What's The Difference Between Being Laid Off And Being Furloughed?
As the coronavirus pandemic continues to stall business operations in the U.S., employers are turning to furloughs and layoffs to stay in business. Last week alone, major retailers such Macy’s, Gap and Kohl’s furloughed hundreds of thousands of workers while closing stores. More than 10 million people applied for unemployment benefits in the month of March, according to the Department of Labor.
Whether you are furloughed or laid off, the fact of the matter remains: You are not getting paid by your employer.
But these two employment actions have different effects on your relationship to your employer. Here are answers to some of the biggest layoff and furlough questions:
What does being furloughed from a job mean?
When you are laid off from your job, your relationship to your employer is terminated, and you are no longer on the payroll. When you are furloughed, your relationship to your employer continues, just without you getting paid.
“A furlough is a mandatory, temporary unpaid leave. In the corporate world, it is usually implemented by companies facing financial setbacks or dramatic changes in customer demands, market share and company structure,” said Jie Feng, an assistant professor at Rutgers University’s School of Management and Labor Relations. “Some furloughs are seasonal due to the nature of the position or business ― for example, some jobs in the hotel industry ― but other furloughs are the result of a temporary emergency measure, such as we’re seeing now.“
One reason employers choose furloughs over layoffs is the administrative work layoffs require. “Because they’re not terminating employees, there’s no payouts of vacation time that might be required under state law or no notification requirements required by state law,” said Amber Clayton, the knowledge center director at the Society for Human Resource Management. “With a furlough, you’re keeping everyone on the payroll. Nothing is changed other than everyone...
