Furlough vs. layoff — I’m confused!

posted in: COVID-19 | 0

Q: I have been furloughed recently, because my company has been hurt by this pandemic.  What is the difference between a furlough and a layoff?  Should I be looking for a new job?  My manager is not even sure what the difference is between a furlough and a layoff.  Can you help me understand?

A: I am sorry that you have been furloughed.  Many companies are being negatively impacted by the COVID-19 pandemic.

I have to make a few assumptions.  I am assuming that you are an at-will employee, which applies to about 85% to 90% of US employees.

A furlough is different than a layoff.  A furlough is a temporary situation in most cases.  There is an expectation that the business will ask you to return to your role (or a similar role).  No one can promise that, but that is the hope and the expectation.  A layoff is typically a more permanent decision.  A layoff signals that an employee should assume that they are being separated, though some employees may be re-hired.

One major difference is your status as an employee.  Furloughed employees are still employed by the company.  A furloughed employee usually remains on the company’s payroll, though the employee may be moved to an unpaid status.  Additionally, furloughed employees are typically retained on a company’s benefits plans.

With both a furlough and a layoff, the individual can apply for unemployment benefits.  With both a furlough and a layoff, you can consider other opportunities with other companies.  If you do decide to pursue and accept another role with another company, you should still let your current employer know that you are accepting employment at another company (if you have been furloughed).  If you should accept another role with a new company, most companies request that you notify them in writing.  You should then be paid your unused but accrued vacation time or PTO.

One other difference between a furlough and a layoff is the payout of PTO or vacation time.  With a layoff, that is considered a separation and all wages due should be paid out on the last day on the payroll.  This means that any unused but accrued PTO or vacation time should be paid out immediately.  With a furlough, the payout of this time is not required.  In most instances, a laid off employee should also receive information about benefits continuation.

If you were satisfied with your most recent role, you should remain in contact with your manager.  Some furloughed employees may seek employment elsewhere, which may open up opportunities at your current company.  If you were dissatisfied with your current company, this may be the nudge to pursue opportunities outside of your current employer.

Pattie Hunt Sinacole is a human resources expert and works for First Beacon Group in Hopkinton, an HR consulting firm. She contributes weekly to Boston.com Jobs and the Boston Sunday Globe Money & Careers section.

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