What is the difference between furloughing and laying off employees?

Essentially, a furloughed employee remains an employee but with reduced or eliminated work hours, while a layoff generally means a complete employment separation due to the job being eliminated.

However, under the current circumstances involving COVID-19, the California Labor Commissioner may not see a real difference between a temporarily furloughed employee without any work hours and a laid-off employee.

In a pair of opinion letters (Opinion Letter 1993.05.04 and Opinion Letter 1996-05-30), the Labor Commissioner stated that if an employer reduces an employee’s scheduled work hours to zero — and does not reschedule that employee within the same pay period — the employer has effectively laid off the employee, which triggers the final pay requirements under Labor Code section 201.

Read more about Final Pay Explained in the HR Library and Furloughs Versus Layoffs: Is There a Difference in California? on HRWatchdog.

Visit the CalChamber Coronavirus (COVID-19) webpage for more COVID-19-related federal, state and local resources, including CalChamber coverage.

Q&As