Facing steep drops in business and mandatory shutdowns, many U.S. businesses furloughed workers rather than fire them in the early months of the COVID-19 pandemic. At the time, furloughs offered a way for companies to manage costs through what appeared to be a short-term crisis.
As the pandemic continues and efforts to reopen the economy accelerate, companies find themselves in limbo. Their employees aren’t new, but neither are they in a daily habit of coming to work. Work itself may have changed as well due to new social distancing, PPE, or sanitation demands.
Onboarding furloughed workers isn’t identical to onboarding new hires. The processes parallel one another, but bringing back furloughed workers presents unique challenges.
2020’s unprecedented furlough trends
Business shutdowns, shelter in place orders, and quarantine demands imposed by the COVID-19 outbreak left many workers unable to go to their place of work in early 2020. Millions of workers filed for unemployment as they lost their jobs or faced furloughs.
Yet optimism remained high in the early months of the pandemic. A Washington Post-Ipsos poll in May 2020, for example, found that 77 percent of furloughed workers believed they’d be going back to work shortly.
As the pandemic continues, however, U.S. small businesses are struggling to bring back their furloughed workers. Only 33.5 percent of workers furloughed in July 2020 had returned to work by August 2020, compared to 41 percent furloughed in June who returned in July. Of those who did return to work in August, 27 percent did so with lower wages, write data scientists Daniel Sternberg and Sarah Gustafson at Gusto.
Meanwhile, unemployment claims increased to 898,000 in the first week of October 2020. “After declining from a peak of near 7 million in March, weekly claims have clocked in between 800,000 and 900,000 for more than a month as companies readjust their head counts,” write Sarah Chaney and Gwynn Guilford in the Wall Street Journal.
Statistics indicate that workers who have been furloughed for too long are starting to look for work with other companies, rather than continue to wait for their employer to reopen its doors. In August 2020, for instance, job-seekers “continued to find work at a faster rate than they were laid off or furloughed,” writes John Leer, economist for Morning Consult.
As some workers move back into the workforce, however, others who have been laid off or furloughed find themselves falling behind as work falls off their list of daily tasks. The particulars of an office process may be forgotten, for example. Companies seeking to bring back their furloughed workers, then, will need to focus on re-onboarding these workers.
Onboarding for furloughed workers
One of the benefits of furloughing workers is that when work starts up again, “employers do not have to pay for recruiting, selecting, socializing, and training new employees because the furloughed workers can pick up where they left off,” says Jie (Jasmine) Feng, an assistant professor at the Rutgers School of Management and Labor Relations.
Workers returning from furlough have knowledge of the job and the team that a new hire doesn’t possess. But they cannot always jump back in immediately. The longer a furlough lasts, the more support returning workers need as they take up their jobs once again.
Decide how to recall workers
Start bringing furloughed workers back to the team with a clear, neutral recall policy. This policy should lay out guidelines for deciding who returns to work first. For instance, the recall policy may call workers back in order of seniority, says Isaac Mamaysky, an attorney with Potomac Law Group.
While it can be tempting to recall workers based on their performance, this method can also expose a company to legal challenges. When performance-based recall policies are used, they should be based on documented, quantitative measures of performance, says Mamaysky.
When deciding which workers to bring back, “employers may want to develop a business case for their reopening plans by putting in writing an explanation of their business conditions and the number of employees (or the particular skill sets) they need in order to resume operations,” writes John T. Merrell, an attorney at Ogletree, Deakins. This plan can serve as a starting point to set recall criteria.
Consider the effects of furlough schedules
To guard against skill loss, some companies are reorganizing the way they schedule worker furloughs. For instance, workers may be furloughed one or two days a week rather than for an extended period.
Benefits of a staggered furlough schedule include maintaining workers’ skills and team relationships, addressing a reduced but still present workload, and offering greater flexibility to workers in terms of scheduling. Companies must, however, pay attention to certain details even when staggering furlough days.
For example, workplaces will need to attend to the effects of furlough days on employees who are exempt from the Fair Labor Standards Act’s overtime requirements. “Exempt employees must be paid their full salary for any workweek in which they perform any amount of work, subject to very limited exceptions,” writes Koryn M. McHone, an attorney at Barnes & Thornburg. Staggering furloughed weeks, then, may be a better option for exempt workers than simply removing one or two days from each work week.
Evaluate the workspace
Many states have issued orders under their state workplace or public health laws that may affect how a business operates with its teams on site. For example, social distancing requirements may demand that a business changes how its teams’ workspaces are organized. Personal protective equipment requirements may necessitate providing face masks, gloves, and other items to workers. Medical screenings may also be necessary.
Review the way the workplace is set up before furloughed workers return to occupy the space. For instance, consider how to socially distance workers, or how to protect them if they cannot socially distance. Look at ways to enclose workspaces or how to assign them in order to slow down the rate of germ spread.
Welcome workers back
As furloughed workers return, “welcome each one as you would any employee,” recommends Brent Colescott, senior director of global business strategy and transformation at SumTotal Systems.
Prepare a return to work letter that lays out the terms of workers’ returns, including the measures your organization is taking to protect staff from infection. Specify their position, supervisor, job duties, salary, and return to work date. Providing this information ensures that both the company and the worker are clear on the terms of job in the new normal of COVID-19.
Preparing for future disruptions
We know much more about the pandemic than we did in the early months of 2020. Nevertheless, there remain a number of unknowns about the pandemic and its effects on businesses.
One of the best ways to prepare for and stabilize against future disruptions is to communicate openly with workers about the situation the company faces and the options on the table.
Focus on specificity in communication. “For example, if your goal is to save jobs while meeting your bank covenants, say that. If it is to make a series of changes swiftly to shore up job security, clarify that you are prioritizing that decision over other, slower changes,” write Atta Tarki, Paul Levy, and Jeff Weiss in an article for Harvard Business Review.
One potential risk arising from COVID-19 furloughs and layoffs is the risk of lawsuits claiming that the furloughs or layoffs were discriminatory, write Stephanie L. Adler-Paindiris, David R. Golder, and Eric R. Magnus, attorneys at Jackson Lewis. For example, “employers may face disparate impact discrimination claims if layoff and furlough decisions disproportionately affect certain groups of employees based on a protected characteristic,” they explain.
Even some criteria that seem permissible on their face can trigger a discrimination claim. For example, using workers’ salaries as the basis for deciding who is laid off or furloughed may result in older workers bearing the brunt of the changes — thus triggering an age-discrimination claim, writes attorney Andrew Sherrod.
Finally, keep an eye on worker privacy and business confidentiality concerns. Remote workers, for instance, need security tools to prevent data breaches while they communicate digitally with the office. And workers exposed to COVID-19 will require privacy protections for their medical status, says Jeff Christianson, chief legal officer at business software firm Nintex.
Furloughs offer a way for businesses to navigate difficult situations. They help companies maintain relationships with their workers while also managing payroll costs. Maximizing the effectiveness of a furlough, however, requires companies to pay attention to how they bring these workers back onto the team.
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