The Office of Personnel Management (OPM) has issued furlough policy guidance for federal workers in advance of possible severe funding reductions that would be caused by sequestration. 

Office of Management and Budget (OMB) officials have said that furloughs could be implemented if sequestration goes into effect.  Testifying before Congress in September, DoD Comptroller Bob Hale said sequestration could make it necessary for DoD to “impose a hiring freeze, consider unpaid furloughs, and take other actions.”

The new guidance describes “administrative furloughs” that are “designed to absorb reductions necessitated by downsizing, reduced funding, lack of work, or any other budget situation other than a lapse in appropriations.”  This type of furlough could be applied if employee furloughs are necessary because an agreement is not reached to avert automatic across-the-board cuts set to go into effect on January 2, 2013.  OPM considers this guidance a precautionary measure.

Under the OPM guidance, which is described in a series of questions and answers, agencies are required to identify those employees who are affected by administrative furloughs and set up a process for notifying them.

If during furlough periods a furloughed employee’s salary is not sufficient to pay health insurance (FEHB) premiums, health insurance will remain in force.  The furloughed employee’s share “will accumulate and be withheld from pay upon the employee’s pay becoming sufficient to cover premiums.

The guidance covers numerous other pay and employment-related situations and issues for employees on administrative furlough including: payment of unemployment compensation; leave and time off; injuries while on furlough; and federal employees serving military duty.