Cynopsis: Dealing With A Forced Furlough

Article for Cynopsis email newsletter DEALING WITH A FORCED FURLOUGH

By Mark Levine Any company facing a temporary down turn in revenues or a short-term cash flow crisis can potentially weather the storm by furloughing employees without pay.

As a rule, furloughs are no shorter than one week and no longer than a month. Any shorter and the savings aren't worth the ill will generated. Any longer and the company can't count on the individuals all returning. Furloughs are most often done sequentially rather than en mass so impact on the business is minimized.

Because these are often emergency measures you can't assume you’ll get anything more than one week's warning.

There's little point in arguing or complaining about being furloughed—it won't change the facts and will only put a future target on your back. And don't expect honest answers about the implications for the future of the company; you’ll get only the best-case scenario. Instead, you should focus on minimizing the potential harm to your personal finances.

You have two options for responding. First, you can try to make the loss of pay easier to absorb by trying to spread out the damage. If you're asked to take a two-week furlough, for instance, you can offer to work half time at half pay for four weeks. The total savings for the company will be the same, but you'll have an easier time dealing with the shortfall, and the impact on the work flow will be less dramatic. Another alternative is to offer to give up your paid vacation, and to instead, work for those two weeks. While not offering short term relief for the company it will provide savings. And while it isn't pleasant to go without a paid vacation, it might be preferable to going with a paycheck.