Legal Implications of Furloughs

Wednesday, March 20, 2013

According to OPM guidance, there are two types of furloughs: an administrative furlough and a shutdown furlough. An administrative furlough is a planned event by an agency which is designed to absorb reductions necessitated by downsizing, reduced funding, lack of work or any budget situation other than a lapse in appropriations. Furloughs that would potentially result from sequestration are considered administrative furloughs.

A shutdown furlough (also called an emergency furlough) occurs when there is a lapse in appropriations and can occur at the beginning of a fiscal year if no funds have been appropriated for that year, or upon expiration of a continuing resolution if a new continuing resolution or appropriations law is not passed. In a shutdown furlough, an affected agency would have to shut down any activities funded by annual appropriations that are not excepted by law.

During an administrative furlough, an employee may not substitute paid leave or other forms of paid time off for any hours or days designated as furlough time off. Agencies have discretion in determining whether to furlough employees who are on leave without pay (LWOP) status, since both furloughs and LWOP are periods of nonpay status. Employees may already be scheduled for LWOP for a variety of reasons and for various lengths of time on either a continuous or discontinuous basis. An employee’s LWOP may or may not fully encompass the period during which administrative furloughs are being conducted for other employees in the same organization.

For example, an employee who is approved for LWOP under the Family and Medical Leave Act (FMLA) on days that coincide with the period of furlough will continue to be charged LWOP. However, an employee who was scheduled during the furlough to take paid leave under the FMLA (i.e., an employee chooses to substitute annual leave or sick leave, as appropriate, for unpaid leave under the FMLA) must be placed on furlough instead. Since the paid leave was canceled, the period of absence may not be used to reduce the 12-week entitlement to FMLA leave. Therefore, furlough hours will not count toward the employee’s 12-week FMLA leave entitlement. An employee may not later substitute paid leave for furlough hours.

Agencies have the discretion to determine whether to furlough employees who are scheduled to be in an LWOP status throughout the pending furlough period. If an employee is on one year of LWOP to accompany a military spouse overseas, a furlough notice may not be necessary. An employee on LWOP who is performing military duty or who is receiving worker’s compensation benefits may not require a furlough notice. Similarly, an employee on continuous FMLA for a serious health condition or who is caring for a family member with a serious health condition could also fall in this category.

In Gross III v. Dept. of Justice, 77 MSPR 83 (Oct. 29, 1997), an employee was suspended for 20 days on a charge of failing to comply with the agency’s policy to request leave. On appeal to the MSPB, the employee argued that the agency had violated FMLA by denying him leave to care for his seriously ill mother, who had congestive heart failure. The AJ upheld the suspension finding that the agency had properly charged the employee AWOL because at the time of his leave request the agency was under a furlough and the employee was therefore not entitled to leave under FMLA. The Board reversed and found that the employee’s family medical situation was covered by FMLA and he was entitled to be placed on LWOP under FMLA. The Board found that notwithstanding the furlough and the resulting cancellation of all leave, the agency retained some discretion in granting leave to employees who were deemed “essential” for purposes of the furlough. The Board held that by failing to grant the employee LWOP to care for his mother and placing him in AWOL status, the agency had interfered with his FMLA rights.