Furlough vs Layoff: What’s the Difference

furlough vs layoff

Difference Between Layoff and Furlough

There’s no doubt about it – losing your job can be a difficult and confusing experience, especially when you don’t understand the reasons behind it.

If you’ve been told that your job has been affected by either a layoff or a furlough, you may be asking yourself a few questions.

Let’s take a look at these two a bit closer and help you understand the key differences between a layoff and a furlough. Whether you’re someone who has just been impacted by a recent event or you’re simply curious about the topic, this post should help answer some of those questions.

What Is The Difference Between Layoff And Furlough?

The primary difference is that a furlough is meant to be a temporary fix/arrangement while being laid off is a more permanent termination from an organization. 

What is a Layoff?

Layoffs refer to the termination of an employee due to lack of work available, poor performance, company restructuring, merger/acquisition, etc. Employees who are laid off are typically eligible for unemployment benefits after they are let go.

What is a furlough?

Furloughs refer to a mandatory, unpaid leave of absence for a set period of time from an organization. Businesses will often furlough employees when they don’t want to layoff staff but lack the resources to continue paying them (in hopes of turning things around). 

Those who are furloughed typically don’t fall under the eligibility bucket for unemployment benefits, but they may be able to continue receiving certain benefits while they are away from the company.

Frequently Asked Questions (FAQ)

Is Being Furloughed or Laid Off Better?

Neither are great but it ultimately depends on the specific circumstances and the needs of the individual employee. There are some differences between the two that may impact which option is more favorable for an employee. For example:

Employees who are laid off are typically eligible for unemployment benefits, which can provide some financial support during the period of unemployment. Employees who are furloughed, on the other hand, may not be eligible for unemployment benefits, as they are not technically terminated from their job.

From a job security standpoint, a layoff may be a permanent separation from employment, while a furlough is typically a temporary leave of absence.

Employees who are furloughed may have a better chance of returning to their job once the furlough period is over. However, this is not guaranteed, and it is possible for a furlough to turn into a permanent layoff if the company’s financial situation does not improve.

How Long Can A Company Furlough An Employee?

There’s no set timeline or limit for how long a company can furlough an employee. There are many factors to consider and often depends on the specific circumstances of the company and the needs of the business.

Some furloughs may last only a few days or weeks, while others may be more prolonged, lasting several months or longer. Most furloughs are a temporary fix, so anything less than one year is likely. 

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Title: What’s the difference between layoff and furlough (furlough vs laid off)

Category: Employer Resources

Tags: furlough vs layoff, Furlough, difference between layoff and furlough, furlough definition, furlough vs laid off, furlough definition, difference between layoff and furlough

Author: Reid is a contributor for theJub. He’s an employment and marketing enthusiast who studied business before taking on various recruiting, management, and marketing roles. More from the author. | Author Profile

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