Furlough vs. Layoff: What’s the Difference?

UPDATE 6/11/20 — an excellent, straightforward article by Accounting Web was released entitled, “How to Help Clients Conduct Layoffs and Furloughs While Mitigating Their Risk“. It explores the differences between various strategies: furloughs, paycuts, and layoffs — and how to navigate which to choose and what pitfalls each entails.


Today’s topic: when times are tough, and you need to put the pause on employment… which is the correct choice, furlough (temporary planned absence) or layoff (more likely permanent dismissal)?

The key, in my opinion, is that a temporary furlough is more likely to allow employees to keep their health insurance benefits. In most states, both furloughs and layoffs qualify workers for unemployment benefits (for sure in Illinois during the current lockdown).

Lots of good info in here — take a read: Furlough vs. Layoff: What’s the Difference? | Gusto.


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