What Is a Furlough and How Might It Affect You?

Stay financially prepared, even in times of crisis


The coronavirus outbreak has altered life as we know it. The food industry, airlines and once-popular retailers are in the midst of taking financial hits. If you work for an employer that is struggling to stay afloat financially, you might be wondering how your job status could be affected. On the chance that your employer decides to furlough employees, here’s a breakdown of what that might mean for you and how you can return to the job force

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What is a furlough?

According to the United States Office of Personnel Management, a furlough is defined as the temporary placing of an employee in a non-duty, unpaid status due to lack of work or funds or other nondisciplinary reasons. Companies identify nonessential employees and put them on a mandated unpaid leave to start saving money during tough financial times. The intention is for the company to pick normal operations back up after the furlough period is over.

Continued coverage of benefits through a furlough is a case-by-case basis that is going to be dependent on plan terms. If a plan does not cover through the furlough, you could possibly be eligible for COBRA.

Can someone apply for unemployment while furloughed? 

Furloughed employees can potentially become eligible for unemployment benefits depending on their state unemployment compensation requirements. According to the United States Office of Personnel Management, some states require a one-week waiting period before an individual qualifies for payments. And, in general, the state laws where the person was last employed determines eligibility for unemployment insurance benefits. However, according to the U.S. Department of Labor, states have been granted the flexibility to provide assistance for employees affected by the COVID-19 outbreak. 

How and when can you get your job back?

Furloughs are meant to be temporary, short-termed suspensions of work and pay. Companies, however, are not required to stipulate when a furlough will end. 

Who is currently being furloughed?


Industries that are most weakened by global economic impacts are furloughing their employees. During the COVID-19 outbreak, this includes retailers, hospitality companies and airlines. Marriott International, one of the world’s largest hotel companies, General Electric, Sonder, ZipRecruiter and Everlane have furloughed thousands of workers. Macy’s, Kohl’s, The Gap Inc., Nordstrom and Designer Brands, which operates DSW, are also several retailers that have furloughed employees. Any number of people may be affected in this difficult time, so checking in on friends and family regularly is one of the small acts of kindness you can do from home.