When Employers Should Enact Furloughs or Layoffs
When Employers Should Enact Furloughs or Layoffs
When Employers Should Enact Furloughs or Layoffs
By Susan M. Heathfield
May 19, 2020
Summary
Furloughs are a temporary reduction in headcount. When you furlough employees, you do so with the expectation that you will recall them.
Why a Furlough Makes More Sense
In several situations, a furlough makes more sense than a layoff. For instance, if your business is seasonal, you can furlough employees during the downtime and then bring them back during your busy season.
You cannot require your employees to wait for the furlough to end; They can find a new job.
Consequences of Employee Furloughs
Furloughs can help employers manage short down periods, but there are consequences. Your employees may build resentment during furloughs—especially if they receive no pay at all. Cutting staff may also affect your ability to run your business in the future.
If your organization is unionized, you will have strict rules for furloughs in your union contract. If your agreement doesn't allow for what you want to do, you'll have to renegotiate, which can be a complicated process.
Furloughed employees also have rights that terminated employees do not have. For instance, non-exempt employees must be paid for all hours worked.
When Layoffs Are Necessary
Layoffs should be permanent terminations. Whether it's a reduction in force, where you let go of people with the express purpose of reducing headcount, or a reorganization where you terminate people in one group but may hire people in another, the people who lose their jobs should expect that the action is final.
Like furloughs, layoffs can be financially and emotionally difficult for employees. Furloughed employees will come back, so you'll need to focus more on keeping them happy while they are off work.
Reference
Heathfield, S. (2020, May 19). How Do Employers Know Whether to Enact Furloughs or Layoffs? Retrieved May 22, 2020, from https://www.thebalancecareers.com/when-employers-should-enact-furloughs-or-layoffs-4845564