Employers forcing workers to take time off without pay
Here’s the vacation no one wants, courtesy of the recession: forced time off without pay.
Financially struggling universities, factories and even hospitals are requiring employees to take unpaid “furloughs” -- temporary layoffs that amount to one-time pay cuts for workers and a cost savings for employers. This year, the number of temporarily laid off workers hit a 17-year high.
“If they do it once, I think it’s easier for them to try to do it again,” said Carrie Swartout, who researches traumatic brain injuries at the University of Maryland Medical Center, which is private and nonprofit.
Maryland is requiring unpaid time off for 67,000 of its 80,000 employees as it struggles with a budget crisis. The state says the furloughs will save an estimated $34 million this fiscal year.
State governments, facing lower revenues but stymied by the long process required to cut public sector jobs, are using furloughs as a quick way to trim payrolls. Private-sector businesses -- from automakers to small businesses -- are shutting down factories and offices.
The temporary layoffs are “kind of employment purgatory, but it’s better than the alternative,” said Carl Van Horn, a professor of public policy at Rutgers University. They’re a typical response to decreasing demand in a recession, although this round is worse than past recessions, Van Horn said.
Of 10.3 million unemployed workers in November, roughly 12% were unemployed because of temporary layoffs, according to data from the Bureau of Labor Statistics. The last time this many workers fell into the category was February 1991, when 1.4 million workers were unemployed because of temporary layoffs. As a proportion of the total workforce, workers on temporary layoff are roughly 1%, nearly the same now as 17 years ago.
The numbers, based on a Census Bureau survey of households, likely understate temporary layoffs. The survey asks about participants’ working hours during the prior week, so a worker who knows he faces a temporary layoff later in the month would not be included.
Swartout, the 28-year-old Maryland researcher, could lose as much as $800 in pay, or nearly 2% of her salary, depending on how long she’s furloughed. “That’s a huge chunk,” she said.
Although employees paid directly by the hospital will not be furloughed, some researchers connected to the hospital, such as Swartout, hold state-funded positions and will be forced to take unpaid vacation.
The timing and duration of the furloughs are still unclear, she said, but the loss will mean she’ll struggle to make her monthly $500 student loan payment.
At state-funded Winthrop University in South Carolina, workers are being asked to stagger days of unpaid leave as the state’s sales tax revenue declines. Professors were told to take nine furlough days without canceling classes or office hours, missing meetings or interfering with any other university responsibility. They are required to take the days before June 30, when the university’s fiscal year ends.
Education professor Nakia Pope, 32, calculates that there are 11 days before and after the semester and over spring break when he could take unpaid time, but he and his colleagues would normally work most of those days, preparing materials, grading and writing or doing research.
“Most faculty I know will end up taking few if any of those furlough days off -- they’ll just go about doing the good jobs they normally do for less money,” he said.
“I’m grateful to be working at all, considering I live in the state with the third-highest unemployment in the nation, and I think Winthrop is doing the best it can managing the situation it’s been given by the state -- but it’s a mess,” said Pope, who said the days off will amount to a 6% pay cut. “That’s a pretty big hit.”
Like other workers facing forced time off, Pope said his family would have to cut its spending.
For factory workers, unpaid time is coming in the form of extended shutdowns as manufacturers try to reduce inventory of everything from aluminum to newsprint to fertilizer.
This month, recreational vehicle maker Winnebago Industries Inc. said that all its workers, including Chief Executive Bob Olson, would take an unpaid week off during the current quarter, along with a two-week production shutdown during the holidays. 3M Co. said last month that it had ordered some workers to take vacation or unpaid time for the last two weeks of the year. Computer maker Dell Inc. in November asked employees to consider taking unpaid vacation days during the fourth quarter.
Chrysler, General Motors Corp. and Ford Motor Co. have all extended their annual holiday shutdowns, typically the last two weeks of the year. The moves will idle tens of thousands of workers both at the major automakers and their suppliers. Tire maker Michelin and parts makers BorgWarner Inc. and Gentex Corp. have also announced shutdowns of varying lengths beginning in December and ending in January.