The Ohio General Assembly has made critical amendments to R.C. 124.393, the statute which authorizes an appointing authority to implement mandatory cost savings programs in the event of a fiscal emergency. The amendments were included in Senate Bill 310, which was a bill mainly authorizing the distribution of $350 million in federal funds under the CARES act.
By way of background, R.C. 124.393 permits a county, township or municipal corporation in Ohio to implement mandatory cost savings programs involving the furlough of all permanent full-time or part-time employees who are not subject to a collective bargaining agreement. A “fiscal emergency” permitting the implementation of a cost savings program is defined as a fiscal emergency declared by the governor of Ohio, a fiscal watch declared under R.C. 118.023 or R.C. 118.04, or lack of funds or reasons of economy as described in R.C. 124.321. The public entity must issue guidelines concerning how the appointing authority will implement the program. The statute also authorizes the program to be administered differently among employees based on their classifications, appointment categories, or other relevant distinctions. The implementation of the program is not subject to appeal before the State Personnel Board of Review (SPBR). The decision to implement a cost savings program must be made by the appointing authority before the plan is implemented. Critically, employee furloughs under the plan cannot exceed eighty (80) hours.
The amendments to R.C. 124.393 now authorize a county, township, or municipal corporation in Ohio to implement this same cost savings program in the event of a fiscal emergency and also a lack of work as defined in R.C. 124.321 due to COVID-19. The employee furloughs under the program cannot exceed one hundred sixty (160) hours. This is in addition to the eighty (80) hours authorized under the original statute, meaning that a cost savings program implemented due to a fiscal emergency or lack of work due to COVID-19 may total two hundred forty (240) hours.
There are several considerations which a public entity must take into account prior to implementing a cost savings program. This includes the plan’s relations to other laws like the Fair Labor Standards Act, Family Medical Leave Act, and employee eligibility for unemployment benefits. Employers are strongly encouraged to contact legal counsel before implementing a mandatory cost savings program.
The attorneys at Fishel Downey Albrecht & Riepenhoff, LLP regularly work with public employers on a wide range of employment issues. If you have any questions about this or any other matter, please contact us at info@fisheldowney.com or call 614-221-1216.