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Furlough Planning Guide

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Furlough Planning Guide Office of Human Resources Furlough Planning Guide PLANNING/STRATEGY • The furlough process is covered under the Communicable Disease Mandatory Employees (CDME) policy and is not the same thing as a reduction-in-force (RIF). • Consider all cost saving mechanisms before considering a furlough. For example, reducing travel, professional development, other discretionary spending and reducing temporary employment in an effort to avoid furloughing permanent employees. If any temporary employees will be retained, you must provide a brief justification for the retention of any temporary employees serving in classifications affected by the furlough within the school/division or work unit. • Furlough requests submitted to the UNC System Office for review and approval on or after November 30, 2020 will require a minimum 60-day advance notification to employees prior to the commencement of the furlough if: • the request is for a full furlough of at least 30 consecutive calendar days, and/or • the request is for a partial furlough of at least 30 consecutive calendar days that reduces an employee’s FTE below 0.5. • Think holistically and equitably as you consider the financial implications for all employment types. • It is best to execute a furlough in a consistent manner for each member of an employment type. Doing so will minimize the administrative burden for TIM administrators and result in less confusion for employees. • Assess the impact of COVID-19 on the operational needs and financial outlook of the entire school/division. Furlough plans can consist of a combination of work units or the entire school/division. If multiple work units within a school/division are being considered, please submit one furlough plan worksheet that includes all affected work units. • A “full furlough” means that an employee will not receive pay for at least a full month. A “partial furlough” means that an employee will not receive pay for only part of a month, or will be placed on a temporarily reduced schedule rather than being placed on a full furlough. • A Special Temporary Salary Reduction for EHRA-NF employees instead of furlough can be used to address current or anticipated loss of funding, revenue, or fees due to the impacts of the COVID-19 event. No salary reduction shall be implemented that results in a new annualized salary of $45,000 or less and no salary reduction under these provisions shall exceed 20 percent of the employee’s current base pay. A temporary salary reduction may be accomplished for a duration no shorter than one month and no longer than 12 months. • When considering a partial furlough, consider EHRA employees are compensated for every calendar day and SHRA employees are compensated for work weeks (i.e. Mon – Fri), which determines how the system prorates their pay. Our work week spans from Monday through Sunday. • You can recall employees from furlough sooner than originally planned. Eligible for Partial Eligible for Full Eligible for Special Furlough Furlough Temporary Salary Reduction SHRA Yes Yes No EHRA-NF Yes Yes Yes Faculty Yes Yes No PROCESS OVERVIEW 1. Request a consultation and Furlough Salary Reduction worksheet from assigned Talent Acquisition Partner. When considering a salary reduction for EHRA Non-faculty employees, request a consultation with your assigned EHRA Non-Faculty HR Consultant. 2. Submit completed Furlough Salary Reduction worksheet to assigned Talent Acquisition Partner. 3. Talent Acquisition Partner will facilitate internal review and seek required external review/approval from UNC System Office, Office of State Human Resources and the Office of State Budget Management. 4. If approved or additional feedback needed, Talent Acquisition Partner will notify department and provide employee notification template. 5. Please inform your Talent Acquisition Partner a day in advance of notifying employees. OHR must communicate the notification date to Systems Office 24 hours prior to employees being notified. 6. Departments are expected to review their Payroll Prelim report for accuracy on each payroll. When furloughs are in place, the need for review is heightened even more. EMPLOYEE BENEFITS IMPACT • Salary reductions and furloughs will have an impact on an employee’s retirement. In either scenario, there will be a reduction in the amount that the employee contributes into the mandatory component of their retirement. • Employees who are furloughed (full, partial or salary reduction) may elect to change their benefits as a furlough qualifies as a life event (QLE). This must occur within 30 days of the event. If a furloughed employee chooses to cancel benefits with this life event, once the furlough ends, they will have 30 days to enroll for coverage. If they do not enroll within this time frame, they will not be allowed to enroll for coverage until the next Open Enrollment period. It is worth noting that they may have certain Evidence of Insurability (EOI) requirements if coverage is not continued during the furlough period. • If an employee separates while a salary reduction is in effect, the employee’s leave payout will be calculated based on their salary prior to reduction in pay. The department will need to ask HRIM to update the employee’s record to ensure the leave payout is accurate. • Employee benefit coverage continues and health care contributions will continue to be deducted from paychecks as normal, to the extent possible. If reduced pay is not enough to cover the full premium, the amount available will be taken from the employee’s pay and any retro premiums owed will be taken when the employee returns to full-time employment. A furlough is considered a QLE and the employee would have 30 days to cancel one or more of the benefits while furloughed: however, there could be EOI implications for some of the canceled plans. • If an employee is on a partial furlough and receiving at least 50% of their pay, NC Flex Health Program coverage continues and contributions will continue to be deducted from their paycheck as normal, to the extent possible. If an employee’s reduced pay is not enough to cover the full premium, the amount available will be taken from their pay and the remaining balance can be paid via the leave desk. A partial furlough is considered a QLE and the employee would have 30 days to cancel one or more of the benefits: however, there could be EOI implications for some of the canceled plans. • Partial Furlough: In order to minimize the amount of benefits going into arrears and being taken from future checks, it is recommended that employees remain in paid status for at least ½ of the pay period. • Longevity will not be paid for fully furloughed employees until they return. Partially furloughed employees will receive longevity payments based on their original salary. • UNC-Chapel Hill does not determine unemployment eligibility. • Unemployment insurance benefits are available to workers who are unemployed and who meet the State’s eligibility requirements, as determined by the Division of Employment Security (DES). • Employees may file a claim in the first week that employment stops, or work hours are reduced. • Employees may file claims: • online at des.nc.gov/apply-unemployment or • by telephone at (888) 737-0259 or (866) 847-7209 Pandemic Unemployment Assistance (PUA) Line. PARKING DEDUCTIONS • The procedures for managing reduction in cost for parking permits during a furlough are as follows: Short-term/Intermittent Furlough: 4 weeks or less • Department provides list of employees/PIDs to Transportation and Parking (T&P) and length of furlough. • T&P reduces cost of permits by the number of weeks the furlough is scheduled. • T&P cancels existing permits and resales at the reduced amount. • Cost reduction related to the furlough is spread out over the rest of the payroll deductions. • Parking payroll deductions at the new, reduced rate will occur for the remaining pay periods in the parking year even during pay periods in which furlough time is taken. Long-Term/Continuous Furlough: Over 4 weeks • Department cancels permit and reissues when employee returns. • Permit pricing can be reduced for Special Temporary Salary Reductions if the department notifies T&P. The existing permit would be cancelled and reissued based on the new salary scale designation in the parking system. For more information visit hr.unc.edu.
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