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Furloughed or laid off? What's the difference?

What does it mean for your pay, benefits and future job prospects?

As the coronavirus pandemic has cost millions of Americans their jobs, you may have heard two different terms being used to describe these cuts: furloughed and laid off.

What's the difference and why is there a difference?

According to Fortune, a furlough is basically an unpaid leave of absence and is often seen as a temporary measure. The person is technically still employed, but is not getting paid. The expectation is that the worker may be brought back once the economic rough patch is over. 

A furlough is beneficial to the company as it does not have to seek out, hire and train new people when it needs someone later. It can get back up to full speed faster.

Being laid off is generally considered a more permanent measure, according to Fortune. There is no expectation that the worker will automatically be brought back when things get better.

The federal Worker Adjustment and Retraining Notification (WARN) Act "requires employers who are planning a plant closing or a mass layoff to give affected employees at least 60 days' notice of such an employment action." 

Bloomberg Law says that an employer who has stopped paying for health care coverage for a laid off or furloughed worker must allow that person to remain on the company's health plan for 36 months under federal law. Some states may have varying rules.

As Merriam-Webster points out, the terms furlough and layoff have been known to be used interchangeably, so it's important for an employee who is told they are being let go to get the specifics of what their release from the company means down the road.

Furlough and layoff are different from being fired. When an employee is fired, the relationship with the employer is terminated.

What about unemployment benefits? Can you get them regardless of whether you are furloughed or laid off? It depends on where you live, according to The Street.

"Each state has individual rules for collecting unemployment, including (potentially) waiting periods to collect benefits and a requirement that the applicant show an active job search. Either or both of these may disqualify a furloughed worker," writes Eric Reed for The Street.

Regardless of whether a worker is furloughed or laid off, those who qualify for unemployment will be eligible to receive the additional $600 per week in benefits that Congress approved in the $2.2 trillion stimulus package signed last week. The $600 benefit lasts through July 31. It also provides an extra 13 weeks of coverage for people who have exhausted their existing benefits. This also covers part-time, self-employed and gig economy workers. 

RELATED: VERIFY: No, the House of Representatives did not slip a pay raise into the stimulus bill.

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A person's employment status also does not affect their ability to receive the $1,200 per person or $2,400 per couple one-time payment from the government that will start going out in a few weeks. That money is only contingent on a person's income. An individual making $75,000 or less, or a couple making $150,000 or less, is eligible for the full amount. The amount lessens gradually up to an income of $99,000 individually or $198,000 for a couple. Just about anyone who has made more than that will receive nothing.

The Associated Press contributed to this report.

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