What Does It Mean To Be Furloughed From A Job

What Does It Mean to be Furloughed from a Job?

What is the difference between furloughs and layoffs, and can you file for unemployment benefits if you are furloughed from your job?

Updated on Jun 03 2020

A term that you have undoubtedly heard many times throughout the COVID-19 pandemic is “furlough” or “furloughed.” But, what does it really mean when workers are furloughed? Are you able to apply for unemployment benefits?

Is being furloughed and being laid off the same thing?

The answer to this is no. While it may seem like there are similarities between the two, they are two different concepts.

Layoffs are typically permanent separations of employment. It’s distinguished from termination of employment (the worker wasn’t fired), but the worker is not kept on the company's payroll. Layoffs can be temporary, but are more often permanent than not.

A furloughed employee is still an employee of the company that they were furloughed from. However, these employees are either not working and not getting paid or reducing their paid hours. Generally, furloughed employee’s retirement benefits, titles, and compensation are reinstated once the worker goes back to work. Keep in mind that health insurance coverage may or may not be covered during this time period—this depends on the company’s plan.

Why are companies choosing to furlough employees throughout the COVID-19 crisis?

When a company is going through what may be just a temporary economic setback, furloughs are a good option to keep their talent for the future. COVID-19 has brought about an unprecedented economic downturn, so many businesses are trying to stay afloat and weather the storm until it passes. Once shelter in place orders are lifted, the hope is that many companies will bounce back and need to have their employees working again.

Are furloughed workers eligible for unemployment benefits?

America has seen millions of Americans filing for unemployment insurance over the course of the COVID-19 pandemic. Though it varies state-by-state, many furloughed workers may apply and be eligible for unemployment benefits. If you were furloughed due to the coronavirus outbreak, you qualify for unemployment, per the stimulus package that was passed by the US government.

Furloughs are different from layoffs, but they can still cause uncertainty regarding your finances. A financial planner can help you through this crisis and determine your best course of action moving forward. In the meantime, it is recommended to take advantage of this unexpected time off. Keeping a schedule, staying productive, and learning a new hobby can help your outlook during this time of uncertainty.

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