During times of economic hardship, companies may opt to furlough their employees. The main purpose of furloughing employees is to temporarily downsize in order to cut costs, especially if an organization’s projected revenue fails to match its expenses. The keyword here is “temporarily,” meaning there is a significant difference between furloughs as opposed to layoffs or termination.
If you’ve recently been furloughed, don’t panic. One of the most critical ways to get through a furlough period is to be proactive, and we’re here to help you navigate through it. First, let’s answer any burning questions you may have.
A furlough is a mandatory unpaid leave of absence from a job. It’s a short-term solution for cutting costs and reducing company size, which typically occurs during tough financial times. Unlike a layoff, furloughed workers remain an employee of the company, and employees are expected to return to their job after the furlough period ends.
No, furloughs can be put into place by both public and private organizations.
The duration of furloughs can vary, but all furloughs are meant to be temporary. Some employers require employees to take one day of unpaid leave per week, while others ask furloughed employees to take off several weeks without pay. A reasonable length of time that a company should furlough an employee is no more than 12 months. Otherwise, the company should consider laying off its employees instead.
No, the purpose of a furlough is for companies to cut costs due to economic hardship. Employees cannot work during this period, therefore they cannot get paid.
Typically, unemployment eligibility varies by state, but during the COVID-19 global pandemic, both furloughed and laid-off employees can file for unemployment under the Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus package — even if they are not eligible under the state level — as long as the reason for their unemployment is related to the COVID-19 pandemic.
During a furlough period, employee benefits can vary by company. Best practices would be to check with your HR department for more information on coverage, but more often than not, furloughed employees are able to use their medical and dental benefits during this time. Non-health benefits such as retirement and 401k may be put on hold, depending on each company.
In most cases, furloughed employees may try to find another job until their previous company asks them to return to work. It’s good to check with your manager or HR department if seeking other work is allowed according to your employment contract. However, if a furloughed employee finds another job during this period, their unemployment eligibility may be impacted. Most people seek part-time employment to pay their bills, which means they may still be eligible for partial unemployment.
During these troubling times, it’s essential to know your rights so you can take proper action to move forward and get your finances in order. First and foremost, keep in mind that you still have the power to exercise your rights as an employee, therefore it is unlawful for your employer to fire or replace you while you are on furlough.
Be sure to familiarize yourself with the newly enforced CARES Act, which is currently valid from March 23rd to July 31st of 2020, unless it is extended. The $2 trillion CARES Act helps U.S. residents whose income was affected due to the pandemic. The $2 trillion budget includes the coronavirus stimulus package, Pandemic Unemployment Compensation, and enforces the “no-work” rule.
To dive deeper, the coronavirus stimulus package will issue a one-time payment of $1,200 to a majority of adults who filed their taxes in 2018 and/or 2019. Payments are issued via direct deposit if the IRS has your bank information, or can also be sent as a check in the mail. To find out if you qualify or want to view the status of your payment, you can visit the IRS website. The amount you receive depends on your reported gross annual income. If you are a single adult with an adjusted gross income of $75,000 or less, a married couple with no children earning $150,000 total or less, or claim yourself as the head of household with a reported income of $112,500 or less, you will receive the full $1,200 amount. From those figures, the $1,200 baseline payment will decrease if your reported income is higher than the figures listed above.
Pandemic Unemployment Compensation provides additional aid for those who file for unemployment due to the COVID-19 pandemic. If you were furloughed due to the pandemic, this is where we encourage you to act fast. A weekly payout of $600 has been enacted by Congress through July 31st for individuals who are eligible for unemployment in 2020. The sooner you apply for unemployment, the sooner you will start receiving payments.
Finally, the “no-work” rule prohibits furloughed employees from doing any type of work during the furlough period. This includes answering work-related emails or phone calls, so if anything is asked of you during this time, you have the right to say no.
With a clearer understanding of what it means to be furloughed, it’s time to take action. For starters, you should find out if you’re eligible for unemployment so you can register and avail of the payouts as soon as possible. If eligible, you’ll need to determine if the money you will receive is enough to pay the bills. If not, your next option is to seek temporary work. Thankfully, Joblist is here to help with your search. Easily customize your search based on occupation and location, then browse through the hundreds of companies that are currently hiring.