Furlough vs. Layoff - What's the Difference And What To Do About It

2 years ago

Wondering what the difference is between being furloughed and laid off they're not the same thing but by the end of this blog post, you'll know the difference between furloughs and layoffs and how they can affect your pay, health insurance, and ability to receive unemployment.

So let's understand the difference between furloughs and layoffs by learning what they both are and how they're different when it comes to paying health insurance and unemployment benefits, and what you can do if it happened to you, let's get started first what's the difference let's go over the definitions of both

What’s A Layoff

A layoff is a permanent termination of the relationship between you, and your employer, you're not kept on the payroll. The big difference between a layoff and being fired however is that a layoff usually has nothing to do with the employee’s personal performance, it's usually due to company restructuring or downsizing, often in response to other reasons we'll mention next

What’s A Furlough

A furlough is a mandatory, temporary, unpaid leave, the emphasis here is on TEMPORARY, as in your employer is keeping the door open for you to come back when the business is able to bring you back on. You may also be the first to be reinstated rather than the company going back to the hiring pool.

Why Companies Furlough Employees

Companies choose to furlough employees in times of financial hardship, or as a response to change in customer demand, seasonality, or market share.

Basically, when employees are furloughed, the company chooses to keep them on payroll, they're just on unpaid leave,

Furloughs are recommended to last less than a year, and a company can choose to switch from furlough to layoff at any time during that furlough.

So long story short layoffs you are done working there, furloughs you might get to go back to work there you're just not being paid in the meantime.

The Difference Between Furloughs And Layoffs

Now that we understand the difference between furloughs and layoffs let's talk about how they affect pay health insurance and unemployment.


For a layoff, the employee is essentially terminated which triggers final pay requirements, like a final paycheck, and vacation payout if you have that.

For furloughed workers, usually do not get a final paycheck or vacation payout, because they're technically still employed

Health Insurance

When you're laid off you're basically politely fired so you no longer have access to the same health insurance you once had instead, while you're furloughed you may still have access to the same health insurance benefits you enjoy while being paid

Unemployment Benefits

Though unemployment benefits differ from country to country you can be eligible for unemployment benefits in the way of weekly payouts from the government whether you were furloughed or laid off in most cases it's important you file for unemployment as soon as possible so that you can get a good idea of what your finances will be

What To Do If You Just Got Furloughed or Laid Off

We're going to go over actionable steps you can take to get back on track if you were just furloughed or laid off by your employer let's get started

Step 1 Accept The Situation

Being furloughed or laid off is a bummer there's no way to slice it, and it's easy to get down on yourself for being one of the ones, or even the only one, that got chosen for the cut. the thing is getting down on yourself and believing that you're worthless, or you were a bad employee because you were furloughed isn't going to help anything, it doesn't take into account the reality of the situation, and it doesn't make you more hirable in the future, so take a moment to consider two things if you know the answer

What was the situation that led your employer to make this decision?

Why were you furloughed?

First, what was the situation that led your employer to make this decision, chances are you knew from whispers, inside knowledge, or even the news, that your employer was going to need to make a hard decision; a repeated decrease in revenue an economic crisis or a disaster, are all indicators that can put pressure on a company to lay off workers. Maybe you don't know exactly what happened and that's fine too, what matters more is that you can recognize that it wasn't just you or your performance that led them to this decision

Second, if they shared with you why you were chosen, then you can consider whether or not there was anything you could have done to prevent yourself from being selected, but the reality is there probably wasn't anything you could have done, and both of these facts where your employer was and where you were, are often just undeniable things that couldn't have been changed. once you know that, you can accept the situation as it was SOMETHING IMPERSONAL AND NOT AN INDICATOR OF YOUR WORTH

Step 2 Make A Plan

Now is the time to consider your options, and next steps, if you haven't already taken a hard look at your finances, and identified what you need to survive in this gap, remember unemployment benefits are available to those who find themselves unemployed through no fault of their own, apply for unemployment benefits as soon as possible so that you can recoup some of the lost income from being laid off.

If you aren't already keeping a financial budget it's a great time to learn to do that, take control of whatever finances you have; and get a firm understanding of how long you can go without finding a new source of income, further understand the reality of whether or not you can get your job back; furloughs are often temporary with the expectation of giving you your job back, it's important not to bank on this though, by taking a hard look at your finances you can get real with yourself and whether or not you can wait for your job to come back or if you need to take matters into your own hands sooner.

Step 3 Take Care Of Yourself

As mentioned above, it's easy to internalize feelings of low self-worth when you're laid off or furloughed, which means tending to yourself is more important now than ever, even if it's hard to remember to shower, eat well, exercise, and sleep so that you can rest yourself during this time and have the energy to continue your job search, remember too that this could be a good time to pause and consider if there's a different type of work you can be doing to fulfill you.

Step 4 Leverage Your Connections

If you lost your job, there are going to be people in your corner wanting to help you out,

Reach out to your former employer expressing gratitude for the opportunity and ask them if they'd be willing to give you a reference letter or endorsement on LinkedIn.

Make a post on LinkedIn or your other social media networks, explaining the situation, express gratitude for the job you had, and sincerely ask your network for help, by keeping an eye out for postings and passing your name along to their employer if they know of an opening, or just sending you good vibes as you begin your job search.

Step 5 Make Your Next Move

There's no rest for the jobless, if you're in need of income that means that after you've taken the time for the above steps you're ready to take action, extended unemployment can wreak havoc on your mental health, so the sooner you can get yourself into the habit of applying the better. job searching is tough and rejection can be demoralizing, but the sooner you motivate yourself to begin your job search, the sooner you'll get out of it.

If you can take some time to make a different move, take this opportunity to better understand what you're looking for, and what will fulfill you, you may find that you enjoy this period of rest.

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