What Is Furlough and How Can It Affect You?

In times of economic stress, a company may decide to furlough its employees as a way to save the business. So what is furlough and how does it affect you? Furlough is an unpaid time away from your job. You’re still employed, but you’re not working.

Let’s reiterate a critical part of the furlough definition: You will not be paid while on furlough. And because you will not be paid, you are not allowed to work. In fact, you may even have your access to things like your work laptop revoked, because businesses are obligated to pay employees who break the “no work” rule.

While it may not seem like it at first, putting employees on furlough is a way for companies to preserve jobs. Furlough is temporary. Think of it like your employer put you on hold. It’s expected that you will at some point return to your regularly scheduled job.

Furlough vs. Laid Off

Furlough isn’t the same thing as a layoff. When someone is laid off, there is usually no expectation that they will return to work for their employer. But in the case of a furlough, the opposite is true—your employer intends for you to return to your job when the furlough is over.

Furloughed employees can also expect to keep benefits (such as health insurance). There's a limit to how long your health benefits can last during furlough, though: no more than 365 days, according to the Office of Personnel Management.

When you’re laid off, your benefits expire and you are typically eligible for unemployment benefits.

But can a furlough turn into a layoff? Put simply, yes.

Why Does Furlough Happen?

A relative of the just-as-unpopular pay cut, furlough occurs when an employer doesn’t have enough money to keep paying everyone to do their jobs, or there isn’t enough actual work to be done during a slowdown. The 2008 recession, as well as the 2020 recession that followed in the wake of the Covid-19 outbreak across the globe, resulted in many companies putting employees on furlough.

For example, companies as varied as Marriott, United Airlines, and Walt Disney World furloughed employees during the 2020 recession. School bus drivers can be furloughed over the summer when there is no need for them to do their jobs, whereas construction workers can be furloughed over the winter when the weather prevents them from doing their jobs.

Instead of being forced to do the ugly task of laying off employees—only to have to do the extremely laborious and costly process of finding, hiring, and onboarding employees when financial conditions improve—an employer just hits the pause button and puts people on furlough. No jobs are lost.

Furlough can happen a few ways:

• You have to take a number of hours off every week. For example, instead of working 40 hours a week, you must only work 32 hours.
• You have to take a set number of hours or days off per year.
• You have to take one block of time off.

Can You Get Unemployment Benefits When You're Furloughed?

It depends on how many hours have been cut from your job, as well as what state you’re in, according to the expanded unemployment insurance guidelines announced by the U.S. Department of Labor announced in the wake of COVID-19.

While each state has its own rules for administering unemployment benefits, many are waiving waiting periods and other requirements (like being engaged in a job search) typically needed to start receiving them.

Just bear in mind that if your job offers back pay when the furlough ends, you may be required to pay back any unemployment benefits.

Your Right to Find Work

It's an unfortunate conundrum: Just when you need your paychecks the most, you’re furloughed and dealing with the corresponding loss of income. So how can you make ends meet while you wait for your job to return?

One option is to seek temporary employment during this time, but first check with your employer as some may have rules disallowing this. Remember, you’re technically still employed by them so having an additional source of income like a second job could be out of the question.

That said, if you're on furlough, you have every right to take steps to find a new job. Employers are plenty aware of the risk that comes with putting your job on hold, and there is nothing they can do to prevent you from beginning a job search.

Don't Let Furlough Put Your Career on Hold

Just because your boss temporarily put your job on the shelf doesn’t mean you have to stay there and wait it out. Monster is here to help you get through this unprecedented time. We’ll send you free job alerts so you don't have to scroll through loads of ads. Plus, when you upload your resume, recruiters can reach out directly to you with positions you could be a great fit for.

This article is not intended as a substitute for professional legal advice. Always seek the advice of an attorney regarding any legal questions you may have