One immediate reality for millions of workers called back from furloughs hasn’t gained much attention.
When the boss calls and says we want you back, many employees are facing a bill for deferred health care premiums that were paid by their employers while they weren’t getting a paycheck.
Neiman Marcus employees are among those who have been asked to pay their portion of health insurance premiums while they were on furlough. According to a letter sent to employees, Neiman Marcus employees have to reimburse the company for those deferred premiums “upon 60 days of return” to work.
Most companies don’t pay 100% of premiums and instead split premium costs with their workers. Workers furloughed in March and April and called back in August or September could be billed for a couple of thousand dollars for their share of the deferred premiums.
Furloughs have been a mixed bag for retail workers.
Department stores and other retailers that were considered nonessential and forced to temporarily close, such as apparel and accessories retailers, cut 2.4 million jobs by April from a U.S. retail workforce of 15.67 million in February.
Retailers mostly chose furloughs vs. layoffs so that they could quickly reopen stores and hire people back. That has happened at a rapid pace, but retail employment in August was still 600,000 jobs below pre-pandemic numbers.
Dallas-based Neiman Marcus furloughed most of its 14,000 employees April 5 and continued health care benefits after it filed for Chapter 11 bankruptcy protection on May 7. It didn’t reopen stores until mid-July and August.
The letter sent to employees also mentions that the company’s furloughed workers were told last spring that when they were called back, they would be asked to pay the deferred health care premiums.
“As we continue to navigate the unprecedented challenges the pandemic has created, we deeply regret any negative impact this has had on our associates," the company said in an email Tuesday. “We’re doing everything we can to protect the health of the business for our associates, our customers and our brand partners.”
Neiman Marcus also said it’s working with some employees to extend the repayment time if needed.
The luxury retailer exited bankruptcy last week and said it was beginning an undisclosed number of layoffs. About 2,000 employees were laid off during the bankruptcy from the permanent closings of Last Call and full-line Neiman Marcus stores.
J.C. Penney and Macy’s, which both started reopening stores in May, decided not to ask employees to pay the deferred premiums.
Dillard’s, which reopened all stores by June 2, waived insurance premiums for workers through July and has no plans to ask employees to reimburse the company, a spokeswoman for the company said.
There are no state mandates about health care insurance in Texas, including for furloughed employees, said Texas Department of Insurance spokesman Ben Gonzalez. “If there’s an accommodation between the employer and employee, it’s voluntary.”
Twitter: @MariaHalkias
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