Requiring Unpaid Time Off

Business Survival Tip
Episode 25
By Carl Kleimann
January 13, 2010

Full Interview transcript

Carl: Hello business owners this is Carl Kleimann from Odyssey OneSource with another Business Survival Tip.
Generally speaking, Texas employers can require employees to take a forced vacation or unpaid sabbatical. If you are forced to reduce your payroll, this may be a better alternative than more drastic measures such as layoffs or pay cuts, in terms of preserving employee morale and having adequate staff when business picks up again.

Before implementing these measures, consider the following:

Make certain that a forced vacation or sabbatical does not violate the terms of any employment agreement. If you have union employees, you should confirm that it does not violate any collective bargaining agreement.

Provide employees with clear notice that no work is to be performed during the vacation or sabbatical and take measures to ensure this directive is followed. For example, you may want to prohibit employees from accessing company email during this time. Keep in mind that if they perform work, they are entitled to pay whether or not the work is authorized.

Because exempt employees must be paid their entire salary for weeks they perform any work, their vacations or unpaid sabbaticals should occur in full week increments.

And finally, as with any employment decision, employers should select employees for vacations or sabbaticals based on objective business criteria and should avoid adversely impacting any protected group.

Work rules vary by state and while allowed in Texas, forced vacations and unpaid sabbaticals may not be allowed in some states. Consult your legal counsel if you are unsure.

I am Carl Kleimann and this has been another Business Survival Tip by Odyssey One Source, ranked as the number one Professional Employer Organization three years running by the Black Book of Outsourcing.
For more information on this and other issues affecting employers, please visit odysseyonesource.com.