Furlough Unemployment Benefits

Furlough Unemployment Benefits

Updated 30 December 2020

Written by Vicky Miller

Furlough is when an employee is required to stop working for a period of time by their employer.

It is a tactic used during times of economic downturn and, more recently, during the COVID-19 pandemic.

Workers remain employed and the expectation is that they will return to work when it is possible to do so. Furlough can be both short and long-term.

Workers do not have an automatic right to be paid by their employer during periods of furlough. Some federal workers can expect to receive back-pay but for most workers, their time off will be unpaid.

So, what benefits can you claim while on furlough? Find out here.

Is It Possible to Claim Benefits Whilst on Furlough?

It is possible to claim unemployment benefit (otherwise known as unemployment insurance) whilst on furlough.

During the COVID-19 pandemic, unemployment insurance has been increased. Due to a bill called the CARES Act, $600 a week can be claimed in addition to the standard amount dictated by each state.

What Is the CARES Act?

In March 2020, a $2.2 trillion relief package called the Coronavirus Aid, Relief, and Economic Security (the CARES Act) was put in place.

The bill was passed by Congress and signed into US law by President Donald Trump on March 27th 2020 as a response to the negative impact the Covid-19 pandemic was having on America’s economy.

The CARES Act allows furloughed workers to collect unemployment checks and aims to provide additional financial aid, including increased unemployment insurance benefits.

How Do Workers Know if They Are Eligible?

Eligability is based on the following:

  • An employer requires a worker to be furloughed for a while due to the COVID-19 pandemic.
  • The state in which the application is made has entered into an agreement with the US Department of Labor (DOL).
  • The state specifically must have entered into an agreement under section 2104(a) of the CARES Act with the DOL.

Benefit Payments

In addition to the state-administered unemployment benefit which is available for 39 weeks (up to December 31st), the CARES act has made an extra $600 per week available to eligible furloughed workers, payable up to the end of July 2020.

This was federally provided and should not have impacted on standard state benefits.

Furlough Unemployment BenefitsFurlough Unemployment Benefits

How to Claim Unemployment

Unemployment insurance is available to all workers who are unable to work or lose their job through no fault of their own.

During the COVID-19 pandemic, furloughed workers can claim this in addition to the $600 support provided by CARES.

You can contact the State Workforce Agency or the state Unemployment Insurance office to speak to experts who can assist you with your claim.

Each state has varying eligibility criteria for claiming unemployment insurance. Applications can be made online, by phone or in person.

How Much Unemployment Insurance Is Available in Each State?

Unemployment benefit amounts vary from state to state. The average claimant can expect to receive $387 per week (data from the US Labor Department as of year-end 2019).

The figure varies significantly from state to state and is not always reflective of the cost of living.

Last year, Mississippi paid out on average $213 per week, according to data collection. Massachusetts, in comparison, paid on average $555.

You can select from the drop-down menu on careeronestop.org for information on how to claim in your specific state.

How Long Can Unemployment Benefits Be Claimed For?

The duration benefits are payable also depends on the state in which the claim is made.

Most states will provide 26 weeks of payments under normal circumstances.

During the recent pandemic, the length of time unemployment insurance can be claimed has been extended to 39 weeks.

What Other Benefits Are Available During Furlough?

Working During Furlough

Furloughed workers may seek alternative work; however, additional earnings may impact eligibility for benefits or amounts payable.

Arrangements for reduced hours may be put in place with ‘top-ups’ using state aid related to the current pandemic.

Health Benefits and Furlough

Some businesses will not automatically continue to provide workers with their health care plans during times of furlough.

HR experts have advised that these should continue but will depend on the policies of individual companies, so it is best to check contracts or consult with the company directly.

Affordable Care

It is estimated that almost 28 million individuals in the United States have no health insurance.

Nine states have opened up their health care exchanges under the Affordable Care Act this year, despite the Trump administration deciding against reopening exchanges under ACA during the pandemic.

These nine states include California, Colorado, Connecticut, Maryland, Massachusetts, Nevada, New York, Rhode Island and Washington. Some of these states have opened up enrolment only for those who have no coverage whilst others are only on short-term plans that don’t offer comprehensive benefits.

Some workers may be entitled to health care coverage under COBRA. This option can work out significantly more expensive but does provide workers the option to continue with a health care plan for limited periods in some circumstances such as job loss.

This option is available to workers who are furloughed due to the pandemic.

Another option to consider is to be added to a spouse or partner’s health insurance policy where allowed.

Sick Leave and Furlough

Furloughed workers have no entitlement to paid sick leave or expanded family and medical leave.

If working reduced hours, paid sick leave cannot be used to make up an employee’s missing income.

Final Thoughts

Furlough offers flexibility and aims to keep people in jobs, whilst affording them the state support they need in times of crisis. It can also take some pressure off businesses struggling to provide wages.

Each state has different rules around collecting unemployment. It is important to seek expert advice related to each specific state to check eligibility and entitlements so the maximum amount of unemployment benefits a worker is entitled to can be claimed correctly during times of furlough.