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While the public health threat of the pandemic was terrifying, the economic impact to combat the virus was just as challenging. Record numbers of people unemployed and struggling to find work, make sure they had enough necessities on hand to get through the lockout, or both. An additional challenge of being a worker navigating through the COVID-19 economic environment. Are the different ways in which governments and employers were able to reduce their workforce and how to define leave or some other way to terminate their employment.
Two of the most common situations in which people suddenly find themselves are situations of layoff or temporary layoff. Both categories of employment have significant differences and different levels of eligibility for financial assistance. See how to define leave vs. layoff, so you understand all the options you have if you suddenly find yourself out of work.
Dismissed Workers
When a worker is laid off, it means that he or she is no longer employed at a given company and will no longer receive pay or company benefits, such as health insurance. General Electric announced layoffs of nearly 10 % of its U.S. workforce due to expected impacts on the economy. Sometimes layoffs are temporary and companies rehire their former employees when conditions change. However, this is not always the case.
Depending on the number of employees in the company, laws, such as the Worker Adjustment and Retraining Notification Act (WARN), may require your employer to give you at least 30 days' notice before laying you off. Some employers may also have some type of severance policy to pay laid-off workers, although this is not always the case. However, for most small businesses with fewer than 100 employees, few laws or regulations offer meaningful protection for workers who suddenly find themselves out of work.
Licensed Workers
If a worker is suspended, that means that he or she is still considered an employee of the company. That is under the concept of working very reduced hours, if at all, and will have his or her pay reduced or suspended. Honda Motor Company suspended thousands of U.S. workers at its factories in response to the economic consequences of the crisis during Covid.
Furloughs allow companies to reduce costs during cyclical downturns or a severe economic recession, while retaining an experienced workforce available to restart operations when conditions improve. A furlough is considered temporary; once the downturn is over, companies generally return laid-off workers to their original employment status. However, in some cases where conditions do not improve, furloughs may turn into layoffs.
While licensing is getting a lot of attention during this crisis, it is quite common. The automotive and agricultural industries often use furloughs to keep costs under control. When keeping skilled workers on the payroll doesn't make business sense. Unlike layoffs, furloughed workers often keep company benefits such as health insurance, one of the key incentives to stay affiliated with a company until economic conditions improve. However, this is not always the case and, ultimately, company management teams set the terms of the furlough.
Benefits
In normal times, both laid-off and furloughed workers may qualify for unemployment benefits. However, each state's rules on qualifying for unemployment are different, so you should always check with your state's employment agency to determine if you are eligible.
Workers on leave can and often do seek part-time employment to make up for lost wages. Depending on your situation and the type of employment you perform while on leave, you may even remain eligible for some type of unemployment benefits. Again, check with your state to determine your eligibility for the various types of unemployment assistance available if you find yourself in this situation.
Additional relief for laid-off and furloughed workers may also be coming soon. Be sure to stay updated on any new stimulus acts to make sure you are taking advantage of all the benefits available to you.
Whether suspended or dismissed, understand your current situation and potential benefits available is critical to effectively navigating the current crisis. If you suddenly find yourself out of work, you should continue to check the websites of federal agencies, such as the Department of Labor and the Small Business Administration, to determine if there are new benefits or changes to old ones.
