What actually happens when you’re furloughed? Elaine Varelas explains

Furloughs have become more common while companies figure out how to adjust and make changes to protect their business and their employees against the COVID-19 pandemic. They may want to keep their employees in their current roles, but simply can't afford to. Elaine Varelas explains why they might choose to furlough, and what that means for the employee.

Ask the Job Doc.
Ask the Job Doc. –Boston.com

Q: I’m doing a lot of work, but I still worry about being furloughed. What does it mean? Will I be able to get my job back if that happens?

A: Furloughs have not been common, though they have reemerged as a solution to human capital challenges during the COVID-19 pandemic. Being furloughed is a difficult spot to be in: You aren’t working, and in fact you can’t perform any work for the organization, but you’re still considered an employee. You may be furloughed from your entire job, or have your hours reduced. Furloughs are a retention strategy. The message is that you’re a vital part of the company, and that they anticipate that your skillset will be needed when things are “back to normal,” but at this point, they can’t afford to have you working every day based on the current financial situation, or because the work isn’t there.

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Though you lose your income while you’re furloughed, many organizations do continue to pay your health benefits, and some will continue to contribute to contribute to your retirement account if the plan allows. If you were a full time employee, most often you will be able to collect unemployment benefits while you are furloughed. Each state determines whether or not individuals can collect unemployment, however, which many people don’t realize. It is not up to the employer. Employers may contest the benefit, but only the state office makes the final determination.

Organizations might choose to furlough employees when they believe they’ll be able to bring employees back in a relatively short period of time. They view furloughs as a solution to a temporary problem. Employees stay on the payroll and when they return, there is no interview process; they are simply called back. The plan is for you to step back into the job you were skilled at, with no training needed, and with the ability to contribute immediately upon return. Companies are also hoping that you won’t look for another job because they’re expressing that they do want you to come back into that role.

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The retail industry furloughed many of its employees, recognizing that when the doors reopen to their stores, they hope to bring those workers back, and e-sales are not significant enough to keep their entire employee base employed. The same is said for restaurants and travel-related companies.

Originally, furloughs were used within manufacturing organizations who would shut down a plant for two weeks or longer and furlough employees, who would then be able to come back to the organization when the plant reopened without having to go through an application process.

Furlough is different from layoffs in that furlough is considered a temporary status maintaining a relationship with the organization, and a layoff is a permanent end to the employment relationship, including salary and benefits. There might be a tail of benefits when you’re separated from an organization, whether that’s severance outplacement, or some other kind of benefits in addition to COBRA benefits, but a furlough and a separation are not the same. Furloughs may turn into separations if conditions within the organization don’t change in a time frame the company can support.

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