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3 warning signs that your company might furlough employees — and what your options are if you're put on unpaid leave

Business Insider logo Business Insider 4/3/2020 Abby Wolfe
a person talking on a cell phone © Charday Penn/Getty Images
  • As COVID-19 cases continue to climb, the secondary impact on the nation's workforce has become even more serious and widespread.
  • The unemployment rate is skyrocketing as companies are laying off and furloughing employees left and right - millions have applied for unemployment benefits in just the past two weeks.
  • If business has slowed, your leadership team is meeting more often, or your workload is lighter, you might be at risk of being furloughed.
  • If you are furloughed due to COVID-19, you can file for unemployment and search for alternative work.
  • Visit Business Insider's homepage for more stories.

With each hour that passes, the number of COVID-19 cases climbs. As the incidence increases, the secondary impact on the nation's workforce has become even more serious and widespread.

Countless businesses have shut their doors, either temporarily or for good. Recently, President Trump extended the social-distancing guidelines until April 30 - over a month from now. And Virginia's governor ordered all residents to stay sheltered in place until June 10 - more than two months away.

The unemployment rate is skyrocketing. Pebblebrook Hotel Trust laid off 4,000 employees. Cirque du Soleil let go of 4,500. These are just two examples of many. In just a few weeks, millions of Americans have filed for unemployment benefits.

In lieu of outright layoffs, some employers (like Mattress Firm, Macy's, and Delta) are choosing to furlough their employees instead. This means that they're requiring their workers to take unpaid leave, but guaranteeing them their jobs back when things return to "normal."

a woman smiling for the camera © Jagoda Wieczorek

Unfortunately, this may just be the beginning. "Normal" - whatever that looks like in the future - may not return for a long time. While June may seem far away, NY Governor Andrew Cuomo said things could be this way for nine months, depending on how the country continues to tackle the pandemic.

That's why everyone should be prepared for a potential partial or total loss of work.

"Hope for the best, but prepare for the worst," advised Jagoda Wieczorek, HR manager at ResumeLab, a company that helps job seekers prepare their resumes and cover letters. "Get the lay of the land. Stay vigilant and aware so that you're ready if things get ugly."

Here are some signs that your company may be about to furlough some (or all) of its staff.

1. There's a significant slowdown in business

Joey Price standing in front of a brick building © Joey Price

"Most of the tell-tale signs will be happening behind closed doors," said Joey Price, CEO of Jumpstart:HR, a human resources outsourcing firm for small businesses. "But you'll generally see employers cutting back on vendors, marketing, and non-mission-critical spending in order to preserve employees on payroll."

No matter what role you play in the office, it's crucial to understand the main factors that impact your company's bottom line. Because when that's affected, the spending cuts will begin. If you don't know already, figure out the answer to the following: What are the main drivers that bring in revenue?

If, for example, it's client contracts, and your clients' businesses are affected by COVID-19 in any way, then they might have to terminate services with you.

Or, if you work for an ecommerce site, your organization's bottom line might suffer since more people are losing their jobs and decreasing discretionary spending. (This, of course, depends on what exactly you're selling. Sites offering toilet paper and other items people want and need during quarantine, like books and at-home spin bikes, are probably already seeing an uptick.)

"Many industries are hurting given social distancing measures," said Mikaela Kiner, the founder and CEO of people operations consulting company Reverb. "Nonprofits that survive on donations and grants will also be affected."

2. You see leadership meeting more often than usual

If you're working from home full time now, this one might be hard to spot. But if you're still in the office (or if you have full visibility into your supervisor's calendar), you might start seeing the management team gather more often.

"Closed-door meetings are part of running a business and not always a sign for concern," Kiner explained. "However, given the immediate and substantial impacts of COVID-19, many leaders are having to convene and think about next steps. Likely, they need to rethink business plans and strategies."

Mikaela Kiner smiling for the camera © Mikaela Kiner

Kiner added that, in times like COVID-19, there's a good chance that leaders are meeting to figure out which roles in the company are critical and which are redundant in an effort to prepare for when business decreases.

"Leaders need to quickly assess how the virus has impacted their company to determine how many staff are needed today vs. their original 2020 plans," she said.

3. Your workload has gotten lighter

If it isn't a time of year that your plate is usually a little less full, then this is a pretty glaring sign that business is down. And if that's happening, leadership is going to look for ways that they can decrease their overall spend in order to keep the company alive.

As Kiner said, they're going to be looking for roles that aren't 100% necessary. If you notice your work load is lighter, it could be because they've determined that some of your tasks aren't essential, or they could be transferring some of your work to someone in a critical position in preparation to eliminate your role.

Of course, it's always worth checking in with your manager about this. The amount of work you're assigned could be similar to before, but you're just paying a little extra attention to it now.

What you can do if you're furloughed

These are incredibly uncertain, anxiety-inducing times. And being furloughed on top of that? Talk about stressful. But, as unchartered as these waters may be for you, there are still some things you can control.

a woman smiling for the camera © Leslie Tarnacki

"Although it's a scary time, don't panic," said Leslie Tarnacki, senior vice president of human resources at WorkForce Software. "There are advantages to being furloughed - for you and your financial future. Yes, you'll lose money, but in most cases you'll keep your health and welfare benefits, which can provide relief - especially when dealing with something as unprecedented as the current COVID-19 pandemic."

So, if you end up being furloughed, here are some ways you can take charge of the situation.

Ask your company for as many details as possible

This is your job and your life. You have the right to know how it's going to play out. Because the future is so up in the air for millions of people in the world right now, your employer likely can't give you an answer as to when the furlough will be over.

You'll want to ask your human resources department a few questions, such as:

  • Will they still be providing the same health benefits during the furlough? If not, you'll need to sign up for health insurance through the marketplace as soon as possible.
  • Are you expected to work at all while furloughed? If you're an exempt (salaried) employee, you shouldn't be working at all, unless your employer has furloughed you part time. In that case, you shouldn't work at all on the days or weeks they tell you not to. If you're a non-exempt (hourly) worker, you'll only be paid for the hours you work. "If a no-work rule is instituted however," said Tarnacki, "no workers - exempt or non-exempt - should perform any work during the furlough."
  • Can you use any of your PTO? That way, you wouldn't be working but you'd still receive pay. "Some employers will be happy to let you cash in your accumulated vacation days to soften the blow," Wieczorek explained. "This is not universal, but definitely worth inquiring about." Because it's not universal, you definitely don't want to assume that they'll let you do this. Mattress Firm, for example, is suspending all PTO for now.

Get as many specifics from your employer as you possibly can. They'll likely provide you with some paperwork explaining the conditions. Read it very closely and ask any questions that may come up. Again, this is your life, and you shouldn't be completely in the dark.

File for unemployment

Fortunately, the US Department of Labor has expanded its unemployment benefits guidelines to account for the extenuating circumstances COVID-19 has created. This means that, unlike before, you don't have to be fully laid off to qualify. One of the new criteria stipulates that, if an employer prevents employees from coming to work due to COVID-19 (like in the case of a furlough), those workers now qualify for unemployment benefits.

Even with the Families First Coronavirus Response Act, though, you should still visit your state's specific site, as certain details may vary from state to state.

(Here's a comprehensive guide to applying for unemployment.)

Seek out additional work

It may seem like an impossible feat when so many businesses are shutting down or substantially decreasing their operations. But, believe it or not, there are many companies still hiring right now. Some, in fact, are hiring now more than ever because of COVID-19.

These are mostly essential businesses, like CVS, Walmart, and grocery store chains.

There are just a few things to keep in mind if you do look for alternative employment. First, if you've filed for unemployment benefits and start making any type of income - even if only a small amount each week - you need to report it to the unemployment office when you file your claim each week. As a result, your benefits package may change.

Second, if you accept a new full-time position, you need to leave the job that you're furloughed from.

Lastly, many industries hiring right now are considered to be on the front lines. That means you'll most likely be interacting with people more. While most companies are taking the proper precautions to protect their employees from contracting (or transmitting) the virus, this is still something to consider.

Tighten up your budget

Even if you do apply for unemployment benefits, it might take a little time to receive them. And, the amount you get will be less than what you made when you were working full time.

"If you're not already living on a budget, now's the time to create one," Tarnacki said. "Consider cutting expenses to help weather the storm."

If creating and sticking to a budget seems like an overwhelming undertaking, here's a template that may help. The most important thing is to make sure that you get a good grasp on the exact amount of money you absolutely need to spend each month. Once you do that, you can start eliminating miscellaneous costs.

It's worth noting that keeping a budget is something we should all be doing anyway, even if we are fortunate enough to still be employed.

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