This past Monday, the Gannett Company, the parent company of The Des Moines Register, announced that its employees would experience another round of week-long furloughs and hinted that additional furloughs could follow. Gannett says the moves are necessary to avoid additional layoffs.
Gannett also announced that all employees making over $90,000.00 will have to take a two-week furlough, and all salaries at the Register and Iowa City Press-Citizen will be frozen. Gannett isn’t alone; other newspaper companies, like Iowa-based Lee Newspapers, are dealing with declining revenues which has led to layoffs and furloughs for existing workers.
Furloughs are not just confined to the newspaper industry. Some state agencies have furloughed their employees. The Iowa Judicial Branch, which has already furloughed their employees two days this year, has planned additional furlough days for April 10th, April 24th, May 8th, May 22nd, June 5th, and June 19th.
It is interesting to see the different approach to the use of furloughs. The Judicial Branch is using periodic, individual days to limit the down time for the court system, which cause the court system to be shut down for one or two days per month. The newspaper industry is using week long furloughs and staggering their employees so that they are not shut down over a week-long period.
The two different approaches led The Iowa Republican to look around and see if there were other advantages to week-long furloughs over the more periodic approach. After a call to the Iowa Workforce Development office, we learned that companies like Gannett that require week-long furloughs make it possible for their workers to draw unemployment benefits.
The Workforce Development officer said all the employees needs to do is submit their unemployment claim with Iowa Workforce Development on the first day of their furlough and then call in to the Workforce Development weekly earnings hotline and report that they had no earning for the week. They will then receive one week of unemployment benefits.
Judicial Branch workers who will go without eight days of pay this spring are not as fortunate. Workers who are furloughed on periodic days cannot claim unemployment benefits since they still earn a wage during the week of their furlough.
The Gannett Company isn’t doing anything illegal, but when more and more Iowans are losing their jobs, it’s distasteful for their employees, who still have jobs, to drain funds from the unemployment system. The unemployment system is funded by Iowa businesses who pay taxes into the Iowa Unemployment Compensation Trust Fund, and Workforce Development then makes payments to eligible jobless workers.
The key word is “jobless.” There is no doubt that these furloughs are difficult for the workers and the families of those who are required to take them, but they should be thankful they have a job. By using week-long furloughs, Gannett is using the unemployment system to essentially help cover the cost of paying their workforce.
Making matters worse, Gannett recently paid its five NEOs (named executive officers) nearly $2 million in cash bonuses. So while their employees are on furlough and likely drawing unemployment benefits, Gannett CEO Craig Dubow is enjoying an $875,000.00 bonus.
There has been ample discussion about the outrageous bonuses AIG paid its workers. Many editorial boards from various newspapers have criticized AIG for paying outlandish bonuses when the company is in the tank. Yet, the newspaper industry is guilty of the same sin, paying six figure bonuses when the company is forcing its employees to take an unpaid week of work. And, just like AIG, Gannett is cheating the system at the cost of the taxpayer.
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