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You've been furloughed — do you have a job or not? We answer all your questions.
In light of the novel coronavirus crisis and economic conditions, many employees are finding themselves in an entirely new situation: They're being furloughed.
Furlough is not a common situation for most private sector employees; historically, the concept of furlough would commonly come into public view when the federal government didn't authorize budgets. Lacking funds available to pay employees, government workers found themselves furloughed until a budget was passed.
Now, with COVID-19 forcing many states to adopt shelter-in-place orders and throwing the entire economy into disarray, employees at companies such as Macy's, Gap, Cheesecake Factory, L Brands, Marriott, and Hyatt all find themselves in this difficult position.
In this article, we dive into what furlough is, what your rights are as a furloughed employee, and what you might do next after being furloughed.
What is furlough?
Furlough is a mandatory and temporary pause on employment; you can think of it like a leave of absence from work.
When you are furloughed, you do retain your job. After a given period of time or when a certain condition is met, your job will resume again with the expectation that you will pick up right where you left off. It's not meant to be a long-term measure.
Do you get paid during a furlough?
You do not get paid during a furlough period and are strictly prohibited from completing any work for your employer. If an hourly worker works during furlough, they are entitled to those wages, and if a salaried employee works they are entitled to the entire day of compensation.
Why do companies furlough?
Companies furlough in order to conserve cash while also minimizing future costs associated with both laying off and firing workers. As such, a furlough is considered a type of cyclical unemployment that occurs when a company can no longer afford to remain solvent and continue to pay its workers. Sometimes workers are furloughed during seasonal downturns.
“Unlike layoffs, furloughs reduce labor costs without adding new costs such as severance packages and outplacement services,” Jie Feng, an assistant professor in the Rutgers School of Management and Labor Relations, told the Society for Human Resource Management.
Is furlough the same as a layoff?
Furlough is not the same thing as a layoff — it's an alternative to one. Furlough is mandatory and temporary unpaid leave from a job you still get to keep, while a layoff is a full separation from the company, meaning you no longer have a job.
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Because you keep your job when you are furloughed, this also means that in most cases, you do retain your benefits, such as health insurance and life insurance. Furloughed employees can come and go seamlessly, while there are labor laws, time cost, and financial costs to laying off and rehiring furlough employees.
Can you collect unemployment if you are on furlough?
Under most circumstances, you can collect unemployment benefits when you are furloughed.
Unemployment in the United States is administered on the state level — not the federal level — and each state has its own set of rules and regulations pertaining to unemployment. Some states do require proof of an active job search in order to collect benefits. You can use the United States Department of Labor's CareerOneStop service to learn more about the benefits and conditions of your state's unemployment program.
Can I get a new job if I am furloughed?
You can seek a new position if you find yourself furloughed at your current job. You are free to leave your job at-will at any time.
However, temporary positions or gig work may find you ineligible for continuation of your furlough if your employer already prohibits second jobs or outside employment. You are still technically that company's employee, and they are free to continue enforcing those policies. Make sure to read your individual contract with your company carefully to understand what is and isn't allowed.
What should I do if I get furloughed?
File for unemployment right away
If you are eligible for unemployment benefits within your state, you'll want to register as soon as possible to make sure you are able to claim the maximum benefits.
Take care of your well-being
The advice given in our article “You've Been Fired. What Now?” applies here. Make sure to take care of yourself; your emotional and physical well-being are important and will keep you in the best position to handle the difficult days ahead.
Focus on self-improvement
When you're furloughed, it's a great time to improve your personal brand, learn a new professional skill, and create and update your LinkedIn profile and resume.
Depending on the expected length of your furlough, it may be a good time for you to consider a career change. A silver lining of this unplanned time off is that you now have the ability to explore new passions, build new skills, and pursue new opportunities.
You're not alone on your job-search journey — let us help. Let our free and confidential resume review get you started on the right foot.