What Is a Furlough and How Does It Affect Employees?

What you’ll discover:

What exactly is a furlough?
Can I work if I’ve been furloughed?
What is the difference between a furlough and a layoff?
How long may a corporation keep an employee on leave?
Do furloughed workers retain their health-care benefits?
Can an employee who has been furloughed get unemployment benefits?
The COVID-19 Relief Bill and furloughed workers in December 2020

Because of the Coronavirus epidemic that has swept the United States, several local and state governments have ordered the closure of non-essential enterprises. As a result, firms have been obliged to decrease their personnel. An employer may achieve this in a variety of ways, one of which is to furlough staff. If you have just been furloughed, it is in your best interests to understand what this implies for you as an employee.

What exactly is a furlough?

A furlough is a required, though temporary, leave from work. During a furlough, an employee is not paid but is expected to return to work at some time. Furloughs may happen in either the public or private sectors.

Can I work if I’ve been furloughed?

When an employee is furloughed, a rigorous No Work Rule applies. It indicates the employee is unable to do any job for the business. Making a single phone conversation or responding to a single email on behalf of an employer is a breach of the No Work Rule and necessitates payment to the employee. If the employee is salaried, the company is required to pay the employee’s salary for the whole week if the employee works at all throughout the week. As a result of the No Work Rule, an employer may withdraw a furloughed employee’s access to work accounts, even if the person is expected to return to work.

What is the difference between a furlough and a layoff?

When an organization encounters a slowdown or has to minimize expenses, one option is to reduce the staff. Employees may be laid off or furloughed to achieve this. While they are comparable, there are several key distinctions between being laid off and being furloughed, including:

If you are laid off, you will not be assigned a return to work date, nor will you have a high expectation of being called back. A furloughed employee, on the other hand, normally expects to return to work and is often given a definite return to work date or a specified condition that will cause the furlough to terminate.
A laid-off employee often loses his or her benefits, while a furloughed employee does.
Furloughing workers is more simpler for a company than laying off people since a lay off takes a substantial amount of paperwork, but a furlough just requires notification to the affected employees.

How long may a corporation keep an employee on leave?

When furloughing workers, an employer will often specify a specific return to work date or explain what must occur for the furlough to be removed; nevertheless, a furlough might be for an extended amount of time. For example, when Congress fails to enact financing legislation in time to keep the government functioning, federal workers are routinely furloughed. When this occurs, affected government agencies will furlough staff with the understanding that once the required funds is in place, the employees will return to work. In the private sector, a corporation may plan a furlough for a certain length of time during the slow season, with the assumption that workers would return to work at the conclusion of the period.

Do furloughed workers retain their health-care benefits?

One of the most significant differences between a furlough and a layoff or outright termination for an employee is that a furloughed employee keeps his or her benefits, including health and life insurance. This is because a furloughed employee is anticipated to return to work at some time, but a laid-off person is not expected to return to work.

Can an employee who has been furloughed get unemployment benefits?

Your state of residence determines your eligibility for unemployment benefits; but, as a general rule, you should be qualified for unemployment benefits as a furloughed employee. When filing for unemployment benefits, the determining factor is not whether you are working, but if you earned anything in the preceding week. One advantage of being furloughed rather being laid off is that you may not be obliged to demonstrate that you are seeking for work while getting unemployment benefits. In such situation, the fact that you are legally still working as a furloughed employee but are not getting paid may work in your favor.

The COVID-19 Relief Bill and furloughed workers in December 2020

On December 27, President Barack Obama signed a second bipartisan measure aimed at mitigating the financial damage caused by the coronavirus. This second COVID Relief Bill provides eligible individuals with an additional $600 one-time payment, an additional $300 per week in unemployment benefits for eleven weeks, extends unemployment benefits to gig workers and independent contractors, and provides additional funding for the PPP loan program with a focus on small businesses.

Furloughed airline workers would benefit from this law, as airlines seek to postpone or reinstate furloughs in order to gain $15 billion in payroll assistance as a consequence of the COVID relief package.