Can You Apply for Unemployment if You Are Furloughed?

Chrysler Assembly Plant

Getty Workers at the Chrysler assembly plant leave the facility at the end of their shift December 19, 2008, in Belvidere, Illinois.

Many businesses across the United States have ceased operations due to the COVID-19 coronavirus outbreak, and because of this, a large number of employees have been furloughed by their employers. Many Americans are wondering: if they are furloughed, can they apply for unemployment insurance?

States are in charge of their own unemployment insurance programs, and eligibility typically depends on where someone lives and works. However, the new stimulus package that was passed by Congress on March 27 declared that all Americans who have been furloughed due to the coronavirus qualify for unemployment.

Furloughed employees also qualify for an extra $600 per week on state benefits. This benefit is currently available through July 31.

This is not just for those who have been furloughed by the coronavirus, it is also for self-employed individuals, freelancers, part-time workers and independent contractors.

Most states require Americans to go to their applicable websites to apply for unemployment benefits. There are also toll-free phone numbers to contact to learn more about the process.

What Is the Difference Between Laid Off & Furloughed?

As Americans are being furloughed, some are being laid off instead, and there is a key difference in the two.

Merriam-Webster defines furlough as “a temporary leave from work that is not paid and is often for a set period of time.” When an American is furloughed by their employer, they stop working for the business. However, they typically return to their position after the situation changes for the firm — for example, social distancing recommendations relax or economic pressures subside.

Employees are not paid their salary while furloughed, but they may still be covered by health benefits, depending on the business.

Merriam-Webster defines layoff as, “to cease to employ (a worker), often temporarily.” But, adds that “historically, the term layoff did indeed mean temporary dismissals, like furloughs. But today, we generally use the word layoff when a person is permanently let go from a job.”

Typically if an American is laid off by an employer, they are terminated from their position. They do not receive a salary or benefits — they are completely off the payroll. So to work in that job again, they would have to be rehired by the firm.

Why Do Companies Choose to Furlough Employees Instead of Laying Them Off?

It can be very expensive for companies to hire and layoff employees. To hire a new worker and put them through training and orientation can cost the employer thousands of dollars. And to layoff an employee, the firm may have to pay out a severance package.

That’s why furloughing is a more strategic decision for companies, as it is more cost-effective and efficient.

This pandemic has halted industries in the United States, and it has left owners dealing with a situation that the vast majority were not prepared for. By furloughing an employee, the employer can keep that person on the payroll and summon them back to work instantly. The firm doesn’t have to hire and train new employees if it furloughs rather than laying off its workers.

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