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What It Means to be Furloughed

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The government shutdown means a temporary layoff – officially known as a furlough – for millions of federal workers.

More than six million government employees and contract workers may either have delayed paychecks, or no check at all, during the shutdown, according to the National Federation of Federal Employees.

This includes everyone from federal departments in Washington, D.C. to rangers in the National Park Service. The furlough isn’t just for federal employees in Washington, D.C., where there are 160,692 federal jobs, but in places like Alabama, with 39,264 federal employees, and California, with 132,038. Most states have thousands of federal workers.

“Most federal workers live paycheck to paycheck, and they are paid at lower levels than their private sector counterparts,” the NFFE said in a news release. “A shutdown for any length of time is devastating to federal workers and their families.”

If you’ve been furloughed, you already know that it is mandatory unpaid leave from work, but you may still have a lot of unanswered questions. It’s a weird limbo – you’re employed, but not working or collecting a check.

Furloughs come with a lot of different rules, depending on the state you’re in and your employer, even when it’s the federal government.

  • Do you get benefits?
  • Can you collect unemployment?
  • Can you work somewhere else while you’re waiting to go back to work, or even find another permanent job?
  • You may even be wondering if you should check your work email, or finish that project, even though you’re “not really working.”

Here’s a guide on how to navigate those uncertain waters.

What Is a Furlough?

A furlough is mandatory unpaid leave from work, or a reduction in hours. In most cases, it’s for a specific amount of time. Maybe it’s for one week a month for three months. It usually depends on your employer, but in the case of a government shutdown, the length is uncertain.

Once the furlough is over, in most cases, you go back to your regular job.

Businesses furlough employees to save money when revenues have slowed or stopped. The company isn’t paying you, but they want you back when they can pay you again.

“Employee wages and salaries constitute the majority of a company’s operating costs,” Cindy Lo, people operations manager at said. “Furloughs are a way for companies to put a temporary pause on their highest costs so that they can keep their business open.

“They may decide to furlough instead of a layoff because they believe the current situation is only temporary,” Lo said. “They are hopeful that the business will revert back to their previous profitable levels and will need everybody back to work when that time comes.

“Most importantly, they do not want to lose the quality talent they have taken time to hire and train.”

Things are no different when it’s a federal shutdown. Many federal workers may already have first-hand knowledge of furloughs if they were part of the 2018 shutdown that lasted 34 days. Or maybe they worked for a business during the COVID-19 pandemic when millions were furloughed.

Furlough vs. Layoff: What’s the Difference?

A furlough is temporary – you will have your job back when it’s over. A layoff means your employment was terminated and you won’t be going back in most cases. The exceptions are union employees who may have a “call back provision” in their contract, where if the job opens again, they have first crack at it.

When someone is laid off, they often get severance pay and accrued vacation pay. A furlough doesn’t come with any cash attached.

A furlough can turn into a layoff if the situation gets worse. The NFFE negotiated protections for federal employees in that union (more than 2 million workers). After the 2018 government shutdown, the Federal Fair Employment Act was passed. It will protect them from losing their jobs for good if the shutdown drags on or causes shortfalls that lead to layoffs.

Will You Be Paid During a Furlough?

You won’t be paid for the time you don’t work. The point of the furlough is to stop the drain of money when there isn’t any coming in.

Unlike most furloughs though, federal employees will get reimbursed for their furloughed time once it’s all over. The 2019 FFEA made it standard for federal employees to be reimbursed after the budget passed, even if there were cuts that normally would affect the pay they didn’t get while they weren’t working.

The law requires that checks for furloughed federal employees be processed as soon as the new appropriations kick in, regardless of the employee pay schedule.

If the shutdown started in the middle of a pay period, employees will be paid right away for the time they worked in that pay period, another provision of the 2019 law.

Contractors who were furloughed aren’t so lucky. It’s up to the agency they contract with to decide how or if they will be paid.

In a shutdown, civilian federal employees are either furloughed or excepted. Furloughed employees don’t work and don’t get paid until the shutdown is over. Excepted employees work during the shutdown, but don’t get paid until it’s over. Their pay will include any overtime, weekend or holiday differentials they would have normally gotten. But again, it won’t be until after the shutdown is over.

Every federal agency has its own plan for who will work and who won’t. About 800,000 federal civilian employees (out of 2.1 million), were furloughed during the 2018 shutdown.

Before the shutdown, federal agencies filed plans with the Office of Management and Budget, each outlining their plan for how many employees would be furloughed. It ranged from the Equal Employment Opportunity Commission, which planed to furlough 95% of workers to the Treasury Department (which includes the IRS), which only planned to furlough 2.2%.

Congress still gets paid during a shutdown, but their staff doesn’t. The president and Supreme Court justices and appointed federal judges also will collect their paychecks as usual.

During a furlough, protections for business workers don’t exist. An employee likely won’t get back pay when they go back to work. Some employers allow workers to spread a furlough out – for instance take two weeks of unpaid time over the course of 10 weeks, working four-day weeks. In a case like that, the pay would be for the four days of work, not a full week’s pay.

What Happens to Your Benefits During a Furlough?

Some benefits, including health care, are protected for most federal furloughed employees. Federal employees enrolled in the Federal Employees Health Benefits program will continue to be covered, even though their premiums won’t be paid during the shutdown. Once the shutdown is over, the unpaid premiums will be deducted from your back pay.

Retired federal employees will continue to get their premiums on the first of the month. Both Civil Service Retirement System and Federal Employees Retirement Systems payments come out of a trust, not the federal budget.

Federal employees who pay into the Thrift Savings Plan, the federal retirement savings program, won’t contribute to the plan while they are not paid. Like the retirement boards, though, the Federal Retirement Thrift Investment Board is not appropriated through the federal government. That means it will still operate during the shutdown, and those who pay in can take out loans and make investments, and even pay into it. Those who already have loans, with payments deducted from their pay, won’t default, but will have to catch up on payments when the shutdown is over.

During a furlough, what happens to benefits is up to the employer. It can be complicated, since insurance premiums and other benefits come out of the worker’s pay. As with federal employees, some civilian workers may retain health care until the end of the month, some for longer. Employees who are protected by a union may have further protection. COBRA, the insurance continuation for laid-off employees, doesn’t apply to furloughed workers.

“(Health care) is not required, and it’s not guaranteed companies will provide this to furloughed workers, so it will largely depend on your employer,” said Anna Barker, founder of LocicalDollar, a financial resources and literacy website.

Barker said it’s less common for companies to continue to provide benefits that aren’t health benefits to furloughed workers, though there are exceptions.

Can You Collect Unemployment During a Furlough?

You can collect unemployment benefits while furloughed, though every state has different rules that apply. In most cases, you can apply for unemployment the day after you are furloughed. Whether you are eligible and how long it takes to kick in are up to your state. You can look up your state rules in Career OneStop’s unemployment finder.

In some states, it may take weeks to get benefits, so they may not help, depending on the length of the shutdown and what your immediate needs are.

If you do get state unemployment benefits, once the shutdown ends and you are reimbursed back pay by the federal government, you will likely have to pay your state back.

Can You Get a New Job While on Furlough?

Most federal furloughed employees can get a temporary job until the furlough ends, or even get a new one and never return to their old job. If you have been furloughed and are looking for temporary work, it’s a good idea to check with the agency you work for to make sure it’s allowed. Some jobs have restrictions against working for competing businesses, or other job-specific rules.

“When furloughed, the understanding is that your employer plans to resume your employment in the future,” said Biron Clark, of Career Sidekick, a job search advice website. “However, you’re under no obligation to return to that employer. You can leave your job just like you could under normal circumstances.”

Clark, who also worked as a recruiter and HR consultant, adds one important consideration. “Depending on what state you’re in, starting new employment can disqualify you from unemployment benefits or reduce your benefits, even if it’s part-time work,” he said. “Check with your state to know their policies before deciding what to do.”

One place you shouldn’t work when you’re on furlough is for your employer. Some employers cut off employee access to email and other functions, but if you still have access, don’t check company email or do any other work related to your job. Doing unpaid work can cause legal complications for both you and the business you work for.

How to Manage Finances on Furlough

Federal employees furloughed during the shutdown should be sure to get all the information they can from the agency they work for. The NFFE provides resources to employees who are members of that union.

In general, if you are furloughed, one of the most important things to do is make sure any questions you have about benefits, length of furlough are answered by your company. If they haven’t offered information, reach out to the HR department. If you’re in a union, your representatives should be keeping you updated on how it will work for you.

Don’t be afraid to ask. It’s the employer’s obligation to be clear about what your furlough means, so you can do your best to stay on top of your finances, health care and more.

If it works for your situation, you should contact your state’s unemployment office and apply for unemployment benefits as soon as possible.

If you aren’t already on a budget, this is a good time to figure out how much you can spend on necessities, or whether you can at all.

If you have credit cards, this might be a time you rely on them more. If you feel burdened by debt while unemployed, consider reaching out to a credit counselor at a nonprofit credit counseling agency. Credit counseling can help you work on a budget and stay within your means, or even consider debt relief programs, until you’re back at work.

About The Author

Maureen Milliken

Maureen Milliken has been writing about finance, banking, investment, entrepreneurship, real estate and other related topics for more than 30 years. She started as the “Business Beat” columnist for the now-defunct Haverhill (Mass.) Gazette and currently is one of the hosts of the Mainebiz business-focused podcast, “The Day that Changed Everything” in addition to her daily writing. She also is is the author of three mystery novels and two nonfiction books.


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