How Furloughs Will Affect Pay and Benefits
By Kellie Lunney
February 28, 2013 - GovExec.com
Well, the deadline is here at last: Sequestration lands in less than two
days. Despite all the rhetoric from both sides of the aisle, there are few
serious efforts under way to head it off by Friday.
Therefs also a dearth of specific information on possible furloughs and how
they would affect federal employeesf pay and benefits. Agencies now are starting
to send out general notices to employees on the likelihood of furloughs
during the rest of the fiscal year. Actual furloughs in some agencies could
start as early as March or April, if Congress opts not to reverse the
automatic spending cuts or otherwise modify the sequester timetable. Congress
also needs to keep the government open past March 27, so itfs likely they will
try to incorporate some solution on the sequester into extending the continuing
resolution.
But who knows?
Letfs assume the sequester stays in place and there are furloughs. Federal
employees and managers should look closely at the Office of Personnel
Managementfs furlough guidance here
as well as the agencyfs supplemental
information on the topic.
Itfs important to remember that agencies are supposed to turn to furloughs
only
as a last resort, and that some agencies already have said they will
not have to furlough workers to meet the spending cuts mandated by
sequestration.
Here are some highlights from OPMfs guidance on how furloughs affect certain
pay and benefits:
- Outside Employment: Employees can take another job while on
furlough to help make ends meet, but they need to vet it with their agency to
make sure itfs not a conflict of interest or otherwise prohibited. The same
standards of executive branch-wide ethical conduct (5
CFR, part 2635) apply to employees during furloughs as they do under
regular operations. OPM urges feds to review the rules and consult their
agency ethics official to make sure all ifs are dotted and tfs crossed.
- Unemployment Compensation: Some federal employees could be eligible
for unemployment insurance while they are on furlough. It depends on the laws
of the state where they work. For information, read this
guidance from the Labor Department and click
here for links to individual state offices.
- Severance Pay: Furloughed employees are not entitled to
severance pay because they are not being separated from federal service. A
furlough is when an employee is placed in temporary nonduty, nonpay status
because of lack of work or funds, or other nondisciplinary reasons.
- Health Care: Fedsf health benefits will be protected during a
furlough. Agencies and employees will continue to pay their respective shares
of the health premiums. gIf an employeefs paycheck is insufficient to cover
his/her share, the enrollee share will accumulate and will then be withheld
from pay upon return to pay status,h the OPM guidance states.
- Buyouts/Early Outs: Agencies that have approval to offer early
retirement and/or buyouts can offer those options to eligible furloughed
employees. Agencies also could decide to offer early outs or buyouts in lieu
of a furlough. gThe agency would decide which option to take based on its
situation, e.g., the need to permanently reduce or restructure its workforce
or to save funds by furloughing employees.h
- Paycheck Deductions: The government has a priority list of
deductions for payroll providers if an employeefs gross pay is not enough to
cover all the typical paycheck deductions, which could very well happen during
a furlough. The top three on that list are deductions for retirement, Social
Security and Medicare. Click here
for a complete list and OPMfs policy guidance on the issue. Again, that
order of preference only applies when a fedfs gross pay is insufficient to
permit all the usual deductions.
Pay Solidarity
Sen. Barbara Mikulski, D-Md., said she thinks lawmakers need to sacrifice
their own pay if federal employees are forced to take unpaid leave as a result
of sequestration. gIf the federal employees are going to take a 20 percent cut
and be furloughed, we should take a 20 percent cut,h Mikulski said Tuesday on
the Senate floor. gIf they take a hit, we should take a hit, and I look forward
to moving on that legislation,h said the new chairman of the Appropriations
Committee. Many federal employees live and work in Maryland, so Mikulskifs
staunch defense of feds and opposition to sequestration comes as no
surprise.
The Defense Department has estimated that civilian feds who are furloughed
could lose up to 20 percent in pay as a result of the unpaid time off. Deputy
Defense Secretary Ashton Carter has said he would give up 20 percent of his pay
in solidarity with furloughed employees. Political appointees and lawmakers are
not subject to furlough.
By Kellie Lunney
February 28, 2013
http://www.govexec.com/pay-benefits/pay-benefits-watch/2013/02/how-furloughs-will-affect-pay-and-benefits/61563/