Get coupon code to unlock 10% off all package plans 🔥 at checkout when you sign up

What is Furlough: What Does it Mean & How Does It Work?

As seen in:

In the wake of economic uncertainty, many companies have turned to furloughs as a way to manage their workforce.

But what exactly is a furlough, and how does it work? If you’re unfamiliar with the term, you’re not alone.

Furloughs can be confusing, and the rules surrounding them can vary from company to company and from state to state.

In this article, we’ll explore the ins and outs of furloughs, including what they are, why companies use them, and what you can expect if you’re furloughed.

We’ll also answer some common questions about furloughs, like whether you get paid during a furlough and if you can collect unemployment benefits.

By the end of this post, you’ll have a better understanding of furloughs and how they can impact you as an employee.

So, let’s get started!

What is furlough?

Furlough is a temporary leave of absence from work that employers may require their employees to take during times of economic hardship or other situations where work is not available.

During a furlough, employees are typically not paid, but they are still considered to be employed by the company and maintain their benefits, such as health insurance and retirement contributions.

Furlough can be defined as a temporary, unpaid leave of absence from work that is initiated by the employer. The duration of a furlough can vary, ranging from a few days to several weeks or months, depending on the circumstances that led to the furlough.

There are different types of furloughs that companies may implement. Some of the most common types include partial furloughs, where employees work reduced hours or days, and full furloughs, where employees are completely off work for a period of time.

Furloughs can also be voluntary or mandatory, depending on the company’s policies and the employee’s willingness to take time off without pay.

Any employee can be furloughed, regardless of their position, tenure, or performance.

However, companies may have specific guidelines or criteria for selecting employees to furlough, such as seniority or job function.

Additionally, certain industries may be more prone to furloughs during times of economic downturn, such as hospitality, travel, and entertainment.

Find out: Personal Day: What Is It All About? Full Guide

Do you get paid during a furlough?

One of the most significant concerns for employees facing a furlough is whether they will continue to receive their regular pay.

The answer to this question depends on the type of furlough.

In an unpaid furlough, employees are typically not paid for the duration of the furlough. This means that they may need to find alternative sources of income or rely on savings to cover their expenses during this time.

On the other hand, in a paid furlough, employees continue to receive their regular pay and benefits, although there may be some reductions or changes to these benefits.

Employers may choose to implement a paid furlough as a way to reduce costs while still retaining their workforce.

It’s important to note that the rules and regulations around furlough pay can vary by location and industry. In some cases, governments may offer financial assistance to employers or employees during a furlough.

Employees should check with their employer and local authorities to understand their options and entitlements.

In addition to pay, employees may be entitled to other benefits during a furlough. For example, some employers may continue to provide health insurance or other benefits during a furlough period, while others may not.

It’s vital to clarify with your employer what benefits you may still be eligible for during a furlough.

In summary, whether you get paid during a furlough depends on the type of furlough and the policies of your employer. It’s vital to understand these policies and any applicable laws to ensure you’re prepared for a potential furlough.

Find out: What is Sabbatical Leave and How Can it Help Your Career?

Why do companies furlough?

Furloughs are often used as a cost-saving measure by companies during periods of economic downturn or financial instability.

By temporarily laying off employees, companies can reduce their payroll expenses without having to permanently let go of valuable staff members.

Some of the most common reasons for companies to implement furloughs include a decrease in demand for their products or services, unexpected expenses or losses, or disruptions in the supply chain.

In some cases, furloughs may also be used as a way for companies to adjust their workforce in response to changes in their business model or strategy. However, furloughs can have significant impacts on the company as well.

In addition to losing valuable staff members, furloughs can also result in decreased productivity, reduced employee morale, and disruptions to the company’s operations.

Therefore, companies typically only resort to furloughs when all other options have been exhausted.

In some cases, companies may also choose to offer alternative options to furloughs, such as reduced work hours, pay cuts, or unpaid leave. These options can help companies achieve cost savings while minimizing the negative impacts on their employees and operations.

Generally, furloughs are a challenging but sometimes necessary option for companies looking to weather difficult economic times.

While they can be a difficult experience for employees, it’s key to remember that furloughs are often temporary and can ultimately help companies remain financially stable and competitive in the long run.

Find out: How Long Should You Stay at a Job Before Quitting?

Is furlough the same as a layoff?

Furlough and layoff are two terms that are often used interchangeably, but they actually refer to two different employment actions.

Furlough is a temporary unpaid leave of absence from work, while a layoff is a termination of employment.

The main difference between furlough and layoff is that furloughed employees remain employed by the company and are expected to return to work after the furlough period ends.

In contrast, laid-off employees are no longer employed by the company and are not guaranteed a return to their job.

Furloughs are often used by companies during times of financial hardship, such as a decrease in demand for their products or services.

By furloughing employees, companies are able to reduce their labor costs without having to resort to layoffs.

Layoffs, on the other hand, are usually a last resort for companies facing financial difficulties. When a company lays off employees, it is usually an indication that the company is in serious financial trouble and cannot afford to continue paying those employees.

Both furloughs and layoffs can have a significant impact on employees, but furloughs can be less devastating than layoffs.

Furloughed employees can still maintain their benefits, such as health insurance, and they may be eligible for unemployment benefits during the furlough period.

Laid-off employees, on the other hand, often lose their benefits and may struggle to find new employment.

In summary, furlough and layoff are not the same thing. While both can have a significant impact on employees, furlough is a temporary unpaid leave of absence, while layoff is a termination of employment. It’s critical for employees to understand the difference between the two and how each can affect their employment status and benefits.

Find out: Career Quiz: Is It Time for a Career Change?

Can you collect unemployment benefits if you are on furlough?

If you have been furloughed, you may be eligible to collect unemployment benefits.

Unemployment benefits are designed to provide temporary financial assistance to individuals who have lost their jobs through no fault of their own, including those who have been furloughed.

A furlough is different from a layoff because it is typically temporary, and employees are often expected to return to work at the end of the furlough period.

During a furlough, you may be able to collect unemployment benefits, but the rules and regulations can vary depending on your state and the specific circumstances of your furlough.

To be eligible for unemployment benefits during a furlough, you must meet the basic eligibility requirements for unemployment. This includes having worked for a certain period of time, earning a minimum amount of wages, and being available and actively seeking work.

In some cases, you may be required to serve a waiting period before receiving benefits. This waiting period can range from a few days to a few weeks, depending on your state’s rules.

Additionally, you may be required to attend job search workshops or other training programs as a condition of receiving benefits.

To apply for unemployment benefits during a furlough, you will typically need to file a claim with your state’s unemployment insurance program. You can usually do this online or by phone.

Ensure to provide accurate information about your employment status and your earnings during your furlough.

Keep in mind that if you are called back to work before your unemployment benefits have expired, you will need to report your earnings to your state’s unemployment agency.

Depending on how much you earn, your benefits may be reduced or eliminated.

Generally, if you have been furloughed, it is worth exploring your options for unemployment benefits. This can provide a crucial source of financial support during a difficult time, and can help you stay afloat until you are able to return to work.

Find Out: 15 Signs It’s Time For A New Job

Can I get a new job if I am furloughed?

Many furloughed employees may wonder if it’s possible to find a new job while they are on furlough. The answer is yes, it is possible, but there are some things to consider before starting your job search.

When searching for a new job while furloughed, you must be transparent with potential employers about your current employment status. This means mentioning that you are on furlough and the reasons for it.

You can also use this as an opportunity to highlight your skills and experience that make you a valuable candidate.

While furloughed, it may be a good time to explore new job opportunities and industries that you may not have considered before.

You can also use this time to update your resume, build your professional network, and improve your skills through online courses or certifications.

It’s important to note that some furlough agreements may have restrictions on finding new employment while on furlough. Make sure to review your furlough agreement and speak with your employer before starting your job search to ensure you are not in violation of any terms.

While it is possible to find a new job while on furlough, it’s important to be transparent with potential employers, explore new job opportunities, and review any legal restrictions before starting your search.

Never forget that furlough is a temporary measure, and it’s important to communicate with your employer and prepare for the future.

What should I do if I get furloughed?

If you find yourself furloughed, there are several steps you can take to navigate this uncertain time.

Immediate actions to take: First, review your furlough letter and any other relevant documents from your employer. Take note of the expected duration of the furlough, whether it’s paid or unpaid, and any benefits you may be entitled to during this time.

Communicating with your employer: It’s important to stay in touch with your employer during the furlough period. If you have any questions or concerns, reach out to your HR representative or supervisor. Stay informed about the company’s plans for bringing employees back to work.

Preparing for the future: While you are furloughed, take the opportunity to update your resume, network with other professionals in your industry, and consider taking online courses to enhance your skills. This can help you be more competitive when job opportunities arise.

It’s vital to remember that a furlough is not a reflection of your job performance. It’s a decision that companies make based on financial considerations.

Keep a positive attitude and focus on the actions you can take to prepare for the future.

If you’re struggling emotionally or financially, don’t hesitate to reach out to a counselor or financial advisor for support.

By taking these steps, you can make the most of your furlough period and position yourself for success when the company is ready to bring you back on board.

Final Thoughts

We hope that this article has provided you with a better understanding of furloughs, including what they are, how they work, and what you can do if you are furloughed.

Furloughs can be a challenging time for employees and companies alike, and it’s critical to stay informed and take action to mitigate the impact.

Whether you’re an employee facing a furlough or an employer considering furloughs, understanding your options and making informed decisions is key.

If you’re looking for additional support during this difficult time, consider reaching out to CEOMichaelHR Resume Writing Service. We offer professional resume writing services and career coaching to help you navigate your job search with confidence.


Further Reading

Table of Content

Unlock expert resume tips, start landing multiple interviews!


10% OFF


Stay connected to receive powerful career insights, updates, and inspiration that’ll help you hit your 2023 career goals.


10% OFF


Stay connected to receive powerful career insights, updates, and inspiration that’ll help you hit your 2023 career goals.

Start Landing

Multiple Interviews

with our Free eBook

Learn the same techniques our expert resume writers have used to get thousands of clients closer to their next job

Unlock expert resume tips, start landing multiple interviews!