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Furlough Program Frequently Asked Questions
Even if you are familiar with the provisions of the existing Voluntary Furlough Program, please read through the entire FAQ's sheet carefully, as some of the information has changed.
What is the Voluntary Furlough Program?
The Voluntary Furlough Program is intended to reduce salary costs and thereby lessen the need for reductions in the workforce by allowing employees to take up to 30 days off from work without pay in a calendar year without adversely affecting certain benefits. Unlike an unpaid leave of absence, a furlough would allow many employee benefits to remain in force. You would retain seniority, continue eligibility for promotional opportunities and employment lists, and would see no change in your anniversary date. If you are a full-time employee and are covered by your employer's health benefits plan, you could continue health coverage while on furlough.
The furlough may be extended by up to another 60 days in a calendar year under certain conditions (see exceptions in Rule Relaxation for State Employees below). Furlough and the furlough extension are subject to the approval of the employer.
Rule Relaxation for State Employees
The Department of Personnel Merit System Board issued a "rule relaxation" that allows for employees of State colleges to request unlimited furlough through the first six months of Fiscal Year 2009 (i.e. December 31, 2008), without loss of benefits. This includes employer-paid health benefits. Under the relaxed rules, unlimited employer-approved furlough may be taken as long as there is no increase in overtime costs, need to backfill a position, or a loss of anticipated revenue. Voluntary furlough taken during this time period may be used for any purpose except for sick leave, leave without pay due to disability, or to seek or engage in alternative employment.
How do I request extended furlough once the "Rule Relaxation" period has ended?
If you have met or exceeded the 30 day Voluntary Furlough limit as of December 31, 2008, and wish to apply for a Furlough Extension, you must request these days in ten-day increments. You may take them over several weeks or months, but you must schedule ten days at a time. While on Furlough Extension, your seniority and anniversary date are not changed and you continue to accrue time and retain eligibility for promotion. Your health benefits, however, are no longer extended without additional cost to you.
Do I have to take full days off?
No. If you take advantage of the furlough program, you may schedule - with your employer's approval -any number of days off up to 30 days (furlough days taken through December 31, 2008 are not subject to the 30-day limit). You may choose to work shorter days, a shorter work week, or take a number of consecutive days off (similar to a leave of absence without pay), while retaining "in pay" status for certain benefit purposes. in exchange for fewer work hours or days, you would receive proportionately less pay.
How will my health benefits be affected during the period of Voluntary Furlough?
If you are covered by the State Health Benefits Program), and take a furlough on an intermittent basis, or consecutive furlough days numbering fewer than 30 days (furlough days taken through December 31, 2008 are not subject to the 30 day limit), employer-paid health benefit coverage will be unaffected. If you are required to pay any share of the premiums or the 1.5% base wage contribution, and there is insufficient salary earned in a pay period to cover this deduction, payment must be made by remitting your employee cost/share in advance to your employer. If payment is not received, health benefits coverage will be suspended for the pay periods in which the furlough is taken. Health benefits coverage will resume when you return to active payroll status and with the filing of an application, as is the case for any return from authorized leave of absence.
How will my health benefits be affected during the period of Extended Furlough?
If you have met or exceeded the 30 day Voluntary Furlough limit as of December 31, 2008, and receive approval for a Furlough Extension, you must pay the full cost of coverage (employer and employee shares) for any pay periods in which a furlough day is taken.
These payments must be made in advance to the employer. If payment is not received, health benefits coverage will be suspended for the pay periods in which the furlough is taken. Health benefits coverage will resume when you return to active payroll status and with the filing of an application, as is the case for any return from authorized leave of absence.
What is the impact of a furlough on my pension?
Defined Benefit Plan Pensions
The State-administered defined benefit plan pensions include the Teachers' Pension and Annuity Fund (TPAF), Public Employees' Retirement System (PERS), Police and Firemen's Retirement System (PFRS), State Policemen's Retirement System (SPRS), and Judicial Retirement System.
- If you take your furlough in a continuous block of time and therefore earn no pay in any given pay period; you will receive no pension service credit for those pay periods. Upon return to active payroll status, you will be able to purchase this service credit like any other authorized leave of absence.
- If you take your furlough over several pay periods, so that there are no pay periods without pay, there will be no impact on your pension as long as you earned sufficient salary to take your normal pension deductions during each pay period. Since your regular deduction is based on your contractual salary, you will receive credit for both service and full salary during that pay period if the deduction is taken.
- If you do not earn sufficient salary in any given pay period to cover your regular pension deductions, then you will be considered to be on a leave of absence without pay for that pay period.
Alternate Benefits Program (ABP)
- If you begin a furlough on intermittent days, or for a partial month, and earn more than 50 percent of your regular base salary, the full 5 percent employee deduction and the 8 percent employer share will continue to be contributed as though you received full base salary.
- If you receive less than 50 percent of your base salary, no employee or employer deductions are taken and no service credit is earned for that month. Since there are no provisions for purchasing service credit in the ABP, that period of service cannot be reclaimed.
What is the impact on group life insurance?
- If you take furlough on intermittent days, State group life insurance coverage will not be affected. The contributory life insurance premium (if applicable) will continue to be deducted from your paycheck at the rate you paid while receiving full salary.
- If you take up to 30 continuous furlough days, group life insurance coverage will extend throughout the duration of the leave.
- If a furlough extends beyond 30 continuous days, you may continue group life insurance coverage for up to 93 days by remitting the premiums in advance to your employer. This mirrors the group life insurance requirements for a leave of absence without pay for personal reasons.
- If you take a furlough longer than 93 consecutive days, the group life insurance coverage will cease until you return to active employment. You may choose to convert your group life insurance coverage to a private policy with the Prudential Life Insurance Co. The converted policy would have to be surrendered when you return to active payroll status in order to reinstate your State group life insurance coverage. If you do not surrender the converted policy, you will be required to submit satisfactory proof of insurability before you can be covered again under State group life insurance coverage.
What if I have an outstanding loan?
- If you choose to take an intermittent furlough, there will be no change or interruption in your loan repayment schedule so long as sufficient salary is earned each pay period to cover the pension loan deduction. Likewise, as long as you are on furlough and receive sufficient salary each pay period to meet all pension obligations, you may continue to exercise the option to take a new pension loan.
- If you take continuous furlough days and receive no pay, there can be no loan deductions for pay periods not worked. If you miss a loan payment, the period of time over which the loan is repaid will be extended. However, when you return to active payroll status your employer should contact the Division to have the loan recertified to include accrued interest when regular payments resume.
Service Purchase Payments (Arrears)
- Arrears payments are handled much like loan payments. There will be no change or interruption in repayment schedules if furlough is taken intermittently and/or sufficient salary is earned in each pay period/month to cover all pension deductions.
- If you take continuous furlough and no days are worked in one or more full pay periods; arrears payments are suspended until you return to pay status. There will be no need to recertify arrears payments upon return to active employment.
- The Division will process new purchase requests for employees who have made a pension contribution within the past two years.
NJ State Employees Deferred Compensation Plan and Supplemental Annuity Collective Trust (SACT)
During a period of intermittent furlough, deductions will continue at the contracted rate based on actual base salary earned. In the event a furlough is extended, no contributions can be taken for any pay period without salary, or with insufficient pay to cover regular deductions.
