It was our second year of teaching. We were barely scraping by. Then, in March, we were told that due to budget cuts we would be furloughed for 5 days. Our final paychecks would be reduced. What exactly did that mean and would we be able to pay our bills?
When the economy turns down and state budgets start shrinking, school districts begin looking at furlough days for teachers and other educators. In this post, we explore furlough days and their impact.
What Are Furlough Days?
A furlough is a temporary unpaid leave. A furlough day is a mandatory day off.
For some workers, furloughs may be applied in terms of hours. In education furloughs are typically implemented in days. On those days, the entire district is closed for business. This maximizes the savings by halting transportation, food service, and utility usage.
Are Furlough Days Paid?
No. Furlough days are unpaid days to save costs for a district (or company.) Your pay will be reduced by the equivalent of one day’s wages.
How Are Furlough Days Different From RIF and Layoff?
Furlough days are temporary and typically short term. A teacher RIF (reduction in force) or layoff is generally longer, total loss of a job, and may become permanent.
While furlough days are economically painful, they’re almost always preferable to loss of a job through RIF or layoff.
Why Does a District Implement Furlough Days?
Furlough days are the result of budget reductions. For school districts, personnel costs account for 80-90% of operating costs. Contrary to public perception, there is very little excess in most school district budgets. As a result, when budgets need to be reduced, employees are always impacted.
Related Post: Preparing For A Recession As An Educator
If the budget reductions are due to short-term or one-time causes, then a furlough makes sense. The district can reduce costs by working fewer days for one year without having to cut staff permanently. Furloughs can be useful during short economic downturns or economic shocks because revenue will rebound.
Furloughs make less sense for structural budget deficits such as a permanent reduction in tax rate or declining enrollment. In these cases, since the downturn is ongoing furloughs do not solve the issue. A district should “right size” and use RIF in these circumstances.
Who Decides How Many Furlough Days?
The need for furlough days will be decided as part of the district budget process. For example, if a district needs to cut $1,000,000 from the budget and a day of school costs $200,000 it may choose to implement 5 furlough days.
Furlough days have a direct impact on students and staff so are not implemented lightly. A district may choose instead to implement a mix of 3 furlough days and $400,000 in other cost cuts.
If you are represented by a union and your contract specifies a number of work days, then the district and union will need to agree on any furlough days before implementing. Sometimes this results in a reduction of the number of teacher furlough days a district would like to implement. Other times, the specific days (instructional vs. professional development vs. grading) are negotiated.
For non-represented staff, the district may implement furloughs without agreement.
How Does a Furlough Day Impact Your Pay?
A furlough day results in the loss of one day’s pay.
You can determine the impact on your pay by using your annual salary, your contract days, and the number of furlough days.
Annual salary / contract days = daily wage
Daily wage * Number of Furlough days = loss of pay
Let’s say you are a teacher who earns $80,000 a year for 200 days of contract work.
$80,000 / 200 = $400/day
The district announces 7 furlough days.
$400/day * 7 days = $2800.
You will lose $2800 as a result of furlough days.
Are Benefits Impacted by Furlough Days?
It depends. I know that is a very unsatisfying answer. Yet, true.
Whether, and which, benefits are impacted depends on state employment rules, district policies, and labor agreements. I can share with you what is typically true, but encourage you to contact your HR office or association representatives for specific information.
Employer provided health insurance isn’t usually impacted by short-term furlough days.
In my experience, employers do not reduce leave accrual proportional to furlough days unless it is an extended furlough.
Pension contributions, and the wage used for pension benefits, is usually impacted by a small amount – proportional to the number of furlough days. That is, if you contribute 6% of your salary to your pension and you lose the equivalent of $100 in wages, then $6 less will be contributed. Your salary used for calculating pension payouts would be reduced by $100 as well.
Again, I encourage you to confirm benefits with your employer should you be experiencing furlough.
Do I Qualify For Unemployment?
This depends on the rules of your state. I can’t offer more advice than to check with your state’s employment department.
Can I Use Leave Instead of Taking The Furlough Day?
Usually no since this doesn’t result in direct and immediate savings for the district. However, in some cases it is allowed. Check with your district to confirm.
How Will Furlough Days Affect My Paycheck?
When and how the furlough shows up in your paycheck depends on how pay works in your district. For some employees, your pay will be reduced during the pay period in which the furlough day occurred.
For teachers and administrators, it’s usually more complicated. Most salaried employees in districts have their annual salary divided over an even number of paychecks. (10 or 12 depending on the district.)
If furlough days are implemented prior to the school year, then the checks will just be evenly reduced. However, if furlough days are implemented mid-year, then the reduction is larger.
Let’s look at the most extreme case using the hypothetical $80,000 teacher above. The teacher is paid in 12 even paychecks, with 3 being distributed in June. (See: Do Teachers Get Paid In the Summer?)
$80,000 / 12 = $6,666.67
Each month, the teacher’s gross pay is $6,666.67.
If the 7 furlough days are implemented at the beginning of the year and divided over the 12 months, then pay only drops to $6433.33. Noticeable, but not necessarily painful
($80000 – $2800) / 12 = $6433.33
However, If the 7 furlough days above are implemented in the final month of the school year, this teacher will see a huge impact. They will have already received 9 paychecks at $6,666. They have already been paid $60,000 of their annual salary.
That means the $2800 will be applied to the final three paychecks.
($20,000 – $2800) / 3 = $5,733.33.
That’s a drop in gross pay of more than $900/month for the last three paychecks. Ouch!
Furlough days are unpaid temporary leave days that districts use to save money during budget downturns. Furlough days are painful, but often preferable to being RIFed.
The amount of pay you lose is dependent on the number of furlough days implemented, your annual pay, and the number of days you are contracted to work. How this reduction shows up in your paycheck depends on when, and how, furlough days are implemented in your district.
Your district human resources department should be able to explain the impact of furlough days on your benefits and pay.
If you are reading this because you expect to experience furlough days – I’m sorry! Budget reductions can have a significant impact on educators and the students we serve. Please know this is usually temporary.