Furloughed vs. Laid Off: 4 Key Differences

By Indeed Editorial Team

Published August 4, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

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Getting furloughed and getting laid off are two events that could happen during your career, and knowing what these two terms mean can help you understand and respond to them. Although they sound similar, the two terms have important differences. If you're experiencing a furlough or layoff, it's important to understand what it means and what you should do about it. In this article, we explain what it means to be furloughed, what it means to be laid off and the differences between the two.

What does it mean to get furloughed?

Getting furloughed means taking a temporary, unpaid leave from a company that can't afford to pay its employees. When an employee gets furloughed, they're expected to return to the company, so they remain active employees. Employees may get furloughed if:

  • An unforeseen event causes the company to lose money

  • The company reorganizes its structure

  • The company experiences other economic crises

Usually, a furlough takes place for a specific amount of time. If you're furloughed, your company likely sets the amount of time that your furlough will last, which could be weeks or months.

Related: What Is a Furlough? How It Works and How Long It Can Last

What does it mean to get laid off?

Getting laid off means losing a job for a reason that isn't the employee's fault. When an employee gets laid off, they're no longer employees of the company. Layoffs can be temporary or permanent, but companies have to rehire employees that were laid off. There are many reasons that employees can get laid off, including:

  • Decreases in company revenue

  • Overstaffing

  • Downsizing

  • Economic problems

Notably, getting laid off is different from getting fired. Employees are fired when their company terminates them because of an issue that was the employee's fault. Getting laid off occurs because of circumstances that are unrelated to the employee. If you've been laid off, it's important to contact your company's human resources department to ensure you receive your exit package, any severance pay and all of your paperwork.

Related: What Does It Mean To Be Laid Off?

Furloughed vs. laid off

Getting furloughed and getting laid off can seem similar, but the two terms have important differences , including:

Employment status

One major difference between getting furloughed and getting laid off is your employment status. Employees who get furloughed are still active employees at their companies. They're simply removed from payroll and placed on unpaid, temporary leave. However, employees who get laid off are no longer employees of the company. A company would have to rehire an employee that was laid off in order for them to become an active employee again.

Related: Paid and Unpaid Leave of Absence: Definition and Examples

Company benefits

Whether you still get company benefits can be another difference between getting furloughed and getting laid off. Typically, employees who get laid off can no longer get company benefits. However, furloughed employees can sometimes still receive company benefits, including health care, during the time of their furlough. This can vary by company, so it's important to check your company's policy.

PTO policy

Another difference between getting furloughed and getting laid off is whether you can use your paid time off. Furloughed employees usually can't use their PTO, as it conflicts with the purpose of a furlough, which is for a company to save money. However, employees who get laid off can use up the rest of their PTO and get paid for the PTO that they've accumulated during their time at the company.

Related: Getting Laid Off: What It Means and What To Do

Unemployment

Often, both furloughed and laid-off employees can collect unemployment, but there are different guidelines for each. Laid-off employees typically have to prove that they're actively looking for a new job. However, furloughed employees often don't have to prove this, as they're still active employees of their companies.

Related: Different Types of Unemployment

Tips for handling a furlough or layoff

If you're experiencing a furlough or layoff, here are some tips to help you navigate it:

Find out the reason for your furlough or layoff

One tip for navigating a furlough or layoff is to find out the reason for it. Uncovering the reason behind your furlough or layoff can help you process it emotionally. You can speak to your supervisor or another person at your company to determine what caused it.

Assess your financial state

Another important tip for handling a furlough or layoff is to assess your financial situation. Determine whether you have enough in savings to get through your furlough or jobless period. You can make a budget or plan to help you live off of your savings until you start working again.

Related: What To Do if You've Been Furloughed

Decide if you want to apply for unemployment

Another tip for navigating a furlough or layoff is to decide if you want to apply for unemployment. If you don't have enough in savings to last until you start working again, you might consider applying for unemployment. This can allow you to collect payments and benefits until you return to work or get a new job.

Think about applying for other jobs

Whether you've been furloughed or laid off, you can also start thinking about applying for other jobs. You can start browsing online job postings or contacting different companies. If you'd like, you can also connect with your professional network to find out about any potential job openings. If you're furloughed, you might consider looking for side jobs or temporary work to make an income during the period of your furlough.

Take the opportunity to improve yourself

You can also make the most of the period before you start working again by improving yourself and investing in professional development. You can read professional development books, take online courses to improve your skills and update your resume and professional profile. Taking the opportunity to improve yourself during your time away from work can help you set yourself up to advance your career once you return to work.

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