Furlough vs layoff: What's the difference?

ByAlex Meier WLS logo
Saturday, April 4, 2020
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From retailers to airlines to restaurant chains, thousands of companies across the country are furloughing workers during the coronavirus crisis.

But what does "furlough" even mean? And how is it different from a layoff?

A furlough is a form of temporary job cut, essentially a temporary layoff. Companies furlough workers with the goal of re-hiring once they're back in business.

Often, furloughed workers maintain health insurance, and some are even paid. Different companies support furloughed workers differently.

Still, furloughed workers are eligible to receive unemployment benefits. Those furloughed are also free to seek a new permanent job or even a temporary job unless the employer prohibits outside work.

Employers are not allowed to give furloughed employees work, including answering emails and taking phone calls.

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A layoff, on the other hand, has more permanent implications and usually implies that employees are taken off of payroll.

Layoffs can also be temporary, though rehiring is never guaranteed. Since the early 1990s, layoffs in recessions have increasingly been permanent, the Associated Press reported.

About half of all working Americans report some kind of income loss affecting themselves or a member of their household due to the coronavirus pandemic, according to a new poll from The Associated Press-NORC Center for Public Affairs Research.

Low-income Americans and those without college degrees especially likely to have lost a job.

The income losses include pay cuts, unpaid time off and reduced hours, as well as actual lost jobs, with 23% of adults who had work when the outbreak started saying they or a member of their household have since been laid off. A third of those in households making less than $50,000 a year say they or a household member have lost their job.

The Associated Press contributed to this report.