As the coronavirus pandemic continues, you’re likely hearing more reports of companies facing firings, furloughs, layoffs, and even complete closure. There are reports of these announcements being made a number of ways to employees, whether it’s over a video call, social media, email, or a quick phone call. It’s a time of uncertainty, with many wondering whether or not they will still be employed when this is all over.
From your current situation, maybe you’re weighing your options. You’re looking for the most win-win scenario possible and wondering which solution is right for you. Perhaps you keep coming back to the two options of unemployment vs. furlough, but you aren’t really sure of the difference or which is better for your business.
A layoff, or regular unemployment, is when you let go of employees too quickly reduce costs with the hope you can bring them back as soon as its feasible. It eliminates the financial burden for a company because then the employees who were let go are eligible to file for unemployment insurance, which will pay a percentage of their wages.
While an employee is officially let go from an organization with a layoff, they do not lose their job in a furlough. The ultimate goal is the same, to save a company money, but how it is achieved looks different. Staff is still retained, and they will be paid less than usual or not at all, depending on the severity of the situation.
Selecting the Best Option for Your Business
Now that you know the difference, it’s time to determine the right decision for your company. Unfortunately, there is no magic formula that gives you an answer at the end. You have to look at your current financial situation and determine how much longer you can keep going at full capacity and work back from that point.
As you begin to assess the state of things, you can see if you have the resources to keep your team on furlough and offer some salary if possible until the upswing occurs. This can help you save money while not potentially losing your people.
If it seems like you are going to hit rock bottom quickly, laying off your staff may be the hard but right course in this situation. By doing this, you remove the financial burden of their salaries and benefits but still give them the option to receive UI in the downtime. Unfortunately, since the job isn’t guaranteed and they have to be looking for work to qualify for unemployment benefits, you may not get them back when you begin hiring again.
Get the Support You Need with Unemployment Tracker
Right now, we are living in unprecedented times that are forcing you to make decisions you never thought you would have to do. If you’re in need of extra assistance with handling unemployment claims, contact Unemployment Tracker today. We can help you manage your claims and save you money with a solution that matches your budget.