Furloughed due to the coronavirus? Here’s what you need to know

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Millions of U.S. workers are being furloughed as the coronavirus brings the economy to a virtual standstill. Those emergency measures are likely to continue as some states extend orders to close non-essential businesses, leaving workers questioning what it means to be furloughed. 

The simple answer: “It’s a mandatory, temporary, unpaid leave,” said Misty Guinn, director of benefits and wellness at benefit-software company Benefitfocus. 

Companies ranging from hotel giant Marriott to retailers such as JCPenney are turning to furloughs as the pandemic takes a toll on everything from travel to in-store shopping, with more than 40 states now imposing stay-at-home orders. For most private-sector workers and their families, furloughs may be unfamiliar, given they’ve most recently been tapped by the U.S. government during budget impasses rather than corporations that have long turned to mass layoffs when times get tough.

“Many of us know what ‘laid off’ means. Many people might have been in that situation throughout their lives,” Guinn said. “Companies are looking at furloughs because they do help reduce the labor costs without adding in new ones.”

For instance, companies that lay off workers typically pay for severance and outplacement services, and then later may face costs when they’re ready to hire again. But furloughs don’t bring those costs and could help companies get back up to speed quickly when they can bring workers back online. 

Macy’s, Kohl’s, Gap to furlough thousands of workers as pandemic worsens

But there are plenty of questions about how furloughs work, given that they can vary from company to company, according to labor and employment attorney David Barron. 

Here are the basics, as well as questions to ask your employer if you are furloughed. 

Furlough versus layoff?

A furlough means “you are still an employee —there’s just no work,” Barron said. It’s different than layoffs, which usually indicates a company is permanently firing workers and likely eliminating their positions. 

When workers are furloughed, they generally lose their incomes during the period they’re not working. After the furlough ends and workers resume their jobs, they’ll also typically start back at the same income and job position as before they were furloughed.

By comparison, a laid off worker may receive some severance pay from their former employer, but otherwise the company will cease paying them. 

Can furloughed workers collect unemployment?

Yes, said Michelle Armer, chief people officer at CareerBuilder. But the amount of unemployment benefits that furloughed workers are eligible for varies by state, she added. 

“It’s important to note that the difference between a furlough and a layoff does not matter for unemployment eligibility, because unemployment generally considers each workweek and if a worker is making money or not in order to determine eligibility,” Armer said.

Furloughed workers will be eligible for the additional $600 per week in federal unemployment benefits that was authorized by the $2 trillion stimulus plan passed by lawmakers last month. Once a furloughed worker returns to work, those benefits would end. 

When should I sign up for unemployment?

File for unemployment on the first day of your furlough, Guinn advised. Typically, there’s a one-week waiting period before jobless aid kicks in after signing up, but many states are waiving those delays.

Of course, many furloughed workers are reporting problems filing for unemployment due to state agencies being overwhelmed by people seeking help.

The outlook for record unemployment numbers

“I’m telling my clients, first of all, if you want to go online, set your alarm for 2:33 a.m. or something way off hours, so you’ll get in,” said Scott Warrick, a human resources expert and attorney. 

The good news, Guinn said, is that once you are registered for unemployment, your benefits will be paid to you retroactively. In other words, if the state requires additional time to process your claim because of the surge in workers filing for unemployment, your first benefit check should cover you from when you were furloughed. 

“It might be a couple weeks before that check gets to you, but it will start the first day of your furlough,” she said. 

What about my health insurance plan?

It depends on your company, but HR pros and labor attorneys say most companies that are furloughing workers are continuing their health care plans. However, it will depend on your employer and its policies. 

The spread of the coronavirus disease (COVID-19), in Fort Smith

A woman who lost her job waits in line to file for unemployment following an outbreak of the coronavirus disease (COVID-19), at an Arkansas Workforce Center in Fort Smith, Arkansas, on April 6, 2020.

Nick Oxford / REUTERS


Health care coverage should be the most important issue for furloughed workers because “there is no really good process to get health insurance right now,” Barron noted. 

For instance, not all health care exchanges offered through the Affordable Care Act are currently open for enrollment, with the Trump administration deciding against re-opening them during the pandemic. At least nine states, however, including New York and California, have reopened their ACA exchanges in recent weeks — check with your state to see if it is one of them.

Some furloughed workers might be able to qualify for health care coverage through COBRA, although that option is often expensive for workers. Another option is to join your spouse’s or partner’s health insurance plan, if possible. 

Can I find another job? 

Furloughed workers have the right to find additional work, CareerBuilder’s Armer said. “Furloughed workers who don’t want to permanently leave their jobs might be able to find part-time work at grocery stores or warehouses that are hiring.” 

What questions should I ask my employer?

Make sure you know how to keep in touch with your employer and who to go to if problems arise in coming weeks over issues such as health care and other benefits, Guinn said. 

Make sure you know how your company will alert you if a furlough is ended or extended. Because furloughed workers aren’t allowed to work for their employer while on furlough, they might need to supply alternate contact information other than work emails and mobile phones to their employers.

“That uncertainty can add to the stress and anxiety of what’s going on,” Guinn said. 



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