Time Out: How should in-house attorneys handle the proliferation of furlough programs?

Ray of Hope

Programs tying a cut in an exempt employee's salary to a reduced workweek--such as cutting pay 20 percent and the workweek to four days--raise the most red flags. While this is often called a furlough, some employment law experts argue it should be called a salary reduction. That's because employers can reduce salaries, as long as they don't do it too often and as long as the exempt employee's pay does not drop below $455 per week. It's not clear whether federal law allows tying the pay cut to a corresponding reduction in hours.

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Mary Swanton

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