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Furloughs or Layoffs?

By Joshua Morby


As the growth in the number of COVID 19 cases in Wisconsin starts to slow, employers are now looking at how and when to reopen. They need experienced employees to get business back up and running and reconnect with customers. Trying to train new employees in such uncertain times could slow those efforts and prove even more costly at a time when companies can’t afford any missteps.

The decision employers make about how they classify or describe the status of their employees may impact the ability of that employee to access and leverage dollars coming from the federal government as part of the stimulus package.

By increasing unemployment benefits during the coronavirus crisis and letting the government bear most of the cost of their unemployment, the federal government has actually created incentives for companies to furlough employees.


As Jeffry Bartash, a reporter for MarketWatch.com pointed out in a recent article - Congress made the payout so generous in part to give businesses an incentive not to cut payrolls permanently. The idea is that businesses would have more room to continue paying health and retirement benefits if they weren’t still covering payroll costs.