Employment Changes: The Difference Between A Furlough And A Layoff

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Apr. 15 2024, Published 8:10 a.m. ET

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Losing a job can be challenging for people at every stage of their careers. A layoff may not be the only situation you find yourself in. The best way for you to move forward is to know all of your options. Let’s explore the difference between a furlough and a layoff from your job.

Why Employers Cut Staff

The days of working for the same employer after graduating college till retirement may well be over. As of January 2022, the United States Department of Labor reports that on average, women tend to stay with an employer for 3.8 years, while men stay for 4.3 years. 

Companies can run into financial problems, which cause them to protect their bottom line to stay profitable. That often means going lean with their staffing, which can account for around 70% of their operating expenses.

If your employer initiates a separation, here’s what you need to know.

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What is the difference between a furlough and a layoff?

It’s common for people to conflate a furlough and a layoff. Here’s the rundown of the difference between the two employment statuses.

What is a furlough?

If your employer allows you to go on furlough, clarify exactly what that means to them. A furlough could mean you’re working reduced hours or taking an unpaid leave of absence. Furloughs can last from weeks to months. If you are furloughed, stay in touch with your manager to discuss when you’re expected to return to work. 

When on furlough, you may be able to draw unemployment benefits. Depending on your contract, it may be possible for you to work somewhere else. Furloughed employees also retain health insurance, depending on their health care plan. Some plans require a certain number of hours worked, or you may need to make payments.  

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What is a layoff?

Again, clarify with your employer, but typically, with a layoff, the company completely detaches from the employees. You usually don’t have benefits such as health insurance and are no longer on the company’s payroll. In addition, you could also qualify for unemployment benefits when laid off.

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The Better Option

If you enjoy working for your employer, going on furlough keeps the door open to you possibly working full-time again. Remember, your employer cannot guarantee you will return to full employment.

If you’re ready to move on, taking a layoff frees you up to accept your next position. You’ll have no lingering ties to your previous job.

If healthcare isn’t available to you while on furlough, or you’re laid off, you have options. Some can extend healthcare through the Consolidated Omnibus Budget Reconciliation Act, or COBRA. Check your access to other benefits such as paid time off and your retirement plan.

Whether you’re on furlough or have been laid off, make sure to advocate for yourself and review your options thoroughly. While you can’t control the economy, you can rebound from losing your job. Take time to assess your strengths, spend some time upskilling if necessary, and update your resume. Losing a job is not the end of the world, but it can be the spark that inspires your next career moves.

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By: Wanda Duncan

Wanda Duncan is a multipotentialite entrepreneur and travel and wellness writer. She’s slow traveled since 2010 through Europe, Southeast Asia, and parts of Africa and Central America. Find her work in Fodor’s Travel, HerAgenda, and WeTravel. Wanda is the founder of Black Women Travel and won the Women in Travel Summit 2023 Bessie Awards Social Impact Award and was nominated for the 2021 Trailblazer Award. Connect with Wanda through her website

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