Finding a Job

What to Do if You’ve Been Furloughed

January 23, 2021

If you are furloughed because of the COVID-19 virus or suspect that you may be furloughed soon, you may be wondering what it means for your income and future employment. Learning what a furlough is and what to do if you are furloughed can help you be prepared if it does happen to you. In this article, we discuss some of the most frequently asked questions about what it means to be furloughed.

Related: COVID-19 and Your Job: Tips and Actions to Consider

What does furlough mean?

An alternative to laying employees off, a furlough is a required reduction in hours or suspension from work without pay from an employer. Employers usually furlough employees as a cost-saving measure to avoid laying off their staff but cannot continue paying them per usual. Additionally, furloughs allow companies to avoid the expense of recruiting, hiring and training new employees, as the furloughed employees may later return to their positions and continue their work as usual.

Do you still get paid if you're furloughed?

No, you will not get paid if you are furloughed by your company. However, you may technically still be employed by the company, which means that you could retain your benefits, including potential access to any health and life insurance that you previously held through your employer.

Will you return to work after a furlough?

Unlike employees who are permanently laid off, furloughed employees generally expect that they will return to work eventually. The employer often will give employees who are furloughed a specific date or condition that must be met for them to return to their normal duties. Furloughed employees may be allowed to keep their seniority status and they may return to work making the same amount of money that they were making before the furlough.

The COVID-19 pandemic is unlike anything employers have had to deal with before. There is no way to know when the economy will return to normal. While there is no guarantee that every furloughed employee will be rehired, the hope is that the majority will be.

What to do if you're furloughed

There are several steps you can take after you've been furloughed by your company:

1. Consider whether to apply for unemployment

The first thing you should do is check whether you are eligible to apply for unemployment benefits, as this may be one available source of immediate income. There may be options available specifically for people who are financially affected by COVID-19. States differ in how they administer unemployment benefits, so check your state’s unemployment office website for eligibility criteria and instructions on how to apply.

Related: COVID-19 Job Resources by State

2. Evaluate your financial situation

Another important step you should take is to evaluate your current financial situation. For example, assess whether you have savings you should draw from or any other sources of income. Once you have a clear understanding of your financial situation, you should create a new monthly budget. As you evaluate all of your monthly expenses, take note of the ones that you can eliminate right away to save money, such as subscription services or gym memberships.

3. Consider drawing from your retirement

If you have a 401(k) retirement account and are under the age of 59.5, you can withdraw up to $100,000 without incurring the usual 10% penalty, as it's been temporarily waived under the Coronavirus Air Relief and Economic Security (CARES) Act. It is important to note that you will have to pay taxes on this income come tax season next year.

4. Start applying for other jobs

Generally, you have the right to seek employment elsewhere while you're furloughed and you should consider doing so since your employer may not have any obligation to reinstate your position. To set yourself up for a successful job search in the current market, start by updating your resume. You can also upload your resume to Indeed and set it to "public" for currently hiring employers to be able to locate your profile. Additionally, you can add #readytowork to your Indeed resume summary to indicate your immediate availability to employers.

Related: How to Use Indeed to Job Search During COVID-19

5. Develop your skills

As you apply for new jobs, look for ways you can improve upon your skillset. There are many free or low-cost options for improving your skills online and some companies are even offering paid courses for free to help employees during the COVID-19 pandemic. Make preparing for your next job one of your primary responsibilities during the furlough.

Related: Free or Discounted Professional Training Offerings During COVID-19

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