Although all are undesirable, there are major differences between being fired or terminated vs. laid off vs. furloughed. There are key differences to the permanency, the ability to collect severance, and the employee’s culpability. In this post, we’ll discuss these differences, the potential reasons for being fired, laid off, or terminated, and some of the rules and regulations surrounding these unfortunate circumstances.
What’s the Difference Between Terminated vs. Laid Off?
There’s a big difference between being involuntarily terminated vs. laid off. A termination is permanent, whereas a layoff can be temporary. Since a layoff is often impermanent, an employee usually cannot collect any kind of severance pay, but a terminated employee can.
The reasons behind being laid off vs. let go are also different. Typically, being terminated/fired has to do with the employee’s poor performance for the business. Being laid off, on the other hand, often has nothing to do with the employee’s performance; instead, it means the business has no further need for the position. A business may layoff a single employee or several employees at once for a variety of reasons.
Potential Reasons for Being Terminated/Fired:
- An employee consistently delivers low-quality work that’s not in keeping with the company’s high standards.
- An employee consistently ignores their manager or the business owner and refuses to follow their instructions.
- An employee doesn’t share or live up to the core values of the business.
- An employee regularly arrives to work late and unprepared.
- An employee harasses their fellow coworkers verbally or physically for any reason.
- An employee exhibits discrimination in the workplace—with clients or within the community.
- An employee poorly represents or otherwise embarrasses the business while not at work, such as through inappropriate social media posts.
Potential Reasons for Being Laid Off:
- The company cannot continue to financially operate at the same level and is therefore forced to remove as many nonessential positions as possible to increase profitability. This is known as company downsizing.
- The company decides to relocate to reduce operational costs. Employees could be laid off because the company decides to hire a completely new staff, or they could be laid off because they cannot uproot their family and move with the business.
- A company is rearranging the structure of the business or removing whole business teams that are either underperforming or superfluous.
- The company increasingly resorts to outsourcing contractors as opposed to relying on their in-house staff. This can sometimes lead to positions not being required anymore.
- The company is acquired or merged with another company. When this occurs, some positions may become redundant, resulting in the layoff of those employees.
Whatever the reason is for being laid off or fired from a position, this can be an incredibly tough time for workers and their families. As a manager or business owner, do your best to give the employee ample notice and respect. Even if you are firing them for their poor performance, it’s important that the business upholds its values and maintains professionalism through every decision and interaction.
While specific rules and exceptions vary from state to state, all 50 states in the US, including Washington, D.C., are “at-will” employment states, meaning employers can fire an employee for any reason and without warning, just so long as the reason isn’t discriminatory or otherwise prohibited by law.
👩⚖️ Do you believe you are facing discrimination at work because of your race, sexual orientation, age, or gender identity? Learn more about Discrimination at Work and Signs You Need a Workplace Discrimination Attorney.
What’s the Difference Between Furlough vs. Laid Off?
A furlough is a temporary but mandatory unpaid leave of absence. If an employee is furloughed, they can expect to return to their job after a finite amount of time. While the employee is taken off of the payroll, they are still considered an employee of the business and may therefore retain their health benefits and protections. Depending on the circumstances, an employee may also continue working during the furlough but at reduced hours.
Furloughs occur when the employer does not have enough work for each of their employees during a slow period or when they don’t have an adequate amount of cash to meet payroll, often due to a government-mandated shutdown, such as the shutdowns caused by the COVID-19 pandemic.
Potential Reasons for Being Furloughed:
- Economic conditions of the employer
- A downturn in the economy as a whole
- Global pandemics 😷
Furloughs cannot affect the entire workforce. Furloughs can affect nonexempt employees (hourly workers), but it gets a little more complicated when furloughing exempt employees (salaried workers). Employers must ensure that if they do furlough exempt employees, they continue to pay them on a salary basis and don’t threaten their exempt status according to the Fair Labor Standards Act (FLSA).
🛑 What's the Difference Between Salary and Wage Professionals?
For nonexempt/hourly employees, a furlough might mean a reduction in hours worked per day, a reduction in days worked per week, or it could mean weeks to months off of work. This is different for exempt/salaried employees, as the FLSA requires salaried employees to receive pay for any week they work, even if they’ve only put in a few hours of work during that week. For this reason, furloughs need to be divided into blocks of at least one week for salaried workers.
It’s up to the employer to set the terms of the furlough. Employers may continue to pay health benefits, as well as set the hours, days, or weeks of the furlough. Employers may also require employees to use up accrued paid time off during the furlough, though since employers are typically trying to save money, furloughs tend to be unpaid.
A furlough differs from a layoff in that furloughed employees are still technically employees of the business, so they retain their employment rights and benefits. If an employee is laid off, they are no longer an employee of the business, and therefore lose all of their benefits.
Another difference is that states typically require laid off employees collecting unemployment benefits to prove they are actively looking for work. Since furloughed employees are still technically employed, they typically do not have to prove they are looking for work to receive unemployment benefits.
While there aren’t different furlough laws by state, some states have relaxed guidelines surrounding unemployment benefits due to the impact of the COVID-19 pandemic. If you are considering writing a resignation letter during a furlough, you are certainly well within your rights to do so, but be aware that you will likely lose your eligibility for unemployment benefits. Carefully consider this decision and speak to an industry professional or lawyer if you are unsure of your rights.
What to Say to Laid Off Coworkers
If you’re thinking about sending condolences to a team member who has just been laid off, it’s important to remember that people experience loss in a variety of ways, and some need more time than others to process their grief. Since it’s a personal process unique to every individual, it’s essential that you consider a laid off coworker’s communication preferences and your own personal relationship with them.
💡 Sending Condolences to a Coworker: Dos and Don’ts for How to Support Them.
If you were lucky enough to hold on to your job, sending condolences to a laid off teammate should be handled delicately, as it’s possible they will feel resentful of their circumstances vs. your own. Tread lightly and always lead with empathy . In some cases, saying nothing at all could be the best way to handle the situation.
Career Resources from Blue Summit Supplies
📚 If you were fired or laid off, it may be time to consider a career transition. Learn how to make a smooth career transition, including how to know when it’s time to make the switch and ideal careers to pursue.
📚 What is a Job Coach? A job coach advises their clients on how to make smart career decisions based on their strengths and weaknesses, the current hiring landscape, industry standards, and what hiring managers are looking for.
📚 Professional development goals keep you moving forward, attaining new heights, and continually growing within your career. Here are some Professional Development Goals to Get Started.
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