Unemployment Benefits for Furloughed Employees

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Furloughed employees experience a limbo in the work world. They are still employed by their company, though they aren't working or drawing income while they are furloughed. The time they are furloughed can also create financial problems because they aren't getting paid. Different states consider a furloughed employee's status differently. In some states, a furloughed employee will be able to collect unemployment benefits for furloughed time.


Furlough Conditions

Furloughs are a way for companies to reduce operating costs without permanently laying off employees. During a furlough, an employee does not work and is not paid. The furlough can be voluntary or mandatory. The big difference between a furlough and layoff is that the employee continues to work a relatively consistent schedule that is interrupted occasionally by the furlough days.

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Receiving Benefits

If your state allows it, you can file for unemployment benefits for your time furloughed from work. Unemployment compensation is based on a state formula and your regular pay. The benefits are generally paid out based on your weekly earning, but in the case of furloughed employees, the amount will be pro-rated based on the length of the furlough.


Budget Impact

Furloughs may increase unemployment compensation benefits, but they decrease operating expenditures. They shift the burden from one pot of money to another. Unemployment insurance is a fund of money paid to the state by employers. Furloughs allow employers to shift the burden from their own operating budgets that haven't yet been expended to the unemployment fund, which they have been paying into. When Kansas furloughed 1,490 court employees in 2010, the courts reported that each furlough day saved the state $220,000. Employees get 60 percent of what they would have earned for eight hours of work for each furlough day.


How To Collect

To receive unemployment compensation for furloughed time, employees should filed for unemployment as soon as they know when the furlough will happen. The employee won't be able to collect unemployment for the first furlough period, but having filed, the employee is now eligible to receive compensation during the next furlough time as long as it happens within 12 months of the filing, according to the Pittsburgh Post-Gazette.