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Explaining the difference between "furlough" and "layoff"

Both qualify for unemployment benefits
These states have the lowest unemployment rate
Posted at 5:49 PM, Apr 21, 2020
and last updated 2020-04-21 17:49:07-04

BUFFALO, N.Y. (WKBW) — More than 22 million Americans are out of work, some are furloughed and others are laid off. 7 Eyewitness News spoke with a labor and employment law lawyer to break down some of the differences.

Robert Boreanaz, a labor and employment law lawyer in Buffalo, said the first step, whether someone is furloughed or laid off, is applying for unemployment.

"You should absolutely be going to the New York State Department of Labor website and apply for unemployment benefits, as well as the extra benefits from the federal government," he said.

He said unemployment benefits are the same in both cases. Below is a breakdown of what happens in each scenario.

Furlough- A temporary leave. The employee is still part of the company, but is not working or being paid. The company intends to bring them back on.

  • Employee does not receive pay.
  • Employee receives employer provided benefits, such as health insurance.
  • Employee does not have money going into their 401k, since that is based off paychecks.
  • Employee is usually asked to use up accrued days before furlough begins.

Layoff- Ends employee's time with the company. The company does not expect to bring the employee back.

  • Employee does not receive pay.
  • Employee does not receive employer provided benefits.
  • Employee receives financial compensation for accrued days.

Boreanaz said companies generally furlough people if they believe COVID-19 will a have a temporary reduction in their need for employees. If the company thinks the pandemic will have a more lasting impact on their business, then they will likely lay people off.

Boreanaz urged everyone receiving unemployment benefits to set aside some of it if possible for next year's tax filings. He said unemployment benefits are not taxed, which means people receiving them will owe taxes when they file in 2020.