Can an employer and employee agree to a furlough instead of FMLA leave?

On Friday, my friend, Jeff Nowak, blogged at his FMLA Insights blog about whether an employee may take FMLA leave during a furlough?

And that got me re-thinking a question that he and I had discussed before, namely, can an employer and employee agree to a furlough instead of providing the employee with leave under the Family and Medical Leave Act?

First of all, why would the employee agree to that?

Well, FMLA leave is unpaid. But, if the employee has some PTO banked, s/he can run that time concurrently with unpaid FMLA. Otherwise, the leave is unpaid.

But we still haven’t answered the question of why take a furlough instead of FMLA? The answer for the employee is unemployment compensation, state and federal. Combined, that could be well over $1,000 per week. Plus, the employee may still be eligible for health benefits on the employer’s plan. Not too shabby.

Why would the employer agree to this?

In the current environment, the company may be doing the employee a solid. And FWIW, it’ll save the company some FMLA paperwork.

So, what’s the problem here?

For starters, the U.S. Department of Labor would frown on this. Last year, I blogged here about a DOL opinion letter in which the administrative agency concluded that an FMLA-eligible employee may not decline FMLA leave and an employer may not refuse to designate it as such:

First, an employer is prohibited from delaying the designation of FMLA-qualifying leave as FMLA leave. Once an eligible employee communicates a need to take leave for an FMLA-qualifying reason, neither the employee nor the employer may decline FMLA protection for that leave….Accordingly, when an employer determines that leave is for an FMLA-qualifying reason, the qualifying leave is FMLA-protected and counts toward the employee’s FMLA leave entitlement….Once the employer has enough information to make this determination, the employer must, absent extenuating circumstances, provide notice of the designation within five business days. Accordingly, the employer may not delay designating leave as FMLA-qualifying, even if the employee would prefer that the employer delay the designation.

Yeesh! Tell us how you really feel, DOL.

(P.S. – If you operate in the Ninth Circuit, the DOL’s position doesn’t hold water based on this earlier opinion.)

Separately, one of the benefits of FMLA leave is job restoration for the employee. So, if s/he bypasses FMLA for the furlough and the short-term gain of unemployment compensation, there are no guarantees that the employer will reinstate the employee because the employee would have waived those job restoration rights by refusing FMLA leave.

But, wait, there’s more.

Generally, a claimant must be able to work, actively seeking work, available for work, and not refuse an offer of suitable work to receive unemployment compensation benefits and continue to get them each week. A claimant who negotiated a furlough may have trouble certifying eligibility for unemployment compensation in good faith. And if the employee does collect unemployment compensation, that may get charged against the employer’s experience rating

Plus, if the leave has anything do with COVID-19, that would ordinarily trigger the Families First Coronavirus Response Act, which affords paid leave. However, the DOL has clarified that a furloughed employee cannot collect emergency paid sick leave or expanded FMLA. So, maybe no u/c and no FFRCA leave too.

So what do you do if an FMLA-eligible employee wants a furlough instead of FMLA? Give the employee the FMLA paperwork to complete, designate the leave, and provide the covered time off from work.