Furlough vs. Layoff: Are You Eligible for Benefits and Unemployment?


The coronavirus pandemic is threatening more than just our health — it’s also threatening the livelihood of many Americans.

With many states imposing stay-at-home orders, businesses have been shuttering and companies have been forced to furlough or lay off millions of employees to stay afloat.

Disney and Best Buy recently began the furloughing process, Uber slashed 3,700 jobs, and NBCUniversal announced pay cuts for most full-time employees and furloughs for all of its part-time workers.

During these unprecedented times, it’s important to understand the difference between being furloughed and being laid off.

What's the Difference Between Being Furloughed and Being Laid Off?

To be furloughed means to be temporarily laid off from work. Many employees who have been placed on an “indefinite furlough” may be offered the option to return to their job once the crisis eases and the economy begins opening back up. Employers may choose to furlough because it’s costly to fire and hire new employees.

A layoff is more permanent as it means you have been dismissed or let go from your job. This usually happens through no fault of the employee but because a company can no longer pay the employee for a variety of reasons including economic ones.

Since the outbreak began in mid-March, 33 million Americans have filed for unemployment after being furloughed or laid off, per CNBC.

If you found yourself out of a job because of the pandemic, you likely have questions about what it all means and what will happen next.

Can You Get Your Job Back If You’ve Been Furloughed?

Mark Zandi, chief economist of Moody's Analytics told Fortune that while some furloughed workers may be rehired back when things return to normal, that isn’t going to be the case for everyone.

Each company will approach rehiring differently based on demand since there is no policy in place for when furloughs will end.

However, being furloughed means you stand a greater chance of returning to your job, per MarketWatch.

What Benefits Are You Eligible For?

This also varies by company and employer. Throughout the pandemic, many companies are offering laid-off workers extended severance and healthcare benefits to help them get back on their feet as finding a job in the current market is tough.

Employees who have been furloughed will not get a paycheck, but they do get to keep their benefits. Fortune added that many companies such as Macy's, Hilton, and Disney are still covering healthcare premiums for furloughed workers.

“The best part of a furlough vs. a layoff is you have a chance to continue your health benefits,” Keith Hall, a Georgetown professor who served as commissioner of the Bureau of Labor Statistics during the Great Recession told MarketWatch.

Who Is Eligible for Unemployment?

Full-time and part-time workers who have been furloughed, laid off, or had hours cut because of the pandemic are eligible under the new federal unemployment benefit, which finds the federal government adding $600 a week to the regular unemployment benefits until July 31 as part of the recently passed $2.2 trillion stimulus bill.

This means that some employees could be making more during unemployment than they would have in their job.

How Can You Land a New Job?

Roy Cohen, a New York–based career coach told Fortune that he anticipates new career opportunities will be available once the pandemic is over. He suggested using the time you are furloughed or laid off to prepare yourself by sprucing up your resume and adding a few new skills.

He also told the publication he believes companies won’t be so critical if they see “gaps” between jobs on your resume.

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