Until recently, many people had never heard of the term furlough. Although it’s commonly used in US employment law — it has never been used in the UK until recently, leaving a lot of people confused about what it means.
Furloughing is designed to support businesses that have been badly hit by coronavirus and to prevent large numbers of unemployment. Essentially, it temporarily helps pay the wages of people who can’t do their jobs and helps stop companies from making them permanently redundant.
As countries go into coronavirus lockdown, industries such as retail, hospitality and travel have come to a sudden halt. To cope, many businesses have furloughed their staff and are relying on government intervention to keep them on the payroll.
So what does it mean — and what should you do if you are furloughed?
“Being furloughed effectively means you’re given a leave of absence, with the intention of being brought back into the workforce at a later date,” says Jo Cresswell, careers expert at the job website Glassdoor.
“Think about it as being put ‘on the bench’. Under the Coronavirus Job Retention Scheme, the UK government has committed to paying 80% of employees’ gross wages, up to £2,500 per month per employee, for three months — though this will be extended if the government deems it necessary.
Employers can “top-up” the government payment to match your salary if they choose to. Self-employed workers can also choose to furlough themselves, receiving the same amount of government support based on their previous, average earnings.
“Unless an entire workforce has been furloughed, no-one wants to feel that their job is less valued or less business-critical than others,” Cresswell says. “Added to this are financial concerns; while the Coronavirus Job Retention Scheme has been designed to be a robust buffer, furloughed workers may find that their cash flow becomes very tight.”
Being furloughed can be stressful, particularly if you are worried about the future of your company. Research published in the Journal of Career Development in 2018 found that being furloughed during the 2013 US federal government shutdown was associated with perceived personal resource loss. In turn, this led to decreased life satisfaction and increased work–family conflict and physical, cognitive, as well as emotional burnout five weeks after the shutdown ended.
If you have been furloughed, Cresswell recommends keeping yourself occupied. “While you’re not allowed to work for your employer, you are allowed to volunteer,” she says. “With volunteers needed across all front-line industries right now — think NHS, charities, pharmacies, retail — this could be a fulfilling way to spend your time; keeping yourself mentally engaged while supporting critical industries.”
Other productive ways to spend your time include learning a new skill, studying for a qualification or working on your own personal brand. “All of these suggestions will help your professional development, strengthening your abilities when you’re back in the workplace and opening up potential future employment opportunities,” Cresswell adds.
It’s also important to try and maintain a healthy routine, even if your schedule is out of whack and you aren’t going to work. Stay in touch with friends and family online or over the phone, as social support is important.
From a financial perspective, explore all financial support options available from the government and draw up a budget to ensure you’re living within your means while furloughed.
“As you’re still employed by your company, you should also still be entitled to your usual benefits — such as pension contributions, private medical insurance, and so on — so be sure to check this with your employer as some of these benefits may also help your financial situation,” Cresswell says.