AS VIRUS SPREADS, FURLOUGHS POSSIBLE

It was a feel-good moment in Connecticut heading into 2018 holidays, as communities statewide mobilized to lend a hand for federal workers who found themselves on the wrong side of forced furloughs which extended more than a month, as part of a government shutdown during budget sequestration negotiations.

Only 15 months later, more people could become familiar with the furlough process, as business owners contemplate their options to ride out what they hope will be only a short-term disruption, as the economic effects of the novel coronavirus Covid-19 ripple into Connecticut.

With President Donald Trump suggesting Monday that a payroll tax reduction or holiday is among the options being weighed by his administration, for some businesses facing major losses in customer patronage, cutting payroll itself could be the only realistic option to minimize any losses that could threaten the viability of the company itself.

In some corners of the private sector, temporary job furloughs are a fact of life as businesses bring back together a set of experience hands to coincide with bursts of expected activity, followed by alternating lulls. But often those fluctuations are set up to accommodate work in established business cycles, with the coronavirus outbreak posing the problem of an unexpected disruption of unknown duration.

“For firms who can ‘play chess’ and think four-to-five moves ahead, they are already seeing the signs of their business drying up ... and in those cases they are already making their plans for layoffs or furloughs,” said David Lewis, CEO of the Norwalk-based human resources firm OperationsInc. “We’re already getting calls about how we can help clients in this situation. Our advice is that businesses take a close look at where they could be impacted and plan now for what could be an immediate and sudden decline, so they have a plan for how to react.”

In a Willis Towers Watson survey last week of nearly 160 major corporations with 1.5 million people on the payroll, more than one in four indicated their human resources departments have been updating their pay policies in the event any worksites are closed or employees are otherwise furloughed.

If not an ideal outcome for workers who depend on a steady paycheck, furloughs are welcome in some instances such as sabbaticals and parental leave. In Connecticut and elsewhere, many working parents are already working up contingency plans for child care, and so possibly would welcome a furlough as an alternative, particularly if it included a stipend representing a portion of their accustomed pay.

Prior to the Great Recession of 2009, the state Department of Labor created a Shared Work Program through which the state would pick up some of the compensation for employees of participating businesses who choose to deal with a downturn in revenue by cutting hours, rather than cutting jobs. More than 300 companies participated in the program during the recession.

The state Department of Labor maintains a list of answers to frequently-asked questions about what is allowed with regard to furloughs and reduced pay, online at dol.gov/agencies/whd/fact-sheets.

According to attorneys with Littler, an international employment law firm with a New Haven office, uncompensated time off the job is just that — time off. In guidance issued its clients last week, Littler advised its corporate clients that they should pay salaried employees in full in any week they perform work associated with their job while out on furlough, even tasks as simple as checking their work email accounts.

In its own advisory, the Hartford Financial Services Group suggests that any business owners contemplating furloughs offer them on a voluntary basis first, with the goal of getting any willing participants on board. If labor expenses are still outstripping the need for those workers, forced furloughs should be a last-ditch option, according to The Hartford.

“Good communications are essential to successful furloughs,” The Hartford states. “Be sure your employees know what they can expect. If you’re asking employees to give up hours (and pay), they’re likely to feel better about doing so if they fully understand the reasons behind it.”

Hearst Connecticut Media file photo A sign at ARI of Connecticut’s Stamford office in 2017 after the nonprofit was impacted by a furlough instituted by the state of Connecticut. Roughly one in four corporations surveyed by Willis Towers Watson are contemplating temporary furloughs to trim labor costs as the novel coronavirus Covid-19 affects communities nationally.