Furlough Defined: What are your rights?

Time to read: 5 minutes

Furlough Defined Summary:

• Defining furlough, how it differs from a layoff, and what are employee expectations.
• Understanding employee rights during a furlough.

How has your job been affected by COVID-19?

We are well into a nationwide, not to mention, global quarantine from COVID-19. This virus has changed life as we know it, affecting daily life, life events, and most importantly, our health and hygiene habits. However, one gaping hole the virus created was in the economy. In the wake of the coronavirus pandemic, a large number of Americans were left without jobs. A record number of 22M Americans have filed for unemployment in the last four weeks.

Some employees were bluntly laid off while others were furloughed. So, what exactly does that mean, and what are employees’ rights during this time?

Furlough Defined

To start, a furlough is an employer-mandated temporary leave of absence, suspension as a result of the special needs of a company. In contrast, a lay off is a permanent removal of an employee from the company. Furloughs can last anywhere from a few weeks to months. The leave of absence helps employers reduce labor and salary costs without adding on new costs (think severances). While losing your job is not ideal, a furlough is a best-case scenario. An employer will usually implement furloughs when they would prefer not to lay off employees, but with current circumstances cannot afford to pay them at that time i.e. COVID-19 outbreak. With that, there is an expectation from the employee that they will return to work in their respective position, if they wish to, when the specific condition is met, and/or the expected return date approaches as well a

During the furlough, employees are NOT to work at all during a furlough. Employees retain their employment rights. If a salaried employee does do any work while furloughed, the employer is required to compensate the employees for a full day’s work (for an hourly employee, the employer pays hours worked).

Unemployment and Furloughs

Furloughed employees can take unemployment benefits. Unemployment is paid by the state vs. federal government. Since unemployment is state-mandated, each state differs in its rules around collecting unemployment, such as waiting periods to collect benefits and requirements that the applicant shows an active job search – which may disqualify a furloughed employee. In regards to the COVID-19 outbreak, the CARES Act has enacted an additional $600 unemployment insurance, which includes those who have been furloughed as a result of the virus.

Job Searching while Furloughed

Can a furloughed employee job search, despite having a job to go back to when the time is right? Absolutely. A furloughed employee has every right to seek new employment. This is one of the other risks that come with hard times for employers – losing top employees. Generally, employers choose to furlough, rather than laying off, employees they value and want to keep but cannot afford to pay them due to circumstances. However, this unpaid leave of absence, even with unemployment benefits can be hard for some. Many furloughed employees even take on contract or temporary work during this time.

It is advised that employees look into any rules against second employment or second jobs if a contract opportunity presents itself. Furloughed employees do not have to tell their employers about new employment during a furlough unless it might violate a “moonlighting” or non-compete restrictions.

Furlough and Health Benefits

Despite the cut in pay, it is likely furloughed employees retain their health insurance, but it is not guaranteed. Typically, employers still provide health benefits and life insurance during a furlough. If an employer cannot or does not cover health benefits, employees can rule for COBRA; a federal law that allows you to stay on your employer’s health insurance plan.

If a furloughed employee has some hesitations around coverage, their respective state’s Affordable Care Act marketplace is their next stop.

COVID-19 Updates with Profiles

Profiles continues to monitor the current business and economic climate. Stay updated through our Coronavirus Updates as we continue to provide digestible content on hiring, job searches, working remotely, and other relevant topics.