Furlough programs, if designed improperly, carry some liability risk (read “Time Out,” the full story on furloughs). But the possibility of a wage and hour lawsuit is just one factor to consider when planning a furlough. The impact on employees’ eligibility for insurance benefits and unemployment compensation are two other considerations.
A reduction in hours could have the unintended consequence of disqualifying employees from medical, dental and life insurance coverage, which commonly are offered only to full-time employees who work a designated number of hours per week.
