Understanding Furlough in India: What It Means for Employees and Its Legal Aspects

Understanding Furlough: Concept and Legality

What is the actual concept of furlough, and when and why is it used? Is furlough legal in India? How will an employee be treated in company records once he or she is put on furlough? How can a furlough be ended?

I would really appreciate it if someone could shed some light on this topic.

Thanks.

Furlough is a half-pay leave given to officers in the Defence Forces in India. An officer is entitled to 20 days of half-pay leave as furlough every year. You can refer to the Defence Services Regulations (India) Leave Rules for details about furlough.

Regards

Thank you for the prompt reply; I really appreciate it. Just one question: do we use this concept in the private sectors like Pharma, IT, BFSI, Telecom, etc., and follow the same policy of half pay? If yes, could you provide me with more data on the same or some online link which I can refer to?

Thanks,
Komal

Well, about this concept, I would like to say that a furlough is when an employer places an employee into temporary non-duty, non-pay status because of budget issues, lack of work, or other non-disciplinary reasons. Furloughs may be voluntary or mandatory and are different from normal layoffs because employees continue to work on a reasonably regular basis. An employer will institute a furlough by scheduling employees to have certain days off without pay. For example, an employer may ask or require an employee to take off every other Monday without pay.

Basically, this concept has come from the US.

Details on Furlough Implementation

Here are a few details I would like to share about this concept, which I have used for my research:

Non-Exempt Employees

Furloughs are easiest to implement with non-exempt employees because, under federal and most state wage and hour laws, non-exempt employees must only be paid for the actual hours they work. Therefore, employers may use furloughs for non-exempt employees by sending them home, and employers don't have to pay employees for regularly scheduled hours that are not actually worked.

Exempt Employees

It is more difficult to implement furloughs for employees that are exempt from wage and hour regulations and other state laws. Exempt employees are entitled to full weekly salaries for any week they perform work. If an employer does not fully pay an exempt employee for a full workweek, the employee's exemption status may be jeopardized.

An exempt employee may be furloughed without losing her exempt status if the exempt employee is furloughed for an entire workweek. The employee must perform absolutely no work at all during that week, including even the most minimal tasks (such as checking email or voicemail). If the exempt employee performs any work during that week, the employee will then be entitled to her full weekly salary. The exempt employee's weekly salary also cannot fall below $455, the current minimum weekly salary requirement for an employee to be considered exempt.

Other Issues

There are other employment law issues to consider when employers implement furloughs. If an employee's hours are reduced because of a furlough, the employee's status might change from full-time to part-time, and that status change could affect the employee's benefits eligibility. There also may be notice or bargaining requirements if a negotiated collective bargaining agreement is in place.

To know more about this, you can dig into the web; there are several resources available. Also, I have mentioned below some articles which will help you to understand all about this:

- The Law of Alternative Work Arrangements: Furloughs, Reduced Work-Weeks & Flexible Work Arrangements » The Glass Hammer

- Employers Hit Salaried Staff With Furloughs - WSJ.com

Hope this will help you...

In India, in the Defense sector, leave furlough is being given only to officers because they need more rest due to mental stress and to avoid any unwanted health problems caused by work tension and highly extended working hours. However, whether it is required for private sectors is a question that requires more deliberation before its implementation.