Furloughs and layoffs are both methods used by businesses to reduce labor costs. Furloughs are defined as temporary periods, in which the employer requires an employee to take unpaid time off work. The general idea behind a furlough is to retain workers but reduce labor costs by reducing the number of hours they work. Furloughs can come in many different forms, such as:

  • having an employee work fewer hours;
  • giving the employee a full week off; or
  • designating a “furlough day” once a month when employees stay home.

In comparison, a layoff essentially terminates the employment arrangement for the worker. A layoff is usually done because the business encounters financial hardship or the employee’s job is no longer necessary. Unlike with furloughs, the employee is completely severed from payroll and usually can collect unemployment benefits. Sometimes employers may wish to recall laid off employees if the business recovers or the position is once again required. As an incentive to come back, employers will often allow employees to maintain their benefits coverage (e.g. health insurance).

What are Some Differences With Furlough vs. Layoffs?

An employee on furlough is still an active worker with the company and can return to their position at the end of the furlough period. Also, in some instances, the employee may continue to accrue certain benefits, such as paid vacation, pension, retirement benefits, etc. (though this may depend on each individual company policy).

However, laid off employees are not viewed as active with the company. While it is possible that a laid off worker may be invited back to work, there is no set period deciding if or when this will happen. Also, even if a laid off employee is rehired, they may have to go through the same hiring process as a new employee. Laid off workers generally do not accrue benefits such as paid vacation, pension, or retirement benefits. However, employers may allow them to maintain certain benefits as an incentive to remain available (e.g. health insurance). In addition, laid off workers may be offered a severance package upon their dismissal.

What if I Have a Dispute Over a Furlough or Layoff?

Generally, the legal claims related to furloughs and layoffs tend to be different in nature. Usually, furlough lawsuits have to do with disputes over wages and hours, or over employee benefits. However, Layoff lawsuits typically revolve around wrongful termination, retirement, and employment discrimination. If you have a dispute over furlough or layoffs, you may need to first file a complaint with your company’s human resources department. If the dispute is unable to be resolved internally, you may be able to pursue a claim with a government agency or in court.

Do I Need a Lawyer for Help With Furlough or Layoff Issues?  

Legal claims involving furloughs and layoffs can be complicated. In fact, several steps must be taken before a claim can be filed in court. If you have been unfairly dismissed from work or denied earned wages, you should contact an experienced employment lawyer. A skilled employment attorney can evaluate any legal remedies available to you, gather physical evidence, depose witnesses, file necessary paperwork, and advocate for your interests in court.