COVID-19 Furlough Process

This article will explain the nuances of the furlough process (as a particular kind of leave of absence) and provide information on how to track a furlough in HRIS.

OVERVIEW

A furlough is a kind of leave of absence which continues employment, but reduces scheduled hours or requires a period of unpaid leave. For example, you may reduce an employee's hours to 15 hours per week for a specific period of time to reduce costs, or you might place everyone on a four-week unpaid leave. Generally, this is not considered termination; however, employees would likely still be eligible for unemployment.

In addition, furloughed employees are typically eligible for continued benefits coverage for a certain period of time, as long as all benefits premium payments are made in full. In light of COVID-19, many carriers have also extended the length of time for which a furloughed employee will remain benefits eligible. Please check with your carrier for current provisions around coverage policies for furloughed employees.

STAY UP TO DATE:

Always stay up to date with COVID-19: Consolidated Appropriations Act Updates for 2021.

TRACKING A FURLOUGH IN HRIS

In order to manage a furlough in your HRIS system, Namely recommends using custom fields to collect furlough-related data.

Namely Recommended Custom Fields in HRIS

Custom fields may be used to capture all different types of information around furlough, including a Start Date, Expected Return Date, End Date, and any information that will help you track payroll ramifications, including whether the employee is responsible for benefits deductions during the furlough.

The following image displays the custom fields for Namely's recommended LOA setup, which can be used to track furloughs:

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For more information on setting up custom fields that will work for your organization, please see: Configuring Profile Fields.

Note: as with all custom fields, you can create workflows that establish an approval chain for entering and signing off on furlough data. For more information on setting up workflows, please see: Creating a Workflow.

Custom Field Descriptions and Picklist Options

These descriptions and picklist options are recommended for tracking any type of LOA; you can adjust the descriptions and options according to the particular LOA/furlough needs of your organization.

LOA Documentation
- This field can be used to store any federal/state/carrier documentation.
LOA Eligibility
- This field may be based on an employee's job classification or other determining factor.
- Recommended selections include:
  - Eligible
  - Ineligible
LOA Type
- Details type of leave.
- Recommended selections include:
  - Parental Leave
  - Sick
  - FMLA
  - Furlough
  - Federal Paid Medical Leave - Tier 1
  - Federal Paid Medical Leave - Tier 2
  - Federal Paid Family Leave
  - Non FMLA (Personal/Sabbatical)
LOA Reason for Leave
- Text field for any additional information you would like to add.
LOA Request Date
- Date request made to HR.
LOA Manager Notified Date
- Date manager first informed of request.
LOA HR Notified Date
- Date HR team first informed of request.
LOA Documents Received Date
- Date pertinent documents (e.g., from LOA administrator) received.
LOA Start Date
- Date leave begins.
LOA Expected Return Date
- Return date as estimated when leave begins.
LOA Return Date
- Actual Return Date.
LOA Paid Via
- How is an employee being paid?
- Recommended selections include:
  - Via Namely
  - 3rd Party
  - Unpaid
LOA Percent or Amount of Pay
- Percent of pay or per pay period amount employee is being paid.
LOA Deductions
- How are deductions being handled?
- Recommended selections include:
  - Tracked in arrears
  - Paid by employee via check
  - Paid by employee via payroll deductions
  - Paid by employer
  - Cancelled
LOA Benefits
- Is an employee still eligible for benefits?
- Recommended selections include:
  - Active
  - Inactive
  - COBRA
LOA PTO Accruals
- Is an employee eligible to continue accruing PTO?
- Recommended selections include:
  - Active
  - Inactive
Medical Deduction Arrears Amount
- Area for client to manual update accrued deduction amount.
Dental Deduction Arrears Amount
- Area for client to manual update accrued deduction amount.
Vision Deduction Arrears Amount
- Area for client to manual update accrued deduction amount.

Notes:

While these fields and picklist options are Namely recommended, additional fields may be needed by your organization based on your LOA options (e.g., fields for deductions arrears for additional benefits).
Once any of these fields have been created, you are able to import data into these fields. For more information, please see: Namely Toolkit: Data Imports and Exports.

Payroll and Benefits Considerations around Furlough

While these custom fields will live in HRIS, data entered here may have an impact on your payroll or benefits administration processes. Please see the following table for a list of further system actions you may need to take depending on your selection:

Custom Field	Selection	Subsequent Action In HCM	Subsequent Action In Payroll	Subsequent Action in Benefits	Notes
LOA Documentation	File Upload for LOA Documents	Upload Documents			May need more than one field
LOA Eligibility	Eligible	Select This Employee Status
LOA Eligibility	Ineligible	Select This Employee Status
LOA Type	Parental Leave	Select This Leave Type
	FMLA	Select This Leave Type
	Furlough	Select This Leave Type
	Sick	Select This Leave Type
	Federal Sick Leave (Type 1 thru 3)	Select This Leave Type
	Federal Sick Leave (Type 4 thru 6)	Select This Leave Type
	Federal Family Leave	Select This Leave Type
	Non-FMLA (Personal/Sabbbatical)	Select This Leave Type
LOA Reason for Leave	Text Field	Enter any additional details
LOA Request Date	Date Field	Enter Appropriate Date
LOA Manager Notified Date	Date Field	Enter Appropriate Date
LOA HR Notified Date	Date Field	Enter Appropriate Date
LOA Documents Received Date	Date Field	Enter Appropriate Date
LOA Start Date	Date Field	Enter Appropriate Date
LOA Expected Return Date	Date Field	Enter Appropriate Date
LOA End Date	Date Field	Enter Appropriate Date
LOA Paid Via	Namely	N/A	Upload/key as additional pay or use normal Salary field
	3rd Party	Uncheck "Include in Payroll" if no pay at all through Namely	Reduce or zero out normal Salary if needed. Client to provide 3rd Party Pay Data it applicable for BOL entry.
	Unpaid	Uncheck "Include in Payroll" if no pay at all through Namely	Can zero out salary if paying other items, or remove from payroll completely via HRIS
LOA Percent or Amount of Pay	% of flat $	Update per pay period or hourly wage	Update recurring earnings if applicable
LOA Deductions	Tracking Arrears	Must manually update field for accrued arrears amounts	Must end date deductions if not actively taking or suppress manually in each payroll
	Paid by Employee		If EE is paid via Namely, process as normal. If EE is unpaid or paid by 3rd party, EE to provide client check for deduction cost and amount to be recorded in BOL.
	Paid by Employer		If EE is paid via Namely, process as normal. If EE is unpaid or paid by 3rd party, ER portion will need to be manually tracked and sent to carrier. Amount will need to be provided by client to record in BOL>
	Cancelled		Must end date deductions if not actively taking or suppress manually in each payroll
LOA Benefits	Active
	Inactive			Must end benefits by doing an admin change or move employee to a benefits-ineligible class
	Cobra			Must end benefits by doing an admin change or move employee to a benefits-ineligible class
LOA PTO Accruals	Active	You can either update the User status or re-assign the user to all plans and manually add the carryover and accrual amounts housed withingcustom fields back into the plans
LOA PTO Accruals	Inactive	You can either update the User status or unassign the user from all plans while preserving their PTO accruals and carryover amounts in Custom fields
Medical Deduction Arrears Amount	Amount Field	Must manually update field for accrued arrears amounts	Must end date deductions if not actively taking or suppress manually in each payroll		Can catch employees up in future by manually adjusting deduction amounts in Step 2 of payroll.
Dental Deduction Arrears Amount	Amount Field	Must manually update field for accrued arrears amounts	Must end date deductions if not actively taking or suppress manually in each payroll		Can catch employees up in future by manually adjusting deduction amounts in Step 2 of payroll.
Vision Deduction Arrears Amount	Amount Field	Must manually update field for accrued arrears amounts	Must end date deductions if not actively taking or suppress manually in each payroll		Can catch employees up in future by manually adjusting deduction amounts in Step 2 of payroll.

Furlough Management Example

If you have an employee who is being placed on an unpaid furlough, but will be paying you directly for their benefits premiums, you would use the custom fields as such:

Upload any appropriate documentation in LOA Documentation
Select Eligible for LOA Eligibility.
Select Furlough for LOA Type
Enter any additional details about the leave in LOA Reason for Leave.
Enter all appropriate dates in LOA Request Date, LOA Manager Notified Date, LOA HR Notified Date, LOA Documents Received Date, LOA Start Date, LOA Expected Return Date, LOA End Date.
Select Unpaid for LOA Paid Via
- Per the table:
  - Uncheck "Include in Payroll" in HRIS, if necessary
  - Zero out normal salary, if necessary
Enter $0 for LOA Percent or Amount of Pay
Select Paid by Employee for LOA Deductions
- Per the table:
  - Employee will need to send any deduction payments directly to you
  - Send any deduction data to Service if YTD amounts need adjustments because of employee's direct payments
Select Active for LOA Benefits
Select Inactive for LOA PTO Accruals.
- Per the table, please keep in mind that you may need to change the user's status or manually adjust accruals to account for selection.
Medical, Dental, and Vision Deduction Arrears Amounts would be $0 in this instance, as the employee is making payments for their benefits, but you would use this fields to record any money owed by the employee for these deductions.