Furlough vs Layoff & Unemployment Options During COVID-19

By: Vanderbloemen

I interviewed Rene Cargile, Senior Manager of Finance, to discuss helpful tips regarding unemployment benefits for employers and employees facing layoffs and furloughs during COVID-19. Rene shared tips and resources to help further understand this challenging situation.

3 Facts About Furloughs 

  • A furlough is considered to be an alternative to a layoff. The theory is to have the majority of employees share some hardship as opposed to a few employees losing their jobs completely.

  • Furloughed employees could be required to work fewer hours or to take a certain amount of unpaid time off.

  • The employee maintains their benefits even while on temporary leave or reduced hours. 

3 Facts About Layoffs

  • A layoff is a permanent separation of employer and employee due to a business' lack of financial resources to maintain a specific position. This is different than being fired because a layoff does not always reflect the quality of employee's work, attitude, or behavior.

  • In a temporary layoff, the employer intends to recall the person when work again becomes available. Set a timeline for recall and terminate the employee if business circumstances do not change.

  • Once laid off, an employee also becomes eligible for insurance through the Consolidated Omnibus Budget Reconciliation Act (COBRA) and they may file for unemployment.

Tip: When you furlough or lay off an employee, be sure to communicate the guidelines, benefits, and options for their situation clearly so they understand exactly what to expect.

Also, take time to write out specific details regarding their benefits and whether it’s a permanent or temporary layoff. Having something in writing for the employee is helpful so they can refer to it if they have any questions or concerns. It can be hard to soak in all of the details during an unemployment meeting, so giving them resources to keep is critical.

Unemployment Benefits for Ministry Employees During COVID-19

Typically, those in ministry and church employees are not eligible for unemployment benefits. However the CARES Act offers financial resources to churches and non-profits impacted by  COVID-19 . 

Additional Resources about Unemployment Benefits: 

  • Workforce Commission for your state

Helpful resource for HR professionals: Society For Human Resource Management & International Foundation for Employment Benefits Plans

We know it's difficult for leaders and employees facing the reality of layoffs and furloughs due to COVID-19. However, when financial crises occur, it's beneficial to know your options and have contingency plans in place to better serve your employees.