Division of State Human Resources

Cost Savings Progams

Topics

 

Furlough

Mandatory Furlough

 

References
 Topics

 

Implementation

  • An agency may implement a mandatory furlough program if the general funds appropriated for a State agency, institution or department are less than the general funds appropriated for that State agency, institution or department in the preceding fiscal year, or in a fiscal year in which an agency that is funded by other funds projects other funds collections to be less than in the prior fiscal year, or whenever the General Assembly or the Executive Budget Office implements a midyear across-the-board budget reduction.

  • The agency head will determine whether to implement a mandatory furlough program.

  • The agency may specifically designate the days to be taken for the furlough or the agency may allow employees to request the days for the furlough. Ultimately, the scheduling of furlough days or portions of days, shall be at the discretion of the agency head.

  • Legislation allows mandatory furlough programs implemented by state agencies, excluding those implemented by institutions of higher learning and technical colleges, to be based upon pay bands for classified employees and pay rates for unclassified employees within the agency or designated department respectively. For example, an agency could require a higher number of furlough days for classified employees in pay band 7 and above and unclassified employees with a pay rate of $70,000 and above within the agency or within a designated department than employees in band 6 and below or unclassified employees with a pay rate of $69,999 and below within the agency of designated department. 

  • S.C. Code Section 41-10-30 requires that an employee have notice of any changes in wages and hours in writing at least seven (7) days before the effective date of the change; therefore, the agency should make sure that seven (7) days have passed between notification of the furlough program and the payroll effective date of any salary reductions.

  • An agency can spread out the reduction in pay across several pay periods or over the balance of the fiscal year regardless of the pay period within which the furlough occurs under the provisions of the S.C. Code Section 8-11-192. The reduction in pay should not be spread over the balance of the fiscal year for temporary employees.  Regardless of the method chosen by the agency, there are FLSA implications for exempt employees. 

  • The exempt status of employees is affected by a furlough if the employees furloughs and their pay is reduced. If the agency spreads out the reduction in pay across several pay periods or over the balance of the fiscal year, the exempt status may be affected during the entire period the pay is reduced. 

 

Eligibility/Participation

  • Mandatory furlough programs must be (1) inclusive of all employees in an agency or within a designated department or program regardless of source of funds or place of work, including all classified and unclassified employees in the designated area; or (2) based upon pay band for classified employees and upon pay rate for unclassified employees within the agency or designated department respectively.  Agency heads, with the exception of constitutional officers, must be included in the mandatory furlough. Based on the eligibility criteria set by the agency, temporary, time-limited project, and temporary grant employees must be included.

  • State agencies, excluding institutions of higher learning and technical colleges, may exempt law enforcement employees and correctional employees from participation in a mandatory furlough program if the state agency would incur costs for overtime under the federal Fair Labor Standards Act. In addition, employees who provide direct patient or client care and front line employees who deliver direct customer services may be exempted from a mandatory furlough. The agency will have the discretion to define who constitutes a front-line employee. 

  • An agency head may institute a mandatory furlough for not more than ten (10) working days in the fiscal year of the deficit. 

  • A mandatory furlough may be taken in full or partial day increments; however, an agency may establish guidelines that determine the smallest increments in which mandatory furlough may be taken by an employee. 

  • The United States Department of Labor Regulations (20 CFR 655.731) do not allow the wages of employee authorized for work through an H-1B visa to be reduced through a mandatory furlough. These employees can, however, participate in a voluntary furlough. 

  • In the event that an agency implements both a voluntary furlough program and a mandatory furlough program during the fiscal year, furlough days taken voluntarily must count toward furlough days required by the mandatory furlough. For example, if an employee takes three days under an agency's voluntary furlough program and later in the fiscal year the agency requires employees to take five days under a mandatory furlough program, the employee would only be required to take two mandatory furlough days. 

  • DSHR encourages agencies to research any restrictions on federal or other funds associated with positions before implementing a furlough. In some instances, federal laws associated with funding for certain programs may prohibit employees from participating in mandatory furlough. In those situations if a position is only partially federally funded, the mandatory furlough may be prorated. 

 

Benefits

  • During a mandatory furlough, State employees are entitled to participate in the same state benefits as otherwise available to them except for receiving their salaries. As to those benefits which require employer and employee contributions, State agencies, institutions and departments will be responsible for making both employer and employee contributions if coverage would otherwise be interrupted; and as to those benefits which require only employee contributions, the employee will be responsible for making those contributions. 

  • An employee may be eligible for unemployment benefits with the South Carolina Department of Employment and Workforce while on a mandatory furlough. Employees should contact the South Carolina Department of Employment and Workforce for further details or information on unemployment insurance. 

  • An employee will continue to accrue annual and sick leave while on mandatory furlough. 

  • If a holiday falls during the mandatory furlough period, employees are paid for the holiday. 

  • An employee's performance review date will not be adjusted during a period of mandatory furlough.

  • A mandatory furlough does not affect an employee's State service date or continuous service date. 

  • Individuals affected by a mandatory furlough do not have grievance or appeal rights under the State Employee Grievance Procedure Act. 

 

 

Reporting

  • An agency must report the following information on employees who participate in the mandatory furlough to the Division of State Human Resources prior to September 1st of the following fiscal year:

  • Total number of employees who participated in the mandatory furlough program

  • Total number of mandatory furlough days

  • Estimated cost savings associated with the mandatory furlough program 

 

Mandatory Furlough Programs (Higher Education Institutions)

  • An institution of higher learning may institute an agency-wide employee furlough program for not more than twenty (20) working days in the fiscal year. 

  • The State Board for Technical and Comprehensive Education, through policy and procedure for the Technical College System, may institute employee furlough programs of not more than twenty (20) working days in the fiscal year in which the deficit is projected to occur. Once the State Board for Technical and Comprehensive Education develops a policy, an individual technical college may implement a mandatory employee program based on this policy.

 

Voluntary Furlough

 

References

 

Topics

 

Implementation

  • The agency head will determine whether to implement a voluntary furlough program.
  • The agency and participating employee must mutually agree upon when the voluntary furlough days will be taken.

 

Eligibility/Participation

  • Employees in FTE positions, time limited positions, and temporary grant positions are eligible to participate in a voluntary furlough.

  • An employee may voluntarily furlough up to 90 work days per fiscal year.

  • A voluntary furlough may be taken in full or partial day increments; however, an agency may establish guidelines that determine the smallest increments in which the voluntary furlough may be taken by an employee.

  • S.C. Code Section 41-10-30 requires that an employee have notice of any changes in wages and hours in writing at least seven (7) days before the effective date of the change; therefore, the agency should make sure that seven (7) days have passed between notification of the furlough program and the payroll effective date of any salary reductions.

  • Furlough days taken under a voluntary furlough program must be counted towards furlough days required through a mandatory furlough program.  For example, if an employee takes three (3) days under an agency's voluntary furlough program and later in the fiscal year the agency requires employees to take five (5) furlough days through a mandatory furlough program, the agency may require that the employee only take two mandatory furlough days. If the mandatory furlough is implemented under S.C. Code Section 8-11-192, voluntary furlough days must be counted toward the furlough days required by a mandatory furlough. 

  • DSHR encourages agencies to research any restrictions on federal or other funds associated with positions before implementing a furlough. In some instances, federal laws associated with funding for certain programs may prohibit employees from participating in voluntary furlough. In those situations if a position is only partially federally funded, the voluntary furlough may be prorated. 

 

Benefits

  • During a voluntary furlough, State employees are entitled to participate in the same state benefits as otherwise available to them except for receiving a salary. Benefits which require employer and employee contributions, State agencies, institutions and departments will be responsible for making both employer and employee contributions if coverage would otherwise be interrupted. Benefits which require only employee contributions, the employee will be responsible for making those contributions.

  • An employee may be eligible for unemployment benefits with the South Carolina Department of Employment and Workforce while on a voluntary furlough. Employees should contact the South Carolina Department of Employment and Workforce (http://www.dew.sc.gov/) for further information.

  • An employee will continue to accrue annual and sick leave while on voluntary furlough.

  • If a holiday falls during the voluntary furlough period, the employee is paid for the holiday.

  • An employee's performance review date will not be adjusted during a period of voluntary furlough.

  • A voluntary furlough does not affect an employee's State service date or continuous service date.

  • Individuals affected by a voluntary furlough do not have grievance or appeal rights under the State Employee Grievance Procedure Act. 

 

 

Reporting

  • DSHR may request an agency to report the following information on employees who participate in a voluntary furlough to the Division of State Human Resources (DSHR) prior to August 15 of the following fiscal year:

  • Total number of employees who participated in the voluntary furlough program; and

  • Total number of voluntary furlough days taken by agency employees.

  • Estimated cost savings associated with the voluntary furlough program.

  • An agency should maintain internal documentation regarding an employee participating in a voluntary furlough program for recordkeeping purposes, including a written request by employees to participate in the program.

 

 

Retirement Incentive Plan (RIP)

The retirement incentive plan allows agencies to purchase service credit on behalf of employees who are currently eligible to retire or purchase the amount of time necessary to make employees eligible to retire. The retirement incentive plan allows agencies to purchase service credit under the South Carolina Retirement Systems (SCRS) or the Police Officers Retirement Systems (PORS) in accordance with S.C. Code Sections 9-1-1140 (I) and 9-11-50 (I).

 

References

 

Topics

 

Implementation

  • An agency must develop its Retirement Incentive Plan (RIP) based upon the established guidelines. All components of the established guidelines serve as the minimum requirements for an agency's RIP.  A sample plan is available through the DSHR website to assist agencies in developing a RIP.
  • When an agency is consulting with the Division of State Human Resources (DSHR) to implement the RIP, it should submit the following information to DSHR for approval:
  • The RIP the agency intends to distribute to employees;
  • The RIP Agreement and Release;
  • A demonstration of recurring cost savings over two fiscal years (The demonstration of cost savings can be an estimate based on total salaries and fringe benefits of the estimated number of participants, RIP costs, and other expenditures or savings related to the RIP); and
  • The acknowledgement of Notice.

 

Participation Eligibility

  • According to the established guidelines, the following employees are eligible to participate in a RIP:
  • Employees in full-time equivalent (FTE) positions who are currently eligible to retire under the SC Retirement Systems (SCRS) or the Police Officers Retirement Systems (PORS), or
  • Employees who purchase enough service credit to become eligible to retire.
  • The guidelines exclude employees who are currently participating in the TERI Program, re-hired State retirees and employees exempt from the State Employee Grievance Procedure Act.
  • In accordance with RIP guidelines, agency heads make the final decision concerning which employees are provided the option to participate.
  • An employee’s participation in the RIP is voluntary.

 

Reemployment After RIP

  • A participating employee cannot be reemployed into an FTE position with the agency for two years from the date of separation after participating in the agency's RIP.

  • A participating employee may be reemployed with another agency into an FTE position after a period of not less than 15 calendar days from the date of separation.

  • A participating employee may be reemployed into a temporary, temporary grant, or a time-limited project position after a period of no less than 15 calendar days from the date of separation.

 

 

Incentives

  • An agency may purchase for an employee “qualified” or “non-qualified” service credit from the South Carolina State Retirement System (SCRS) at a cost not to exceed the employee’s annual salary.

  • An agency may allow in its RIP for the conversion of SCRS service credit to PORS service credit. An agency may only pay the cost to convert up to five years of SCRS earned service credit to PORS service credit. The cost of conversion may not exceed the employee's annual salary.

  • Upon separation a participating employee will receive payment for any unused annual leave balance as provided for in the State Human Resources Regulations. Upon retirement from State Government, an employee is eligible to receive service credit for up to 90 days of unused sick leave; however, any remaining unused sick leave will be forfeited.

 

Consideration to Participate

  • In accordance with the Age Discrimination in Employment Act and the Older Workers' Benefit Protection Act, an employee must be offered 45 calendar days from the date the employee receives notification of the RIP to consider participation.  An individual employee may waive the 45-day period.

  • In accordance with the Age Discrimination in Employment Act and the Older Workers' Benefit Protection Act, an employee has seven calendar days from the date of executing the agreement and release to rescind the decision to participate. An individual employee may not waive the seven-day period.

 

FTE Deletion

  • The agency is not required to delete the FTE position after it has been vacated by an employee participating in the RIP.
     

Cost Savings Demonstration and Reporting Requirement

  • The agency must be able to demonstrate an overall cost savings within two fiscal years beginning with the fiscal year in which the RIP was implemented.

  • DSHR has provided the Retirement Incentive Plan Reporting Forms to assist an agency in providing the necessary information to demonstrate cost savings. The forms are available on the DSHR website.

  • After an agency implements the RIP, the agency is required to report the results of the RIP to DSHR following the effective date of implementation. DSHR has provided two forms to assist an agency in reporting the required information.

 

Grievance Rights

  • Exclusion from participation in the agency's RIP is not a grievable or appealable action. Agency heads make the final decision based on fair and objective criteria concerning which employees are eligible to participate in the RIP.

 

 

Voluntary Separation Program (VSP)

The purpose of the voluntary separation program is to allow agencies to implement a program to realign resources and/or permanently downsize based on the ability to demonstrate recurring cost savings. Program approval will be based on the agency head's ability to demonstrate cost savings within a two fiscal year period.

 

References

 

Topics

 

Implementation

  • An agency must develop its VSP based on the established guidelines. Except where designated as an "optional" feature, all components of the established guidelines serve as the minimum requirements for the agency's VSP. A sample program is available through the DSHR website to assist agencies in developing a VSP.

  • When an agency is consulting with DSHR to implement the VSP, it should submit the following information to DSHR:

  • The VSP the agency intends to distribute to employees, and

  • A demonstration of recurring cost savings over two fiscal years. (The demonstration of cost savings can be an estimate based on total salaries and fringe benefits of the estimated number of participants, VSP costs, and other expenditures or savings related to the program.)

  • Optional documentation that DSHR strongly encourages agencies to include is: VSP Agreement and Release and Acknowledgement of Notice.

 

 

Participation Eligibility

  • According to the established guidelines, employees in full-time equivalent (FTE) positions are eligible to participate in the VSP.

  • The Agency Director, current TERI participants, and all employees who are exempt from the State Employee Grievance Procedure Act are not eligible to participate in the VSP.

  • Employees who have submitted a notice of resignation, which has been accepted by the agency, prior to the effective date of the VSP, and employees who participate in the Retirement Incentive Plan are not eligible to participate in the VSP.

  • Agency heads make the final decision concerning which employees are eligible to participate.

  • The agency cannot require an employee to participate in the VSP. Participation in the VSP is voluntary.

 

Reemployment After VSP

  • A participating employee in a VSP cannot return to an FTE position for two years from the date of separation unless the employee reimburses the agency from which the employee separated on a pro-rata basis for the benefits received.

  • A participating employee can return to his the former agency or another agency in State Government in a temporary, temporary grant, or time-limited project position. 

 

Incentives

  • The maximum incentive payment an employee can receive if participating in the VSP may not exceed one year of the employee's base salary.

  • Upon separation, an employee participating in the VSP will receive payment for any unused annual leave balance as provided in the State Human Resources Regulations. Upon separation other than by retirement from State Government, an employee forfeits all unused sick leave.

  • The agency is not required to include the Employer portion of health and dental benefits in the VSP.  However, providing benefits such as the employer contribution of health and dental benefits for one year is an option, unless the employee otherwise becomes ineligible for such benefits.

 

Consideration to Participate

  • In accordance with the Age Discrimination in Employment Act and the Older Workers' Benefit Protection Act, an employee must be offered 45 calendar days from the date the employee receives notification of the VSP to consider participation. An individual employee may waive the 45-day period.

  • In accordance with the Age Discrimination in Employment Act and the Older Workers' Benefit Protection Act, an employee has seven calendar days from the date of executing the agreement and release to rescind the decision to participate. An individual employee may not waive the seven-day period.

 

FTE Deletion

  • The agency is not required to delete an FTE position after it has been vacated by an employee participating in the VSP.

 

 

Savings Demonstration and Reporting Requirement

  • The agency must be able to demonstrate an overall cost savings within two fiscal years.

  • Voluntary Separation Program Reporting Forms to assist an agency in providing the necessary information to demonstrate cost savings are available on the DSHR website.

  • After an agency implements the VSP it is required to report the results to the DSHR following the effective date of implementation. DSHR has provided two forms to assist an agency in reporting the required information.

 

Grievance Rights

  • Exclusion of an employee or employees in categories of a job classification from participation in the agency's VSP is not a grievable or appealable action. The agency head makes the final decision based on fair and objective criteria concerning which employees are eligible to participate in the VSP.

 

 

THE LANGUAGE USED IN THIS DOCUMENT DOES NOT CREATE AN EMPLOYMENT CONTRACT BETWEEN THE EMPLOYEE AND THE AGENCY. THIS DOCUMENT DOES NOT CREATE ANY CONTRACTUAL RIGHTS OR ENTITLEMENTS. THE AGENCY RESERVES THE RIGHT TO REVISE THE CONTENT OF THIS DOCUMENT, IN WHOLE OR IN PART. NO PROMISES OR ASSURANCES, WHETHER WRITTEN OR ORAL, WHICH ARE CONTRARY TO OR INCONSISTENT WITH THE TERMS OF THIS PARAGRAPH CREATE ANY CONTRACT OF EMPLOYMENT.