Sullivan & Ward's Liz Overton was quoted in the Des Moines Business Record concerning legal issues related to company furloughs. Company furloughs create a legal minefield Very good information and article related to company furloughs.
In the wake of tough economic times, many companies are exploring alternative cost cutting methods. One method is requiring employee furloughs. Employers are using required furloughs rather than terminations as a cost-cutting measure. If you are thinking about using a furlough at your company remember the following rules regarding non-exempt and exempt employees:
· Non-exempt employees must be paid only for actual hours worked. An employer may send non-exempt employees home as a cost-cutting measure without worrying much about the legal problems. You will need to review any contracts, including collective bargaining agreements, your company may have with non-exempt employees before implementing a furlough to ensure that you are not violating any of the provisions contained within the agreement.
· Exempt employees must receive full salary for any week in which work is performed, without regard to the number of days or hours worked. If any exempt employee does not receive full salary for every workweek in which the employee performs any work, exempt status is lost and the employee is entitled to overtime pay. In general, furloughs for exempt employees should be scheduled in full workweek increments to protect an employee’s exempt status.
These should be considered general rules. If you have specific questions about implementing a furlough plan please contact your attorney.
The ADA requires employers to make “reasonable accommodations” for qualified individuals with a disability. (“Disability” is a broadly defined term which can encompass a number of impairments. Determining whether some is disabled for the purposes of the ADA can be difficult. If you have questions whether an employee may be covered by the ADA you should contact your attorney). A reasonable accommodation can include the following:
· Making existing facilities used by employees readily accessible to and usable by persons with disabilities;
· Job restructuring, modifying work schedules, reassignment to a vacant position;
· Acquiring or modifying equipment or devices, adjusting or modifying examinations, training materials, or policies, and providing qualified readers or interpreters.
But what else can you do? How do you know what equipment or devices exists? Where do you find the materials you need? The Job Accommodation Network (JAN) was created to help assist employers, employees and other interested people in answering these questions. The JAN staff can help businesses by suggesting reasonable accommodations and assisting with the implementation of reasonable accommodations. Private businesses may access JAN services by telephone, email and on-line tools. It provides helpful and practical information and guidance for employing and retaining individuals with disabilities.
The Iowa Supreme Court’s opinion in Sims v. NCI Holding Corp., is a great example of the importance of complying with employee related statutes. Sims sued his employer for violating Iowa Code § 730.5 (drug-testing) after being terminated for testing positive for an illegal drug. Apparently, prior to the filing of the lawsuit NCI gave oral notice of Sims' right to a second test rather than written notice as required by the statute. It was ultimately determined that the employer did not wrongfully discharge Sims and was not required to pay Sims back pay or punitive damages or reinstate him. Because the employer failed to follow the requirements of the statute, however, it was ordered to pay Sims’ attorney fees and costs. The employer’s failure to follow a clear directive from the Iowa legislature likely cost it tens of thousands of dollars in attorney fees. It may have only cost the employer a few hundred dollars to contact its attorney and ensure that it was complying with the statute.
Photo on Flickr by singsing_sky
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