Guide to Understanding Furloughs, Hours, & Pay Cut | Mann & Elias
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Guide to Understanding Furloughs, Hours, and Pay Cuts

Employment Attorneys Can Help You Understand Which Legal Rules Apply

Small and large businesses alike have gone through an economic toll because of the Covid-19 pandemic. More than 200,000 U.S. establishments closed their doors for good, according to The Wall Street Journal. In previous years around 600,000 businesses have shut down annually. Although many closures have likely gone unreported, the fact remains that companies are trying to stay afloat in such an ever-changing economy.

Unfortunately, many have to make tough decisions to furlough employees. Because co-workers are facing the same experience, it is not uncommon to see discrepancies in pay. If an employer fails to correct the mistake, contact a wage and hour attorney in Los Angeles to recover damages owed.

Breakdown of Temporary Layoff in California

Getting laid off or furloughed is not easy. At that moment, you may be thinking of your family, changes in your personal life, and future employment. Plenty of workers accept temporary leave as opposed to losing their jobs entirely or losing co-workers to layoffs. To understand how legal rules apply to cost-cutting measures, we define several terms that may be useful to you:

Furloughs – are a mandatory temporary leave of absence. Employees consent to return to work with reduced hours.

Hour Cuts – are when an employer has reduced your hours or limited your time in the workplace. It is because of a change or hardship.

Exempt (Salaried) Employees – Most salaried employees are exempt from hour reductions. They essentially work until the job gets completed regardless of the hours, which vary in range. It depends on the nature of the business.

The company must be going under extreme hardship before cutting an employee’s hours. They cannot do so to save money only.

Nonexempt Employees ­– Unlike exempt employees, nonexempt workers do not have a set salary regardless of the hours contributed. Businesses can cut their hours as needed to save on costs. It is not uncommon to see half the staff working full time for full pay and the other getting laid off.

(Pro-tip: If you work 40+ hours (overtime) as a nonexempt employee, you must get paid for time and a half.)

In both circumstances, HR or the employer must relay changes in hours or pay to you before it goes into effect. If not, a Los Angeles lawyer for unpaid wages would inform you to document the discrepancies should you need them later. We go in-depth on each later on in the article.

Pay Cuts – This is a decrease in pay or salary. The decision gets made to reduce layoffs and save the company money during a difficult period. It can be temporary or permanent.

Layoff – Layoffs should not be confused with furloughs. The definition is a complete separation from the company. It is a permanent decision unless specified differently.

Federal Law Provides Expanded Unemployment Benefits

The Coronavirus Aid, Relief, and Economic Security (CARES) Act expanded unemployment benefits for those who lost their jobs because of the pandemic. As of March 27, 2020, it got extended to furloughed workers. The law added 13 weeks onto the intended end date with an additional $600 per week. Unemployment perks might not be as generous as we near a post-pandemic reality in the U.S.

Biden’s American Rescue Plan is funding $1.9 trillion into COVID-relief. In California, unemployed workers can still receive supplemental payments of $300 (reduced from $600) until September 6, 2021.

(Pro-tip: As you wait to see what happens next, keep in mind that wage and hour violations can take on various forms. If you suspect changes in pay came from inaccurate calculations, improper record-keeping, or rushed termination, contact a labor attorney for employees in LA.)

Pay Cuts and Reduction in Hours

Over the year, millions of hard-working Americans have lost their jobs or are struggling to hold on to them. Sadly, fears surging through the economy still parallel the Great Recession of 2007 to 2010.

As a furloughed employee, understanding your employee rights is crucial. It will prevent you from getting taken advantage of by an employer. When you agree to take a short leave of absence, you are under the presumption that you will return in less than six months. Employers that do not comply or suddenly change the terms of the contractual agreement are subject to lawsuits. Similarly, if the company did not give advance notice of mass layoffs or pay cuts per the Worker Adjustment and Retraining Notification Act (WARN), your lawyer for hour disputes in LA will make sure to hold them accountable.

Nonexempt vs. Exempt (Salaried)

Although you are still considered an employee of the company, you should not be working during leave. If so, you are increasing the risk of losing out on full pay.

As mentioned previously, employers have a legal right to cut nonexempt employee hours. Although reducing is legal, failing not to pay for overtime is not. Employees should be able to do their job without stressing about working from home on what should be considered a “furlough day.” If you experienced this, notify the company to make sure your work gets reflected in the next paycheck.

Salaried employees are often not presented with the same issues (exact) as nonexempt workers. If, however, your employer notifies you of pay and hours cuts, you should discuss what that means for your role. An employment attorney in Los Angeles would recommend the employer classify you as a nonexempt employee. You would get paid overtime and avoid getting into disputes. It can get implemented one of two ways:

  • The employer can cut your pay to less than $684 per week.
  • The employer can reduce your hours on a day-to-day or week-to-week basis.

Such actions should reflect the long-term needs of the company, according to the Department of Labor. It can continue as long as it is necessary during the economic downturn.

Don’t Settle for Unpaid Wages – Especially If You Got Furloughed

The last thing we want is for you to go through this alone. Furloughed employees have a right to benefits, time off work, and more.

The Law Offices of Mann & Elias is an employment law firm that provides guidance and legal support for individuals facing issues in the workplace. We represent clients at every level of the state and federal court systems in lawsuits regarding discrimination, wrongful termination, unpaid wages, and more. When your case is in our hands, we hope to minimize stress and concerns associated with work.

Workplace disputes and negotiations can be complicated and uncomfortable between an employee and employer. In many cases, an employer can retaliate, causing individuals to feel disadvantaged in the company. When you retain one of our lawyers, you will be well-protected and advised. While there are thousands of lawyers to choose from, we believe our success rooted in:

  • 50+ years of trial experience
  • Excellent advocacy skills
  • Intense preparation and research
  • Quality care

Since our partnership began over 20 years ago, we have settled hundreds of claims, completed 100 jury and bench trials, and recovered more than $18 million in settlements. In the end, our goal is to understand what you need and achieve the best outcome for you by focusing on those needs. For dedicated representation with no upfront fees, give us a call at 323-866-9564 or email info@mannelias.com.

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