What is the difference between a furlough, a layoff, and a reduction in force?

Many employers are facing hard times and must make some tough decisions in this uncertain world right now. Employers are trying to figure out what they can and cannot do as it relates to employees.

A furlough is an alternative to a layoff. It usually requires employees to work fewer hours or take some unpaid time off. Most employees will retain benefits and some job security.

A layoff is a temporary separation from payroll. Usually, an employee is laid off because there is just not enough work to do. An employee may be called back to work if times get better. Employees can typically obtain unemployment.

A reduction in force or RIF occurs when a position is eliminated without the intention of replacing it or there is a permanent cut. A layoff can result in a RIF if the employer decides to cut positions.

In all of these situations, an employee may be able to collect unemployment benefits. An employer should understand what the alternatives are before making these decisions in order to limit their employment liability.