Due to the devastating effect, the coronavirus pandemic is having on the U.S. economy, in March, jobless claims soared to record-breaking heights, and on April 1, ADP and Moody’s Analytics released a workforce report that forecasts tens of millions more in job losses in the coming weeks. More dire estimates of job losses anticipate upwards of 47 million job losses in total due to the pandemic, and some economists project 66 million jobs are at “high risk” for termination.

With millions of U.S. hospitality jobs at stake, many people in the hospitality industry are already feeling the impact, either through layoffs or furloughs. Marriott, the world’s largest hotel company, Hilton, Hyatt, and many other well-known hotel brands, not to mention smaller or privately-owned hotels, have already initiated layoffs and furloughs for tens of thousands of employees around the world, with more likely to come.

If you find yourself in the position of losing your hospitality job due to coronavirus, or if you are anticipating getting the news from your employer sometime soon, it’s important to understand the difference and nuance between a “layoff” and a “furlough” so that you can best plan for your future.

What is a Layoff?

A layoff is a fairly straightforward separation of employment where the employee is no longer on payroll or receiving any kind of compensation or benefits from the employer. You are no longer an employee of the company or associated with it. A layoff can take effect immediately or up to a few weeks in the future. It’s also important to note, however, that layoffs are not necessarily permanent. Most employees who are laid off are technically eligible for rehire with the same employer at a later time. 

What is a Furlough?

A furloughed worker is still an employee of the company, and there is not a complete separation between employer and employee. However, on furlough, the employee is forced to either take a reduction in hours and pay or to take a complete break from all of their job duties without any pay or compensation whatsoever. Simply put, it’s a forced unpaid leave of absence from your job.

Furloughs are temporary and usually last less than 6 months, with the employee most often retaining the same job title or status within the company and returning to their original pay level once the furlough is lifted.

Most often, furloughed employees are able to maintain their retirement benefits, although health coverage and other benefits can depend on the employer’s plan or provider (although, during the coronavirus pandemic, some insurance companies are making special allowances for furloughed workers). 

The Biggest Difference Between a Layoff and a Furlough:

Layoffs are most often a permanent termination of employment, while furloughed employees experience a temporary pause in their job duties and compensation yet retain their position in the company. Furloughed workers are expected to return to work once the furlough (and, in the case of coronavirus, the crisis driving the furlough) has ended.  

What To Do if You’re Furloughed:

• Understand that most furloughed employees can still apply for unemployment benefits. Check with your state’s unemployment laws to confirm your eligibility. However, if your state denies benefits to furloughed workers, Congress recently expanded unemployment benefits to include furloughed workers who have been cut as a direct result of the coronavirus pandemic, so you will still be eligible to receive those benefits during the furlough.

• Be clear on your benefit eligibility or health coverage during the furlough for both yourself and any dependents. Has it changed? Will coverage last the entire length of the furlough? Has your coverage decreased in any way? These are all questions you should ask your employer. 

• Use your time off wisely. Furloughed employees are, of course, free to look for other permanent employment during the furlough, but you can also use the time to enhance your skills set, work on your online professional profiles, learn something new that will benefit your career, or reassess your career path. 

• Don’t work for your employer. Furloughed employees, in particular those who are forced into a complete leave of absence, are absolutely not supposed to engage in work of any kind for the employer. 

• Ask your employer about the specific conditions under which they will lift the furlough. While they may not be able to give you an exact end date, you should have a good understanding of the conditions that need to be in place for things to start up again. That way you can have a better sense of how long the furlough might last and plan your professional and personal life accordingly.