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What Is a Furlough and What Does It Mean for Employees?

As a result of the Coronavirus pandemic sweeping the United States, numerous local and state governments have ordered the closure of non-essential businesses. That, in turn, has forced employers to reduce their workforce. There are several ways an employer can accomplish this, one of which is to furlough employees. If you were recently furloughed, it is in your best interest to understand exactly what that means for you as an employee.


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What is a furlough?

A furlough is a mandatory, albeit temporary, suspension from work. During a furlough, an employee does not get paid but does have an expectation of returning to work at some point. Furloughs can occur in the public or private sector.

Can I do any work if I was furloughed?

Once an employee has been furloughed, a very strict No Work Rule applies. That means the employee cannot do any work for the employer. Making a single call or returning a single email on behalf of an employer triggers a violation of the No Work Rule and results in an obligation to pay the employee. If the employee is a salaried employee, the employer must pay the employee his/her salary for the entire week if the employee does any work at all during the week. As a consequence of the No Work Rule, an employer may revoke a furloughed employee’s access to work accounts despite the expectation that the employee will eventually return to the job.

How is a furlough different from a layoff?

When an employer experiences a slowdown or needs to cut costs, reducing the workforce is one way to do so. That can be accomplished by laying off or furloughing employees. Although similar, there are some important differences between being laid off and being furloughed, such as:

  • If you are laid off, you are not given a return to work date nor do you have a strong expectation of being called back to work. A furloughed employee, however, usually expects to return to work and is often given a specific return to work date or a specific condition that will trigger an end to the furlough.
  • A laid-off employee usually does not get to keep his/her benefits whereas a furloughed employee does.
  • For an employer, it is much easier to furlough employees than to lay off employees because a significant amount of paperwork is involved in a lay off whereas a furlough simply requires notice to the affected employees.

How long can a company furlough an employee?

An employer will typically provide a definitive return to work date when furloughing employees or explain what must happen for the furlough to be lifted; however, a furlough can be for an indefinite time period.  For example, government employees are frequently furloughed when Congress fails to pass funding legislation in time to keep the government running. When that happens, agencies within the government that are impacted will furlough employees with the understanding that when the necessary funding is in place, the employees will return to work.  In the private sector, a company may schedule a furlough for a predetermined amount of time during the slow season with the expectation that employees will return to work at the end of the time period.

Do furloughed employees keep their health insurance benefits?

One of the most important distinctions for an employee between a furlough and a lay off or outright termination is that a furloughed employee retains his/her benefits, including health and life insurance. This is because a furloughed employee is expected to return to work at some point whereas an employee who was laid off does not have the same return to work expectation.

Can a furloughed employee collect unemployment benefits?

Eligibility for unemployment benefits is determined by your state of residency; however, as a general rule, you should be eligible for unemployment benefits as a furloughed employee. The threshold issue when applying for unemployment insurance benefits isn’t whether you are employed but whether you actually earned anything in the previous week. One benefit of being furloughed instead of laid-off though is that you may not be required to show that you are looking for work while receiving unemployment benefits. In that case, the fact that you are technically still employed as a furloughed employee, but you just aren’t being paid, may work to your advantage.

The December 2020 COVID-19 Relief Bill and furloughed employees

A second bipartisan bill aimed at easing the financial devastation American workers and businesses are facing because of the coronavirus was signed into law on December 27. This second COVID Relief Bill provides additional one-time payments of $600 for eligible individuals, provides 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 will receive a boost from this bill, as airlines seek to delay furloughs or call back furloughed employees in order to secure $15 billion in payroll support as a result of the COVID relief bill.

As a furloughed employee, you might have questions about your rights and the employment laws of your particular state. Contact a Rocket Lawyer On Call® attorney with questions about your particular situation for fast and affordable legal advice.

This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.

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