Guide to Returning Employees from Furlough

June 15, 20201:58 pm386 views
Guide to Returning Employees from Furlough
Guide to Returning Employees from Furlough

Since the start of COVID-19 crisis, many companies have been choosing from a menu of options to control labour costs, including layoff, furlough, or temporary work hours or wages, based on the business’ current or future needs. Layoffs are a means of permanently eliminating positions, while furloughs could be a better option if employers lack resources to pay its employees but still want them to join the workforce after the crisis ends. 

Furlough planning is created to help both businesses and employees survive during the coronavirus crisis. In Singapore, the government has provided flexibility in ComCare’s eligibility criteria and additional schemes, including a Temporary Relief Fund and COVID-19 Support Grant. In Hong Kong, the government has announced a new HKD 80 million subsidy package to prevent mass unemployment, with eligible employers will receive funding to pay 50 percent of their employees’ wage, capped at HK 9,000 per month for a period of six months. 

See also: Employees Concern about Return-to-Work Measurement

However, the COVID-19 job retention scheme, furlough scheme, is unprecedented and is unlikely to be created for in typical employment contracts. The scheme is commonly created only under (temporary) employment act and is not being cited in the industry contract. Stuart Gentle concerned that the eventual return to work activities are unlikely to be fully covered by existing clauses. Therefore, there might be friction when it comes to the end of furloughing, such as redundancy and non-compliance with employment law. Yet,  with many businesses calling their employees to return to work now, HR should reconsider their employment contract once again, in order to avoid misconduct of returning employees from furlough. Employers and HR should also be mindful in selecting the criteria of furloughed employees, who will return to work first then others to avoid discriminations claims. 

The following are considerations for HR and business leaders to return employees who were in furlough. 

  • Make sure employers comply with federal and state law regarding partial workweek payments for salaried, exempt employees if beginning mid-week.
  • If employee benefits were suspended during a furlough, employers must arrange for a resumption of benefits. 
  • Address issues relating to the accrual of leave during furlough by ensuring consistency with policies applicable to another unpaid or paid leaves of absence, as applicable. 
  • If all employees furloughed from a competitive level cannot be recalled at the same time, employers must recall according to their retention points beginning with the highest-standing employees. 
  • If the situation changes and the department determines that a furloughed employee cannot be recalled within the one year period, the employee must be separated unless the employee accepts an offer on assignments to another position. 
  • If furloughed employees refuse or do not respond to a notice to return to duty, the department might separate the employees by layoff effective on the specified date of recall. 
  • Employers can notice the recall by mail, return receipt requested, to the current home address furnished by the employees. 
  • Returning employees will be paid the same salary as before they were furloughed. 
  • Any unused sick leave or annual leave accrued prior to the furlough should be reinstated.
  • All employment benefits should be restored at the same rate as before the furlough. 

Read also: HR Tips: What TO DO If Employees Refuse to Return to Work