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As the job market evolves, organizations must adapt to new realities. Consequently, furloughs and layoffs have become more prevalent. Although often used interchangeably, these terms have distinct meanings and implications for employees.
This article clarifies the differences between layoffs and furloughs, their definitions, and your rights as an employee in the event of a furlough.
Key Takeaways:
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A furlough is a temporary, unpaid leave from work, usually affecting large groups of employees simultaneously.
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A layoff occurs when an employee is terminated due to a lack of available work.
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While on furlough, you are permitted to seek new employment, provided it’s not with the furloughing employer.
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A furlough is a temporary measure, whereas a layoff is typically permanent.
Furlough vs. Layoff: Definitions
To better understand the differences, let’s explore the definitions of both terms:
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Furlough
A furlough is a temporary, unpaid leave from work that usually affects a significant number of employees at once. Organizations implement furloughs during uncertain times when it is unclear who among the workforce will be needed.
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Furloughs may arise from site closures, corporate restructuring, or periods of broad economic uncertainty.
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The duration of a furlough can vary, but employees typically expect to return to their positions afterward.
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While furloughed, employees generally retain their benefits, including health insurance, but must refrain from any work-related activities.
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Both public and private sectors may resort to furloughs as a cost-saving strategy when layoffs are undesirable.
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Layoff
A layoff means that an employee’s position is eliminated, resulting in their termination. Unlike being fired due to performance issues, layoffs occur when work is no longer available.
Occasionally, employers may reach out to laid-off employees if positions reopen, but layoffs are often permanent. Financial difficulties or economic disruptions typically drive layoffs, serving as a quick way to cut costs.
Employers may offer severance packages to laid-off workers, but there is no obligation to do so. Such packages can help alleviate financial strain and may extend health insurance coverage until new employment is secured.
Key Differences Between Furloughs and Layoffs
If you’re facing a furlough, it’s natural to feel concerned about the potential for a layoff. However, several key differences exist:
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You can return to your job. Furloughs imply an expectation of returning to work, whereas layoffs do not.
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Benefits remain intact. Employees retain benefits during furloughs, including access to health and life insurance.
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Your employment rights are preserved. You cannot be terminated without due process while on furlough.
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Furloughs are administratively simpler. The process of laying off employees is more complex and costly than implementing a furlough.
Employers prefer furloughs as they indicate a desire to retain employees for future needs without the immediate financial burden associated with layoffs.
Furlough: The No Work Rule
The “no work rule” during furloughs can be alarming; however, it mainly applies to your current employer. This rule prohibits you from engaging in work-related activities for them, but it does not automatically prevent you from seeking other opportunities.
Employers enforce this rule strictly since working while furloughed obligates them to compensate you. Furloughed employees may have access to work-related accounts revoked to avoid triggering payment obligations.
Employee Rights During a Furlough
Feeling uncertain about not working is understandable, but furloughed employees have the right to seek new employment. Your employer assumes the risk that you might find a job elsewhere during your furlough.
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Many furloughed employees consider temporary positions to alleviate financial strain. However, be sure to review your employer’s policies on outside employment before pursuing this option.
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If you are a public employee, the Office of Personnel Management maintains that rules regarding outside employment apply even during furloughs.
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Consider applying for unemployment benefits while furloughed to support your finances.
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Unemployment benefits are managed at the state level and remain available even during federal furloughs. Research your state’s guidelines, as eligibility criteria vary.
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Understand that not all employees qualify for unemployment benefits due to state-specific rules, including waiting periods and active job search requirements.
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Regardless, exploring your state’s unemployment rules is a prudent step to maintain financial stability during this challenging time.
Understanding Furloughs in Today’s Economy
If you’re furloughed and concerned about your job prospects, there are several factors to consider. Whether searching for new employment or applying for unemployment, various resources are available to assist you.
Many states have adjusted unemployment services to accommodate the ongoing economic climate. Check your state’s unemployment website for updates on available support.
The rise of remote work opportunities may provide additional income during your furlough, provided your company permits it.
For federal employees, Congress has a history of compensating all workers during furloughs. It’s essential to stay informed about potential congressional actions regarding your compensation.
Furlough Frequently Asked Questions
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Do you get paid during a furlough?
No, you do not receive pay during a furlough. However, your employee benefits, such as health insurance, remain active. You may also qualify for unemployment insurance benefits; check with your state unemployment office for details.
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What is the difference between a layoff and a furlough?
The key difference is that a layoff is permanent while a furlough is intended to be temporary. Although some furloughs may eventually lead to layoffs, the expectation is to return to the same job.
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Why would a company choose to furlough instead of lay off?
Companies may opt for furloughs if they believe their financial challenges are temporary. Factors such as liquidity shortages or economic uncertainty can lead businesses to reassess their workforce needs.
Employers want to avoid layoffs, as they often involve significant costs, including severance packages. Furloughs provide a more sustainable solution during short-term difficulties.
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Can I look for a job while furloughed?
Yes, you can seek other employment while furloughed. Although your employer may restrict you from working for competitors, they generally understand the need to find income during this time. Be aware that taking temporary work might impact your unemployment benefits.
Final Thoughts
Experiencing a furlough can be challenging, especially when it impacts your financial stability.
Stay calm.
By researching your options and creating a plan, you can navigate the uncertainties of furloughs effectively and emerge on the other side.
Author
Jack Flynn is a writer for Zippia. In his professional career he’s written over 100 research papers, articles and blog posts. Some of his most popular published works include his writing about economic terms and research into job classifications. Jack received his BS from Hampshire College.
