Ask a Lawyer: I Was Furloughed, Laid Off, or Fired Because of COVID-19—What Do I Do Now?

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Here’s a staggering statistic: Nearly 10 million people in the United States have filed for unemployment benefits in the past two weeks alone. To put that into perspective, that’s more than double the population of Los Angeles (which currently has an estimated 4 million residents) and two million more people than currently reside in New York City (with its estimated 8 million residents). Like we said, staggering.

In this installment of Ask an Expert, we tapped two lawyers to answer all your most pressing questions about being furloughed, laid off, or fired in the midst of the COVID-19 crisis. Ahead, Brenda Schamy, the co-founding partner at DiSchino & Schamy, PLLC, and Tara E. Faenza, a labor and employment attorney, walk us through everything you need to know if you’ve lost your job, including available financial relief resources.

Read on to dive into their detailed answers, then keep scrolling to find out how to tune into our next Ask an Expert conversation on Instagram.

I was recently furloughed. What does that mean? Why do companies furlough? 

Furlough is a mandatory suspension from work without pay,  which can be for any time period at the sole discretion of the company. This is a cost-saving method when the company does not want to terminate the employee but can’t afford to pay them. Furloughed employees may not do any work for the company. If they do any work for that company they must pay them for the day if hourly must pay for hours worked. For salaried employees, they must be compensated. Some companies will block access to email and other resources to ensure that no work is being done. It is important to discuss this with the company or with your employees so everyone understands how the furlough will work.  

Do furloughed employees still get paid? 

No, while furloughed employees will not be paid unless work is performed. (see above). 

Is being furloughed actually better than being fired/laid off? Or is it the same thing? What’s the difference? 

In some ways, yes. Although when furloughed the company is not paying you, the assumption (although the company is not obligated to) is that you will be rehired once the company returns to normal.  This may also eliminate the need to re-apply, interview, run background checks, and more. Unlike a furlough, a lay off is a permanent separation from the company. Whether you were furloughed or laid off, if you are an "at-will" employee, you are free to apply and look for other work during this time.

How long can a company furlough an employee? Why do they choose that option instead of firing an employee? 

The law does not define this time frame. As mentioned above, in some circumstances, the intention of the company is to bring the employee back after things return to normal and the company doesn't want to start the process from the beginning. 

Can I collect unemployment when I’ve been furloughed? Can I still apply for other jobs? What are my rights? 

Yes and yes. Your rights are the same as if you were employed as it relates to discrimination, retaliation, and other employment laws. Unless bound by a contract, you are free to look for other work, whether temporary or permanent. If furloughed or laid off and you have certain contractual restrictions such as non-competes you may want to discuss a waiver of these provisions with your employer. However, all applications for unemployment must be truthful. If you are furloughed but maybe now working part-time or other particular circumstances, you must disclose and correctly answer all questions on the unemployment application.

What steps can I take now that I have been fired, laid off, or furloughed? How can I get financial support while I look for work? What advice can you share? 

Stay positive! Look for work or use this time to polish your resume, start a business you've always wanted or freelance! Update your resume and emphasize your flexibility, tech-savviness, and ability to work from home. Also, the CARES Act will provide for unemployment to be increased by $600 additional per week by the federal government and extend benefits for 13 extra weeks. Many lenders (e.g. credit cards, car loans, etc.) will offer forbearance or temporary holds on accounts to delay bills between 1-3 months. Student loans, for example, are delayed during this time. Additionally, the CARES Act provides for direct financial assistance to Americans in the form of a one-time direct payment in the amount of:

• $1,200 for individuals earning $75,000 or less, 

• $2,400 for individuals filing a joint return earning $150,000 or less, 

• $1,200 for heads of household earning $112,500 or less, and $500 per child.

The U.S. Treasury stated that the administration expects to begin direct payments to individuals within three weeks of the CARES Act being signed into law.

Is my job still available when the company goes back to being in a financially stable position? How will I know that time has come? 

This depends on your company and you. The company may not come back, so stay in contact and protect yourself. Do not assume there will be a job or a company to come back to and even if there is it may not be in the same financial position or have the same staffing needs as it was before. For companies who furloughed or took advantage of the CARES Act, and other government incentives, loans, and grants, there are advantages in the form of loan forgiveness, if they take the employee back and meet other requirements. Your company should communicate with you when you are able to return. Should you feel that your company might not make it, you should consider other employment options as soon as possible.

I’m a small business owner and I think I need to furlough employees. What are the pros and cons? Can employees dip into their PTO or vacation balances to be paid during the furlough? 

Pros are that you can keep valuable employees with certain conditions. Employers should check with their benefits provider to determine what is required and see from a state practitioner what is required for furloughs. When you return to "normal," your uptime is faster, your team is in place and ready to work. Cons are that you may end up losing employees who need money and find other jobs before you can return to normal. You may end up paying for insurance benefits for employees during this time, which is also expensive. 

Employees do not need to dip into their own sick and PTO time. Can they? That depends upon your state laws and company policy. A company is not required to advance paid time off that is not yet earned. 

The company is required to pay Emergency Paid Sick Leave for those either (1) quarantined due to sickness or government order and cannot work remotely or in person or (2) is caring for someone who is sick or a child who is not in school. The maximum is (1) $5,110 (100% of base pay) and (2) $2,000 (2/3 of base pay). Some Companies may be eligible to apply for certain loans (which may eventually be forgiven if certain requirements are met)  like the Payroll Protection Program which may lend up to 2.5X a business' average total monthly payroll if the business meets certain criteria.

How do I go about it? What tips can you share? Are there resources or templates I can use to help? 

You can speak to an employment, corporate, or other attorney for help. Accountants and bankers often help with locating the applications for these various programs. The banks are currently developing processes and applications and those may not be available yet but contact your bank to find out more as things continue to progress. Other .gov websites may offer additional insight on unemployment applications and information regarding the CARES Act and its application.

I was recently laid off due to COVID-19 but I didn’t receive a severance package. Is that legal? What are my rights? 

Federal law and most state laws do not require severance or any kind. Failure to pay severance is not unlawful, in most cases, barring an employment contract or union agreement.

I was laid off at work with no notice. Does my employer have to give me notice before laying me off? What are my legal rights?  

With the exception of large companies under the WARN Act, which applies mainly to large companies, most small or medium-sized companies do not need to give notice.

How do I know if my layoff was illegal? Do employees have any protections from being laid off? Can you fight a layoff? 

An employer who lays off may usually do so without legal recourse. However, if the selection of the person who is laid off is due to age, race, gender, national origin, pregnancy, color, religion, disability, or other protected category, the selection of that employee for lay off (who arguably would not have been laid off) may be unlawful. In other words, layoffs or furloughs do not relax the laws relating to unlawful discrimination and retaliation. 

You would be better off working with an employer, rather than fighting (e.g. temporarily reduced hours or pay), if you wish to maintain that employment relationship. Otherwise, "fighting" a lay off would be no different now than if fired for any other reason. You are still terminated, but you will need to prove an unlawful motivation for you specifically if you wanted to file a claim for unlawful termination. However please keep in mind that each case is fact and state-specific and it's best if you feel you were wrongfully terminated to contact an attorney.

What can I do/what are my rights if I think I got fired for no reason? 

In most states, you can be fired for a "good reason, bad reason, or no reason at all..." and it is lawful. If you believe you were terminated for an unlawful or discriminatory reason, contact an attorney to determine your rights.

About the Experts: Brenda Schamy is a founding partner at DiSchino & Schamy, PLLC. She practices a blend of litigation and transactional work. Brenda concentrates her practice in the areas of entertainment, hospitality, branding, fashion, art, startups, and general business dealings. Prior to founding her own law firm, which subsequently merged to become DiSchino & Schamy, PLLC she was a Miami Dade Public Defender. Brenda is currently licensed in Florida, New York, District of Columbia, and Michigan.

Tara E. Faenza is a labor and employment attorney who represents companies and employees in employment and labor disputes and advises clients in all aspects of employment law, as well as and general litigation matters. Ms. Faenza represents clients in pre-litigation counseling before the EEOC and the FCHR, as well as in state and federal court. Ms. Faenza is an aggressive and skilled federal and state court litigator, having served as a trial attorney and former prosecutor for the Miami-Dade State Attorney’s Office, where she tried over twenty cases to jury verdict.

DISCLAIMER: The information here is not legal advice. Legal advice is fact-specific and can differ from state to state.  

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Follow Create & Cultivate on Instagram, check out our Ask an Expert highlight reel for the schedule, and hit the countdown to get a reminder so you don’t miss out. See you there!