Experiencing job loss may occur at some point in your career. However, there are different types of job loss. Understanding what the different types are may help you understand why your employer made their decision, what this means for your career and what rights you have as an employee. In this article, we define furlough, fired and unemployment and provide the similarities and differences between the three forms of job loss.
What does being furloughed mean?
Being furloughed may occur when your company still wants to employ you but temporarily suspends your work and pay. Many organizations choose to furlough employees rather than lay them off when they believe this will serve as an effective solution for a temporary problem. Also, if you’re furloughed, your employer typically still provides you with benefits, such as health care.
There are different types of furlough that may occur. For example, hourly employees may experience a:
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Reduction in hours: Employees still work, but they work less than they previously did or agreed to in their contracts, such as working 30 hours per week during the furlough rather than their standard 40 hours. In addition to affecting their work in pay, this may also affect their eligibility to receive benefits.
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Zero-hour schedule: The company temporarily ceases operations completely with the intention to resume normal operations as soon as possible. All employees lose access to work and pay, but they should continue to receive benefits.
Reduction in hours: Employees still work, but they work less than they previously did or agreed to in their contracts, such as working 30 hours per week during the furlough rather than their standard 40 hours. In addition to affecting their work in pay, this may also affect their eligibility to receive benefits.
Reduction in hours: Employees still work, but they work less than they previously did or agreed to in their contracts, such as working 30 hours per week during the furlough rather than their standard 40 hours. In addition to affecting their work in pay, this may also affect their eligibility to receive benefits.
Zero-hour schedule: The company temporarily ceases operations completely with the intention to resume normal operations as soon as possible. All employees lose access to work and pay, but they should continue to receive benefits.
Zero-hour schedule: The company temporarily ceases operations completely with the intention to resume normal operations as soon as possible. All employees lose access to work and pay, but they should continue to receive benefits.
Salaried employees, however, may experience being furloughed differently through:
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Pay cuts: During a furlough, an employer may introduce pay cuts that meet certain criteria, but they shouldn’t alter an employee’s ability to receive benefits. These pay cuts must be consistent and implemented as part of a long-term plan to ensure the company remains viable.
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Reduction in work: Employers may cease work and pay completely for a period of time, but they continue to provide standard employee benefits. Similarly, some organizations may also elect to require employees to take a certain amount of unpaid leave per month or quarter as a modified way to reduce work and cut costs.
Pay cuts: During a furlough, an employer may introduce pay cuts that meet certain criteria, but they shouldn’t alter an employee’s ability to receive benefits. These pay cuts must be consistent and implemented as part of a long-term plan to ensure the company remains viable.
Pay cuts: During a furlough, an employer may introduce pay cuts that meet certain criteria, but they shouldn’t alter an employee’s ability to receive benefits. These pay cuts must be consistent and implemented as part of a long-term plan to ensure the company remains viable.
Reduction in work: Employers may cease work and pay completely for a period of time, but they continue to provide standard employee benefits. Similarly, some organizations may also elect to require employees to take a certain amount of unpaid leave per month or quarter as a modified way to reduce work and cut costs.
Reduction in work: Employers may cease work and pay completely for a period of time, but they continue to provide standard employee benefits. Similarly, some organizations may also elect to require employees to take a certain amount of unpaid leave per month or quarter as a modified way to reduce work and cut costs.
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What does being fired mean?
Being fired may occur because of something you did as an employee. This may include violating your contract, poor performance, misconduct, failing to comply with company policies or similar offenses. However, most organizations have warning systems in place to discuss concerns with you prior to firing you. It’s important to be familiar with your employer’s policies, which you may likely discuss with your human resources manager or find in your employee handbook.
What does unemployment mean?
Unemployment often refers to being laid off, which means you’ve lost your job through no fault of your own. Instead, the job loss results from company changes. This may include internal restructurings, the elimination of certain departments or roles, a general lack of work or the company being unable to support their employees and needing to reduce costs quickly. Employees lose access to pay, work and their benefits.
Unemployment or layoffs differ slightly from a reduction in force. Most organizations hope to be able to recover from troubles to rehire employees they’ve laid off, but a reduction in force is a permanent change. For example, some companies, such as those in construction, may lay off employees during the winter but rehire them in spring when projects resume. However, it’s possible for layoffs to become permanent.
Similarities between furlough vs. fired vs. unemployment
Aside from relating to job loss, some other similarities between being furloughed, fired and unemployed include:
Employee rights
Regardless of if you’re furloughed, fired or laid off, you’re still entitled to employee rights. Your employer must have a justifiable reason for their decision, and they cannot discriminate against you when deciding who to furlough or to lay off or as the justification for them firing you. However, there may be exceptions for at-will employment. If you’re concerned about your rights as an employee, review your contract and employee handbook and ask your HR manager.
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Exit paperwork
All types of job loss involve completing some form of paperwork, and you typically will have a discussion with your HR manager or a similar professional. Your employer must provide you with a written notice of your termination or furlough. In most instances, you may also need to sign a document verifying you understand the decision. During this discussion, your HR manager may also review topics such as how you will receive your final paycheck or what the anticipated return-to-work date after furlough is.
Behavior
While temporarily or permanently losing your job may be frustrating, it’s important to handle the situation professionally. If you encounter any type of job loss, strive to maintain a positive attitude and avoid making negative comments about your employer in person or online. This may help you maintain a positive relationship with the company, which is important if there’s a potential opportunity for you to return to work or if you hope to receive their assistance when you’re looking for a new job.
Access to company
You typically lose access to all things related to your job when fired, laid off or furloughed. This may include returning certain equipment, being locked out of your company accounts or losing access to your physical job site. However, there’s an exception to this for furloughed employees who have reduced hours or received a pay cut. These employees may keep their same access, but furloughed employees with zero-hour schedules or no-work periods typically lose their access.
Negotiability
Being laid off, fired or furloughed is non-negotiable, and it’s generally unlikely that you’ll be able to change your employer’s decision. However, some layoffs are temporary, and you may be able to join a recall list if you’re hoping to return to your position. Similarly, being furloughed may be an opportunity for you to end your relationship with your current employer and seek permanent employment elsewhere.
Next steps
While most people don’t plan for job loss, it’s important to prepare for the next steps once you receive your notice. For example, you may update your resume or professional networking websites to prepare to apply for jobs, or you may explore training courses to help improve your skills. However, if you’re furloughed, it’s important to meet with your HR manager or review your company before seeking additional work. Many companies allow furloughed employees to accept temporary jobs or gig work, but they may bar employees from accepting permanent roles as the intention of furlough is a temporary leave.
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Differences between furlough vs. fired vs. unemployment
Here are some differences between furlough, fired and unemployment:
Fault
Fault for job loss varies between furlough and unemployment versus being fired. If you’re furloughed or laid off, the fault is with your company. It’s generally out of your control and, instead, related to changes within the company, such as an inability to provide jobs or a decision to downsize. Conversely, being fired is solely a result of your actions as an employee.
Unemployment benefits
Eligibility for unemployment benefits varies by state, and they may also vary based on certain global circumstances. However, being fired typically prevents you from qualifying to receive unemployment benefits. If you’re furloughed or laid off, however, you may qualify to receive unemployment benefits. Exact benefit amounts may vary based on state regulations and your standard wages.
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Benefits
Being furloughed means you’re still an employee of the company, but it’s currently not paying you because it’s unable to provide you with work. However, as you’re still an employee, you’re generally still entitled to receive health care benefits. Conversely, being fired or laid off means losing your access to benefits. However, some organizations may off options to purchase insurance or include a grace period for your health care coverage.
Rehire eligibility
Rehire eligibility varies for each type of job loss. If you’re furloughed, you’re still an employee, so returning to work is more similar to a reactivation status rather than a rehire status. If you’re laid off, you’re likely eligible for rehire with your organization, and there may be the possibility of returning to work depending on the organization’s performance. If you’re fired, however, most companies may not rehire you or may place you on a probationary restricted rehire status.
Exit package
Exit packages, or severance packages, may include a certain amount of pay or a payout of unused accrued PTO upon termination, and employee handbooks often outline what’s include and who’s eligible to receive one. If you’re furloughed, you likely will not receive one of these packages because you’re still technically an employee and receiving health care benefits. However, if you’re laid off, you may expect to receive some kind of severance package upon your departure. If you’re fired, you may receive a severance package, but this may depend on your employer and whether you’re leaving the organization on good terms.
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Permanence
Being furloughed is often temporary, and many organizations provide an expected return-to-work date or establish how long they expect the furlough period to last. In comparison, being laid off may be temporary if your organization believes it will be able to recover from its losses or changes, but it’s often a permanent change. Being fired, however, is nearly always a permanent decision.
PTO
PTO affects each type of job loss differently. For example, depending on accrual policies and state regulations, if you’re laid off, it may be a requirement for your employer to pay out your unused PTO to you as a lump sum. Similarly, these same requirements may apply if you’re fired. However, if you’re furloughed, your employer may require or allow you to use your accrued PTO before beginning your furlough period.