With almost 30 million Americans filing for jobless claims in the last five weeks alone, many hard-working families will be forced to learn about their employment rights quickly during this time. The economic shutdown has caused even the largest companies to decide between furloughing their employees or laying them off. Retail companies such as Nordstrom, Macy's, Gap and Kohl's have opted to furlough their employees. Hospitality industry names such as Marriot hotels and AMC Theatres have also chosen to furlough thousands of their employees instead of laying them off, but what does being furloughed really mean, and how is it different from being laid off?
What is a furlough?
A furlough is essentially an unpaid and temporary leave from work that is required and enforced by your employer. This measure is usually taken by a company in order to save costs and can typically last anywhere from a few weeks to a few months. During a furloughed period, an employee is more likely to remain eligible for employment benefits such as 401(k) contributions and health insurance.
How is it different from a lay off?
As an employee on furlough, you technically still have a position to return to once the furlough period has ended. A lay off, however, dictates you no longer hold that job and cannot simply pick up where you left off. Furloughs are also considered different because they help to reduce labor costs by avoiding additional expenses such as separation and severance packages as well as recruitment and training costs as soon as the company decides to reopen. Businesses may tend to favor furloughing an employee over laying them off because it removes the burden of having to hire all new more inexperienced workers. Additionally, companies have had an incentive to furlough employees due to the government's significant increase in unemployment benefits as well as temporary payouts during the coronavirus crisis. This has allowed the government to bear most of the cost of an employee's unemployment giving businesses more of a motivation to continue paying retirement and health benefits.
Whether you have been furloughed or laid off its important to remember that you have rights during this time. Speaking to one of our employment lawyers may be helpful in finding out what you may be entitled to during this time. You can also browse our site for additional useful information here.
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