HR Hotline: Can We Furlough an Exempt Employee Two Days a Week?
Q: Can we furlough an exempt employee one or two days a per week and pay them the corresponding reduced salary?
Would they be able to collect unemployment for that one-two day reduction in salary? Can PTO days be used to offset the furlough until exhausted?
A: It is our understanding that salaried exempt employees may be included in the Connecticut Department of Labor’s Shared Work program, as an exception to the usual requirement that their weekly salary may not be reduced when less work is provided or performed.
When a company is approved to participate in the state labor department program, the wage and hour enforcement standards are relaxed to allow a reduction in weekly salary without losing exempt status.
Ideally, the shared work scheduled should be fixed at some reduced amount with a corresponding reduced, prorated weekly salary that then becomes the new fixed weekly salary for the designated reduced work week, supplemented by the Shared Work unemployment benefit amount..
A U.S. Department of Labor fact sheet includes a reference, Q&A #7, indicating this is permissible as long as the weekly salary hits the new salary threshold of $684 weekly for exempt status.
While $684 may not be a realistic amount for the reduced hours, it would certainly keep employers clear of federal standards.
Note that the Connecticut wage-hour standards have not changed along with the federal amount, so the state is still at $475 weekly, a much lower amount.
As for tapping into accrued PTO time, you could allow, or disallow, use of that time.
Keep in mind that if an employee is laid off, suggesting a more permanent separation, state law requires a payout of accrued, unused PTO time in accordance with your company policy or practice—meaning if you have a policy or practice of paying it out, you must continue to follow that.
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