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FAQs for 2018-19 Federal Shutdown

North Carolina

 

The following guidance is offered to state agency employees who are furloughed because their agency does not have adequate federal funds to support their position during the 2018-19 Federal Shutdown. Furlough notifications will be provided when necessary to impacted employees paid in full or in part through federal funds by their employing agency. If you have additional questions, please contact your supervisor or agency Human Resources Office.

A. GENERAL

  1. What is furlough?
    A furlough is the placement of an employee in a temporary non-duty, non-pay status because of lack of work or funds, or other non-disciplinary reasons. As of Dec. 28, the 2018 Federal Shutdown does not affect all state employees whose salary is paid in full or in part through their employing agency as funding sources vary.
  2. What is a shutdown furlough and why is a shutdown furlough necessary?
    If funds are not available through an appropriations law or continuing resolution, a “shutdown” furlough occurs.  In this case, a shutdown furlough will impact some state employees when their agency no longer has the federal funds necessary to operate and must shut down those activities which have been deemed by the federal government as non-excepted. Furloughed employees will be placed in Leave Without Pay (LWOP) status. 

 In some cases, agencies may have flexibility to fund positions through alternative funding sources.  Agency Human Resource offices should work with their agency budget office and, if needed, seek advice from the Office of State Budget and Management (OSBM) before determining whether a furlough is necessary at this time.

B. WORKING DURING FURLOUGH

  1. May an employee volunteer to do his or her job on a non-pay basis during a shutdown furlough?
    No.  As per federal law (31 U.S.C. 1342), and unless otherwise authorized by law, an agency may not accept the voluntary services of an employee. 
  2. What happens to employees scheduled for training or travel during a shutdown furlough?
    Furloughed employees who are scheduled for training or travel during the 2018 Federal Shutdown remain on LWOP. As such, they are advised not to attend any scheduled training and to cancel or postpone any travel.
  3. May employees take other jobs while on furlough?
    While on furlough, an individual remains an employee of the State of North Carolina.  Dual employment and secondary employment policies continue to apply.  Before engaging in outside employment, the employee should talk with his or her supervisor to ensure compliance with policy and obtain agency approval.

C. PAY

  1. Will employees who are furloughed get paid?
    Congress will determine whether furloughed employees receive pay for the furlough period.
  2. Will employees receive pay for time worked up to the date of furlough notification?
    Yes. Employees will receive payment in the next payroll cycle for all hours worked up to the date of notification.
  3. Will employees continue to receive longevity pay while on furlough?
    If the furlough is a brief LWOP period of less than half the regularly scheduled work days and holidays in the month, then eligibility for longevity will be maintained.  However, if the furlough continues for an extended period of more than one-half of the regularly scheduled work days and holidays in the month, then eligibility for longevity is suspended until the employee returns to work and completes the necessary service time toward the longevity anniversary date.  This may impact the employee’s longevity due date.  If the federal government provides funding retroactive to the beginning of the employee’s furlough, then the time furloughed will count toward longevity eligibility.
  4. What happens if the furlough lasts the entire month of January and there is no pay to cover deductions in the January payroll?
    Deductions below will be handled as follows for the February payroll, if the furlough ends by February:
  • SECU deductions (mortgages, car payments, loans) will not be double-deducted in the February payroll.  Payroll deductions will stop if the deduction is not taken in January.  The employee must work directly with the SECU to cover the January deduction since it is not payroll-deducted.  
  • Garnishments (such as child support, IRS agreements, student loans, bankruptcy) will not be double-deducted in February payroll, but the deductions will automatically restart in February.  Employee must work directly with the applicable agency to make payment for January to avoid any applicable penalties.
  • 401K/457 Contributions will not be double-deducted in the February payroll, but the deductions will automatically restart in February. If employee wants to make up the missed contribution, they can complete a one-time deferral form.
  • 401K/457 Loans will be double-deducted in the February payroll.
  • Employee association dues will be double-deducted in the February payroll.

D. LEAVE AND OTHER TIME OFF

  1. May a furloughed employee take previously approved paid time off (annual, sick, civil leave, military leave, etc.) during the furlough period?
    No.  All paid time off during a shutdown furlough period will be canceled because the requirement to furlough supersedes leave and other paid-time-off rights. 
  2. If an employee is scheduled to take approved unpaid leave during a shutdown furlough, should the agency provide the employee with a furlough notice?
    It depends.  If the employee is not expected to work during the furlough period (for example, a one-year period of leave without pay for a military deployment), then the agency is not required to provide the employee with a furlough notice.  If, however, the employee is scheduled to return from unpaid leave during the anticipated furlough period, the employee should be provided with a furlough notice (effective the date of the scheduled return).
  3. Does LWOP under the Family and Medical Leave Act (FMLA) that is scheduled to be taken during a shutdown furlough period count toward the employee’s 12-week FMLA leave entitlement?
    No.
  4. If an employee is scheduled to take paid leave under FMLA during a shutdown furlough, should the employee be furloughed?
    Yes.  An impacted employee must be placed in furlough status during any paid leave scheduled to be taken during a lapse in appropriations that makes it impossible for a state agency to continue funding the position.  If an employee is scheduled to take paid leave under FMLA during the federal shutdown (either continuously or intermittently), the paid leave will be canceled, and the employee must be furloughed for any period during which paid leave was scheduled.  As such, this period will be documented as furlough days.  No days associated with a shutdown furlough period will be counted against an employee’s 12-week FMLA leave entitlement.
  5. Does the shutdown furlough affect the accrual of vacation leave and sick leave?
    If the employee is furloughed less than one-half of the regularly scheduled workdays and holidays in the pay period, the employee’s leave accrual will not be affected for that period. However, if the furlough period results in an extended leave of absence without pay (more than one-half of the regularly scheduled workdays and holidays in the pay period), then the employee will stop earning vacation and sick leave for that period.
  6. Will employees get paid for a holiday that occurs during a shutdown furlough?
    No.
  7. Can employees on paid military leave continue to receive military leave benefits during a furlough shutdown?
    No.  As with other types of paid leave, paid military leave will be canceled for days covered by furlough.
  8. Will employees continue to receive a reservist differential payment while on active duty when they are furloughed from their state civilian employment?
    No.  The reservist differential payments are intended to make up the difference between the employee’s customary civil service compensation and his or her military pay. Such payments are made from funds of the employing agency appropriated for the payment of employees’ salaries.  Since funds are not available for employees’ salaries during a furlough, no funds may be obligated towards any type of payment for reservist differential.  However, if subsequent legislation is passed reimbursing employees their civilian pay for the period of the furlough, it will be necessary for the agency to calculate any reservist differential payments that may be owed.

E. BENEFITS

  1. Will an employee continue to be covered in January under the State Health Plan during the Federal shutdown furlough?
    Yes.  The December payroll included the cost of coverage for the month of January.  Beyond January, the best practice is for employees who do not receive enough salary for payroll premium deductions to submit premium payments to BEST Shared Services to ensure continued coverage.  If premium payments are made and Congress approves retroactive pay, premium payroll deductions will be caught u and any excess medical payments will be refunded to the employee.  If Congress does not approve retroactive pay, employees working less than 30 hours a week may be responsible for the full premium cost.  BEST Shared Services will be working with OSHR and SHP to identify, monitor and communicate with impacted employees in order to minimize any negative effects. 
  2. What happens if an employee decides to terminate State Health Plan Coverage while on furlough to avoid the expense?
    Employees who do not want to be responsible for the full cost of State Health Plan coverage when their position is no longer funded have the option to drop coverage and re-enroll later when the funding is restored.  Employees can also drop dependent coverage but retain the employee only cover under this option.  This option should only be used if the employee (or dependent) wants to go without State Health Plan coverage for a period of time.
    Therefore, if and when an employee’s salary is no longer funded, the employee should call the Eligibility and Enrollment Support Center at 855-859-0966 and request to drop State Health Plan coverage for themselves and/or their dependents using a “leave of absence without pay” qualifying life event (QLE).  The effective date of the QLE will be the date the position is no longer funded and the change would be effective at the end of that month.  The employee would be eligible to re-enroll again for the first of the month following returning to full pay.   
  3. What happens to an employee’s NCFlex Flexible Spending Health Care or Dependent Care coverage if furloughed?
    Payroll deduction for NCFlex benefits will cease for any employee that does not receive pay.  Health care and dependent day care claims incurred during the non-pay status will not be reimbursed unless the employee chooses to continue to pay the elected monthly contribution on a direct pay basis. Such deductions will resume when the shutdown concludes.
  4. What happens to an employee’s coverage under the NCFlex insurance programs if furloughed?
    The employee’s NCFlex insurance programs’ coverage will continue for the month of January, even if an employee does not make the premium payment in January.  Since the employee will be in a non-pay status, the NCFlex insurance premium will accumulate and be withheld from the employee’s February pay*. 
    If the furlough continues beyond the month of January, the NCFlex insurance vendors have agreed to delay premium payments for up to 60 days.  If employees do not pay premiums owed by April 1, insurance coverage will be terminated retroactive to January 1, 2019.  Employees who have coverage terminated retroactively to January 1, 2019 will be responsible for paying any claims incurred January 1, 2019 or later.

*Note: Dependent daycare coverage will not continue while the employee is in non-payment status. The funds available in the employee’s account is equal to the amount that has been contributed to the account (via payroll deductions).

  1. Does an agency continue to pay an employee for Workers’ Compensation during the furlough?
    Yes.  State law requires the payment of Workers’ Compensation benefits.  Funding for Workers’ Compensation comes from a different funding source than the position funding.
     
  2. Does an agency continue to pay an employee for Short-Term Disability (STD) during furlough?
    Yes.  Retirement System law requires the payment of STD benefits if eligible, even if the employee has separated from employment after the disability begins.  Funding for STD comes from a different funding source than the position funding. The furlough does apply to employees who choose to exhaust leave in lieu of STD benefits or during the waiting period to begin STD.

F. EMPLOYEE ASSISTANCE

  1. Are employees entitled to unemployment compensation while on furlough?
    In the event of an extended furlough, employees may become eligible for unemployment compensation.  For more information about unemployment in North Carolina or to file a claim online, visit the Division of Employment Security (DES) website or call the DES Customer Call Center at 888-737-0259 between 8 a.m. and 5 p.m. Monday through Friday. Note that employees will be required to reimburse unemployment pay if the Congress approves retroactive pay for furloughed employees.
     
  2. Does the State Employees Credit Union (SECU) provide any services to assist with financial hardships resulting from the furlough?
    Yes.  The SECU does help employees who are furloughed because of a federal shutdown.  Employees should contact their local SECU branch for assistance, or visit https://www.ncsecu.org/BranchServices/LaidOffTurntoSECU.html
  3. Are employees who have been furloughed eligible for Employee Assistance Program (EAP) services through McLaughlin-Young Group?
    Employees who are subject to the State Human Resources Act who have been furloughed are eligible for EAP services for up to 90 days through McLaughlin Young Group.  EAP counselors will be available to help an employee assess his or her situation and plan for dealing with challenges associated with temporary job loss.
    Furloughed employees may access the NC EAP provided by McLaughlin Young Group 24 hours a day, seven days a week, by calling 1-888-298-3907 or 704-717-5295, or visit https://www.mygroup.com/. There is no cost to the employee or the employee’s immediate household family members.

G. SERVICE CREDIT

  1. Is the period of furlough (LWOP) considered a break in service?
    No.  The furlough period is not considered a break in service and therefore does not impact an employee’s career status, nor does the employee have to work another probationary period upon return to work.  However, the period of furlough may affect the calculation of creditable service for certain purposes.
  2. Will an employee receive state service credit during the furlough period?
    The ability to receive state service credit depends on the duration of the furlough.  If the furlough lasts for less than one-half of the regularly scheduled workdays and holidays in the month, then the employee continues to receive total state service credit for that month.
    However, if the furlough lasts for more than one-half of the regularly scheduled workdays and holidays in the month, then the employee will not receive total state service credit for that month.  This will impact the employee’s longevity due date.  If the Congress approves funds for retroactive pay to the beginning of the furlough, then total state service credit will be awarded.
  3. Will an employee receive Retirement Service Credit during the furlough period?
    While on LWOP, an employee is not making contributions to the Retirement System, so the system does not allow Retirement Service Credit.  If the Congress approves funds for retroactive pay to the beginning of the furlough, then Retirement Service Credit will be awarded. 
  4. Can an employee purchase Retirement Service Credit for the period of LWOP due to furlough upon return to work?
    The ability to purchase Retirement Service Credit depends on how many years of retirement service credit the member has in the Retirement System.  Any member in service with five or more years of credited membership service may purchase creditable service for periods of service which were interrupted due to involuntary administrative furlough due to a lack of funds to support the position.  If the federal shutdown continues for more than a month, the furloughed employee could purchase creditable service for the period in which he or she was involuntary furloughed, provided he or she meets all other requirements.

H. PAYMENTS UPON SEPARATION FROM STATE SERVICE

  1. How does a shutdown furlough impact a separating employee’s lump sum payout of their unused leave (i.e., vacation/bonus, comp time, etc.) and longevity?  
    During a shutdown furlough, any payments incurred by the agency for an employee’s lump sum separation payment will be delayed until funds are available.

I. PROCEDURES

  1. Can an employee be furloughed without first receiving written notice of decision to furlough?
    Yes.  While an employee must ultimately receive a written notice of the decision to furlough, it is not required that such written notice be given prior to effecting the emergency furlough; in these instances, the notice may be provided in person.  Advance written notice (including through mail) is preferable, but when prior written notice is not feasible, then any reasonable notice (such as by phone, in person, email to work or home email address, or by mail promptly after initiating the furlough) is permissible.  
  2. What happens to new employees who are scheduled to report to work for the first time during a shutdown furlough?
    By law, individuals do not become state employees until they report for work.  Agencies should delay the hire date for new employees who are scheduled to start employment during a shutdown furlough.
  3. When a shutdown concludes, how will furloughed employees be notified to return?
    Agencies are responsible for establishing procedures for communicating with employees during the shutdown furlough. When a federal shutdown concludes, the N.C. Office of State Budget and Management and/or Office of State Human Resources will notify agencies to alert furloughed employees of the agency’s plan to resume work.


1/9/2019