Can You Be Laid Off On Furlough

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 it’s 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, you’re 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.

A furlough will reduce your hours, with a commensurate reduction in pay. Your employer might cut your hours by 10%, by half, or might have you stop working entirely. While furloughs are meant to be temporary, they can turn into layoffs if the turnaround your employer is hoping for doesn’t happen.

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


Does furlough mean laid off?

Furloughs are typically a temporary restructuring, whereas layoffs involve permanent termination. Furloughed employees often still receive health insurance and other employee benefits; laid-off employees do not.

Can you say you were laid off instead of fired?

Being laid off means you have lost your job due to changes that the company has decided to make on its end. The difference between being laid off and being fired is that if you are fired, the company considers that your actions have caused the termination. If you are laid off, you didn’t necessarily do anything wrong.

Do you keep benefits when furloughed?

If your employer furloughs you because it does not have enough work for you, you are not entitled to take paid sick leave or paid expanded family and medical leave. However, you may be eligible for unemployment insurance benefits.

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