The novel coronavirus has spread across the globe like wildfire, infecting more than 16 lakhs people globally as of today. The USA is one of the most affected countries by COVID-19. The global death rate with the outbreak of coronavirus is also increasing rapidly. With no sign of a confirmed vaccine for the coronavirus until now, we are left with no option but to practice social distancing, pausing our daily outdoor activities.
The outbreak of coronavirus is affecting the economic condition of the world, as well. As most of the services are temporarily discontinued due to the lockdown, employees are either facing layoffs or furlough. The question that arises here is what is a layoff, and what is a furlough?
What is A Layoff?
When you are laid off, you will no longer work as an employee for the company. Being laid off by your employer can be either a temporary or permanent situation. A laid-off employee can no longer avail of the company benefits. Once you are being laid off, it means you are no longer officially an employee. However, it is up to the employer whether the laid-off employees should receive any reimbursement or not.
What is A Furlough?
Furlough is a better version of a layoff, where an employee is only temporarily let go. It is like an employee is sent on unpaid leave indefinitely. However, it totally depends on the employer when a furloughed employee will come back to work.
A furloughed employee is technically still an employee and can avail of the company benefits such as health insurance.
Reason of Layoffs in Times of Coronavirus
As we all are well aware of the current situation with the outbreak of coronavirus, companies are forced to close temporarily. The companies that deal directly with customers are the most affected in such times. Private sectors such as aviation, eateries, and any other service-related companies are announcing layoffs of their employees. Since the employers see uncertainty in their business due to the pandemic, they are laying off the employees.
Reason of Furloughs in Times of Coronavirus
The outbreak of coronavirus has crippled the human race. The main reason that some are furloughed instead of being laid off is because of their expertise or because of the field.
Point to be noted is that the reason behind the laying off of the employees has nothing to do with their capabilities as an employee. Since the companies are running minimally with few resources, hence the employers are sorting their employees accordingly according to the services.
Is Furlough Better Than Layoff?
Furlough is better than a layoff because you are still an employee one way or the other, only not working for the company until further notice. But, the tricky part is, that furlough may turn into a layoff in time. So, being furloughed by your employer can be a risk too, no matter what.
The chances of a furloughed employee to go back to work depends upon the financials and requirements of the company. Also, point to be noted that a furloughed employee is also an unemployed person with higher chances of going back to work than a laid-off employee.
The outbreak of coronavirus has put everyone in a difficult position around the globe. Millions of people have lost their jobs in 2020 as the companies are not able to function normally due to lockdowns. The USA is reported to have about 6.9 million unemployed people after the virus hit the country severely. Employees are either being laid off or being furloughed by the companies such as Macy’s, Yelp, Tesla, Air Canada, Everlane etc.
Some employers are also providing the laid-off and furloughed employees with compensation due to the untimely unemployment situation. Many organizations are providing medical benefits especially vaccination for their present and ex-employees as well as their families.
With newer variants of the virus threatening further infections among the population. This can in turn cause a prolonged period of lockdowns which can prove to be abysmal for the global economy and people at large. Some companies have responded to this crisis by providing onsite testing for their staff. Bulk pricing for corporate and event Covid testing in Austin and other US cities help make ongoing tests affordable and workplaces safer for staff and customers alike.
The unemployment rate of India has also increased shockingly in April 2020 up to 23 percent from 8 percent. The daily wagers of our country are the biggest victims with nationwide lockdowns due to coronavirus.
According to a report by the UN, workers engaged globally in four particular sectors will face the most negative impact of COVID-19. These four particular sectors are food & accommodation, retail and wholesale, manufacturing, business service, and administration.
This pandemic situation has put the economic condition and the employment status of the world in grave danger. This has forced the companies to lay off or furlough their employees and run with a minimum number of employees to cut down on the expenses. So, if you are being laid off or being furloughed due to this pandemic situation, don’t be too hard on yourself. Utilize this time and see it as an opportunity to rediscover your long lost hobbies or interests and spend quality time with your family and make the most out of it.
Also read: Impact of Coronavirus Pandemic On The Global Economy