The economy is in a tumultuous place as many people are facing the possibility of getting laid off or furloughed in the near future. But these two terms are not the same, and itâs crucial to understand how furloughs and layoffs can impact you and your small business insurance.Â
There are a variety of health insurance options for small businesses, but regardless of the insurance you have, if you get laid off or furloughed during your time of employment, youâre probably wondering how that will affect your small business employee benefits. Keep reading to learn more about the layoff vs furlough benefits below so you can understand how they affect insurance.
How long can a company furlough an employee?
The terms of a furlough are generally up to the employer’s discretion, but their length usually coincides with that of the downturn. It’s customary for businesses to notify employees in advance if there will be an extension. In some cases, however, protracted furloughs lead to layoffs.
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Furlough for salaried or exempt employees
Under the rules of the Fair Labor Standards Act (FLSA), exempt employees must be paid their full salary for any week in which they perform work, regardless of the actual hours. This means that they can only be furloughed in weekly increments at minimum, during which time they are forbidden from engaging in any of their usual job responsibilities. Their access to work-related programs may even be restricted or their employer-issued devices confiscated to ensure compliance.
Furlough for hourly or non-exempt employees
Unlike salaried employees, hourly workers who are furloughed may continue to work in some circumstances. Their employer may simply reduce their total hours per day or their total days per week. Businesses also have the option of furloughing non-exempt employees for weeks or months at a time – a situation commonly referred to as zero hour schedules.
The difference between getting laid off and furloughed
FAQ
Does furlough mean laid off?
Can you say you were laid off instead of fired?
Do you keep benefits when furloughed?