payable in this state for a full week without work.
[quote user="HR Lady"]Thanks for your patience. I found all your posts valuable. [/quote]
Very glad to help. [Y]