Experts say current reporting methods makes it difficult to document just how many employees are losing wages because of forced furloughs-- aka as unpaid time off. What the experts know is that more companies/hospitals/city/county/state governments/ are turning to furloughs to help cut costs and safe job.
The "f" word is popping up everywhere.Described as "employee purgatory,"because employees lose pay but can't claim unemployment benefits,furloughs cause a great deal of financial stress.
This was the message California state employees received December 22, 2008.
Furloughs: Beginning February 1, 2009, and lasting through June 30, 2010, rank-and-file employees will be furloughed two days per month. For employees who are not part of a bargaining unit (i.e., exempt appointees, career executive assignment employees, supervisors and managers), we will implement an equivalent furlough or salary reduction plan effective February 1, 2009. We intend to implement these measures in a way that does not affect your retirement.
According to Matt Richtel of The New York Times the strategy of using furloughs instead of layoffs has a lot to do with the speed and depth of how this financial crisis unfolded.
Companies taking nips and tucks to their work force say this economy plunged so quickly in October that they do not want to prune too much should it just as suddenly roar back. They also say they have been so careful about hiring and spending in recent years — particularly in the last 12 months when nearly everyone sensed the country was in a recession — that highly productive workers, not slackers, remain on the payroll.
At some companies, employees are supporting the indirect wage cuts — at least for now. The downturn hit so hard, with its toll felt so widely through hits on pensions and 401(k) retirement plans and with the future so murky, that employers and even some employees say it is better to accept minor cuts than risk more draconian steps.
How long will employees share this goodwill?
The magnanimous feeling will probably pass, said Truman Bewley, an economics professor at Yale University who has studied what happens to wages during a recession. If the sacrifices look as though they are going to continue for many months, he said, some workers will grow frustrated, want their full compensation back and may well prefer a layoff that creates a new permanence.
“These are feel-good, temporary measures,” he said.
New York Times
As a result of the furloughs, more people are looking for second jobs to help offset the loss of income from the forced furloughs. A Great Strategy --now if you can just find one of those second jobs.