California starts Furlough Fridays to save money
February 11, 2009 by Fred HosierPosted in: In this week's e-newsletter, it's the economy - stupid, Latest News & Views
More employers are choosing to cut employees’ hours — and pay — instead of letting workers go in layoffs.
California government has asked more than 200,000 state workers to stay home two Fridays a month in an effort to save $1.3 billion in the next 18 months.
Among the government agencies forced to close on some Fridays: the Department of Motor Vehicles and the Department of Consumer Affairs.
Others, such as fire stations and employment centers will stay open.
The furloughs will reduce the average state worker’s salary by 9.2%. The state has a $42 billion budget shortfall.
And perhaps the furloughed workers can help pump up California’s economy by taking advantage of some special deals. Squaw Valley ski resort was offering $49 off of lift tickets on furlough days to state employees who show a valid government ID card or a recent pay stub. State employees can ski or snowboard every Friday for the rest of the season for $20 at Boreal ski resort.
February 13th, 2009 at 10:46 am
This bothers me in that if they can effectively reduce their workdays by 10%, why can’t they reduce the spending by either cutting jobs entirely, or reduce the superfluous government programs as well.
February 13th, 2009 at 11:02 am
I do agree that many area’s of government are “fat” and need trimming and this is a perfect example in CA. Maybe this will help them see the light? NY is the same way with way too many goverment employees with way too many expensive benefits.
My company is doing some similar – we are in manufacturing. The State of NY has a program called Shared Work and it allows employees to claim unemployment for the one to three days a week that you are closed. You spread out the layoff among all employees who get to remain employeed and keep all their benefits. It is great because we are hoping that business picks up in the next six months and we won’t have to rehire to fill all the open positions that we would potentially be laying off. We have not lost one employee since starting this program and they all think it’s a great idea.
February 13th, 2009 at 11:51 am
Eliminating the position creates another problem: an increase in the number of people getting unemployment benefits. A 10% reduction is better for both the employee (still has a job) and the state (don’t have to pay unemployment benefits.) I’d LOVE to have Fridays off, even if it meant a cut in pay!
February 13th, 2009 at 12:56 pm
We are a small manufacturing facility in Illinois (under 18 employees), and we recently
went to a 4 day work week. We have to be pro-active and decrease our payroll expenses
and we figure that everyone taking a hit (owner took a 50% paycut and works on the 5th day!!!— 12 of the employees now make more in a 4 day work week than owner does for his 5 days
pay – Far cry from Wall Street and Banking management staff!. But, this is what it will take
for the “small to medium business to stay in busineess, because Bail-outs aren’t a possibility
for us. Our people applauded the 4 day work week because they understand the reason!
February 13th, 2009 at 2:14 pm
Our company has recently cut us to 4 days a week. Although I miss the $ I love having this extra day off. The only disagreeable part is it didn’t extend to the top. No great example set there. However, I’m just thankful I still have a job…having the extra day off has been a real perk to me. I’m kind of dreading having to return to 5 days.
February 16th, 2009 at 4:10 pm
Kate, we are a manufacturing company too, located in PA with employees in NY. Can you contact me about Shared Work. I would like to get a better idea of how this program works. You can reach me at abroady@innovative-ss.com with your contact info? Hope you get this message.
February 17th, 2009 at 11:04 am
Kate,
I’m in Arizona, and my company is doing the same “shared work” unemployment plan, for the employees who took a cut in pay and work hours. It is fantastic, and has helped us retain our skilled work force for when the economy picks up again.
Anita, it is an employer sponsored program, and the employees don’t have to do a thing to receive the benefits, it is all administered through the HR department (At least here it is) It is completely well worth the few minutes twice a month it takes to reports workers hours.
Good luck!
February 17th, 2009 at 1:15 pm
Kate and Sue, thank you both for your help on this. I’ve already started the ball rolling and you’re right it is easy, so if anyone else is thinking of doing this I say go for it! This is another opportunity to show Sr./Exec. Mgmt. that HR is forward thinking and strategic. Thank you again.
February 23rd, 2009 at 2:28 pm
Thank you for your comments on the “shared work ” program, however, here in my company we are all exempt/salaried employee’s. I find most of these programs are for hourly employee’s becasue exempt/salaries are paid a set salary no matter what hours they work 40-48, same pay.
Does anyone know how we an implement this program with our exempt status and cut our payroll? I too would love to get the Friday off.
February 24th, 2009 at 12:02 pm
Hi Yolanda,
If your pay was cut as well as your hours, it shouldn’t matter if you are hourly or salaried/exempt. If there was both a reduction in hours as well as a reduction in pay, you should look into the program. My company cut our pay by 20%, and then in turn cut the hours by 20%, thus the Friday’s off. It was not too bad at the beginning, but that cut is pretty deep, and it is really beginning to affect the employees. Many of them have tried to pick up extra work on Fridays and the weekend. It is still much better than being laid off completely!!!