I wish I could tell you exactly what the heck went on at
this past week with the broker's furlough fiasco, but there was hardly a person in the office at Schwab on Friday to talk about it.
They were probably out on the company's inaugural "voluntary" vacation day.
First, a quick recap of the Schwab sitch:
On Thursday, Jan. 25, Schwab employees received an email saying that all except essential employees -- those who service customers -- were not to come to work on three upcoming Fridays: Feb. 2, Feb. 16 and March 2. They could take these days as vacation days or unpaid days, but either way, they were days away from work.
The idea was that Schwab would save money because of accounting rules. Employee vacation time reportedly accrues on the Schwab books as a liability. When people take vacation, it improves Schwab's numbers. (The move followed other cost-cutting efforts (some described
here ) out of the brokerage recently.)
Think of it this way: At your company, if you leave before the year is out, you might get paid for vacation time you've accrued but have not yet taken. The more vacation time you use, the less cost the company has to carry on its books.
The time-off tactic might have worked for Schwab, except it seems that while the firm's accounting department got it right, the legal department didn't. The approach raised some labor law issues. "There were legal complexities that we didn't take into consideration," says Schwab spokeswoman Jennifer Hallahan.
So Schwab issued a "take it back" email yesterday, saying employees could come to work. But the email urged them
. "If you want to take vacation or use a floating holiday, you will be joining us in cutting costs, deferring expenses and taking other steps that will keep our financial performance strong," the memo said.
The initial oversight happening at a typically well-oiled machine like Schwab is strange enough, but the follow-up pressure is disconcerting.
By making the time off "voluntary," Schwab put its staff in the awkward position of choosing between taking vacation when they want to -- maybe at a time that makes sense for their children's calendars or, say, a doctor's appointment -- or taking the time when the
wants them to.
Hallahan says there was no such pressure. "You're not betraying the company if you came into work today." (In her department, she was the only one of 14 spokespersons in the office Friday, and she said no executives were available to comment.)
Creative ways of saving money may help avoid layoffs -- an outcome in employees' general interest -- and even please Wall Street.
But when something is just not right, it's best to undo the wrong altogether.
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The Upshot is an occasional feature designed to bring readers the wit and wisdom of TheStreet.com's beat reporters. It's a section where writers will offer brief analytical insights on the companies they follow every day.