Experts in human resource services in Cedar Rapids believe it’s important for an employee to understand the terms and regulations that can affect their jobs. Furlough and layoff are two terms that are used when a business needs to reduce its payroll. While many people in the workforce believe that the two terms are interchangeable, they actually mean two different things. These two terms are distinctly different in several ways and can significantly affect your income and benefits after being let go.
At GroHR Consulting, a Cedar Rapids human resource services leader, we want to help employees understand their rights. It’s essential to know the difference between a furlough and a layoff, so you can understand how this affects you, other employees, and business owners.
What is a Furlough?
According to a trusted employment agency in Cedar Rapids, a furlough is a way of pausing someone’s employment by reducing payroll costs, specifically when the employee’s performance isn’t to blame. Just because you have been furloughed doesn’t mean you have been terminated from your job; it instead puts you on an unpaid leave of absence. The employee is expected to return to work in the future.
Furloughs can be used for numerous reasons but are commonly used during mandated shutdowns or seasonal jobs. Furloughs are typically easier for employees that are paid hourly, compared to a salary rate.
What is a Layoff?
According to a trusted HR agency in Cedar Rapids, a layoff is a way to completely let an employee go when their job performance isn’t to blame. Unlike a furlough, if an employee is laid off, they have been permanently terminated from their job. A layoff might not be permanent, but unlike a furlough, a business does not have to bring back an employee that has been laid off.
What are the Biggest Differences Between a Furlough and a Layoff?
A Cedar Rapids HR agency understands that a furlough and a layoff are very similar, but it’s important to know the key differences. According to experts in HR and recruitment services in Cedar Rapids, the biggest difference between the two is the effects they have on your benefits.
You qualify for unemployment during both a furlough and a lay-off. However, laid-off employees will lose all of their health coverage at once, while furloughed employees will have their coverage for a limited time.
A furlough and layoff can also impact a person’s PTO payout. In many states, laid-off employees will receive a payout for any unused PTO time because they are completely removed from the payroll. Furloughed employees aren’t completely removed from the payroll, so they might not receive a PTO payout.
Are You Looking to Work with a Leader in Human Resource Services in Cedar Rapids?
At Gro HR Consulting, we want to help your business, no matter what size. When you partner with us, you will find new possibilities within your reach. We offer dedicated Cedar Rapids human resource services and small business recruitment services designed to help you elevate your business.