What to Do if You Are Furloughed, Fired or Laid Off

Laveta Brigham

Innovation and reinvention are common themes in the modern workplace. This can often result in shifting resource allocation and employee headcount. The coronavirus pandemic has also resulted in many workers losing their jobs, temporarily or longer term. Regardless of economic conditions, employers cut staff for various reasons. It is unlikely that […]

Innovation and reinvention are common themes in the modern workplace. This can often result in shifting resource allocation and employee headcount. The coronavirus pandemic has also resulted in many workers losing their jobs, temporarily or longer term. Regardless of economic conditions, employers cut staff for various reasons. It is unlikely that you will work for the same employer from college graduation to retirement the way some in previous generations did. You could face a sudden change in your employment status at any point in your life. Human resources and career experts say it is important to be prepared and to understand your position.

1. Understand the differences.

“We have to let you go.” This phrase no employee wants to hear can also be accompanied by some confusion. There are some important differences between being furloughed, laid off or permanently terminated, according to the Society for Human Resource Management. Not all employers make accurate and consistent use of the terminology, so it is also important to understand the context of the separation. If you find yourself having this conversation with your employer, be sure to ask questions to figure out what it means for you. 

Terms you should know:

  • Furlough: A temporary reduction in hours where an employee remains on the payroll but isn’t actively working or is on a reduced schedule. In some cases, an employee may be furloughed without work for weeks or months. Alternatively, an employee may work fewer days a week and take home a smaller paycheck. Furloughed employees may have an easier transition back to work because they remain on the payroll and usually maintain benefits like health insurance.
  • Layoff: A layoff is usually a temporary dismissal, during which the employer intends to rehire the worker. Layoffs often convert into a permanent separation if the employer doesn’t rehire the employee. Layoffs often don’t have predetermined time periods, and could last for weeks to months. They occur when work is no longer available at no fault of the employee. Usually, a layoff means an employee is removed from the payroll and stops receiving benefits such as health insurance.
  • Permanent separation: A termination without intention of calling the employee back. Depending on the context, this type of termination could include a so-called “reduction in force” or a firing. Employers can offer reasons such as elimination of a particular position, budgetary constraints, misconduct, violation of company policies or an employee not being the right “fit” for a role.

It is important to understand the distinctions. A clear understanding of whether you are being furloughed, laid off or permanently terminated could mean the difference between having health-care coverage or not.  

If you are laid off or fired for reasons unrelated to conduct, you will typically lose your health-care coverage, though you may be able to continue your existing plan under Cobra, or the Consolidated Omnibus Budget Reconciliation Act, a federal law that allows employees to continue their employer-provided health insurance. However, you will probably have to foot the bill for 100% of the cost of the plan.

Under furlough, on the other hand, employees usually keep their health-care benefits, but not in every case, says Amber Clayton, HR Knowledge Center Director at Society for Human Resource Management. She says that some employers’ health-care plans only cover employees who work a certain number of hours a week, which could mean furloughed staff lose eligibility. 

Employers and workers should both keep a close eye on the language in their insurance policies in the event of a furlough.

2. Think about what is next.

Loss of income is a big financial burden for most people. A 2019 study by the Federal Reserve found roughly four in 10 Americans wouldn’t be able to come up with $400 in a financial emergency. It is important to come up with a plan to support yourself during your period of unemployment, whether that means taking out a loan, filing for unemployment benefits or taking on a different type of work than you are used to.

The next-step checklist:

  • Communicate with your employer. If you have been furloughed, check in regularly with your manager to get updates on the timeline for when you can return to work. If you were laid off or your position was permanently terminated, don’t be afraid to ask HR if there are other opportunities or open positions at the company that you can explore.
  • Get your finances in order. Even if your separation is a temporary layoff or furlough, you can and should look for other work. This is also a way to ensure that you get at least partial unemployment benefits, which you can apply for at your state’s unemployment insurance office. Some states require applicants to prove they have been actively looking for work. You have every right to work another job while you are furloughed.
  • Look for different types of work. If you are having trouble finding open positions similar to your last one, start thinking outside the box. “Think in terms of a portfolio rather than thinking in terms of a singular skill, singular professional, or singular career,” says Dr. Nadya Zhexembayeva, founder of Reinvention Academy, a consulting firm focused on helping clients embrace change.

After you are laid off, furloughed or terminated, think about how you can use the time to diversify your skill set. Consider taking on a new kind of job that you might not have considered before. “Think of it as an opportunity to develop a skill and get paid for it,” says Dr. Zhexembayeva. She compares our career paths to journeys. “We all have a kind of bigger project, like a highway, but we also have country roads in the form of little side hustles.”

3. Shift your mind-set.

It is normal to feel anxious or upset about the loss of a job, especially when it contributes to financial stress. Try to channel your negative energy into positive action as much as you can. Remember that change is normal. 

On average, U.S. employees had spent a little over four years in a job in January 2020, according to the Bureau of Labor Statistics. For workers ages 25 to 34, that average was just 2.8 years.

“If you are changing careers by choice or because somebody made that choice for you, the No. 1 thing is to stop thinking of it as something shameful,” says Dr. Zhexembayeva. “You are living in the world, and you will be facing a lot of disruptions. It’s not the fact that you avoid the disruptions that make you [a] success, it’s the fact that you stand up and keep going that makes you successful.”

Try these tips for positive thinking:

  • Write down your strengths. Make a list of your professional wins over the past year and use that to structure an action plan on how you will do more of it.
  • Practice mindfulness exercises. This doesn’t just have to come in the form of meditation. Any repetitive activity that you don’t find stressful will do, from running to cooking.
  • Get creative. Think about the skills you have that you could monetize. Do some research on how other people have made money with the same expertise. 
  • Your local unemployment office. Not only can you file for unemployment benefits there, but these offices often offer resources to job seekers such as résumé-writing courses and interview practice. 
  • Try a “Fear to Action” exercise. These free exercises can help you figure out the next steps you can take by drawing connections between your fears and their potential impact.
  • LinkedIn and Glassdoor. Set job alerts for your industry.
What to do next

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