As industries around the world are feeling the effects of the Coronavirus, many companies have made the choice to furlough all of their workers or a portion of them to cut costs as their business drops. What is a furlough? A furlough is a temporary, mandatory and unpaid leave of absence from your job. Furloughs, while inconvenient for workers, are often preferred to lay-offs. There are four key differences between lay-offs and furloughs:

  • Furloughed employees will most likely return to work. An employer will often give a date or a condition when work can resume.
  • Furloughed employees will still retain access to their benefits, such as healthcare and life insurance.
  • A public employee who has been furloughed will retain their employee rights. This means that you have the right to return to your position if you choose to when work can resume.
  • Furloughing is a much easier process than laying off employees. It requires less paperwork and furloughed employees can come and go easily.

Know that you are not alone in this struggle. Many industries began furloughing their employees last month and more furloughs are expected. Here are just a few industries who have been hit hard by the Coronavirus:

  • Travel and Hospitality: Marriott, the world’s largest hotel company, plans to furlough thousands.
  • Airlines: While they have not furloughed yet, airlines are threatening a furlough if they don’t receive aid from a stimulus package.
  • Retail: Macy’s CEO announced that it was furloughing most of its staff.
  • Entertainment: AMC Theatres furloughed approximately 26,000 employees across the country.

When you are furloughed, you are banned from doing any sort of work on behalf of your employer. Even something as little as a 5-minute phone call can break this “No Work Rule.” If a salaried employee does any sort of work, their employer must pay them the equivalent of a day’s salary. If an hourly employee does any work, their employer must pay them for the time they worked. This means that if you are furloughed, you will most likely lose access to any of your work accounts or devices for the duration of your furlough. This will keep even the most well-meaning employees from breaking this rule.

Your Rights During A Furlough

  • You have the right to seek new employment. Some employees may also take second jobs while they are furloughed to keep their income stream constant. Always check your employee policies to make sure you are allowed to do this. Employers can enforce those policies even during a furlough.
  • Some workers may take unemployment benefits for the time you are furloughed. This can differ from state to state. Check your state policies to make sure you are allowed to collect and whether or not you are responsible for paying back your benefits when your job resumes.

How Can I Survive a Furlough?

A furlough can often be unexpected, so it can be difficult to prepare. Even when you are still employed, there are always steps you can take to prepare.

  • Consider what you’ll save. If you aren’t going in to the office, you’ll save on gas and dry-cleaning.
  • Set a budget and trim it if necessary. Pay attention to things that you pay for, but don’t use. You can cut those in the event of a furlough.
  • Cut unnecessary expenses like cable, a land-line, or eating out. This will put more money in your pocket for necessary expenses like AC or a mortgage payment.
  • Cut back on food costs. Making a list can help you spend less at the grocery store. You can also use coupons and buy generic to save a little extra.
  • You can dip into your savings, but be cautious. While a furlough would be considered an emergency, cut back your spending first and only use your savings if absolutely necessary.
  • If your state allows it, apply for unemployment compensation or loans.
  • If you have been furloughed and need cash now, you can withdraw money from your 401(k), IRA, 403b, 457, or SEP IRA without the 10% withdrawal penalty if you are able to repay the withdrawal within three years of the date of withdrawal.
  • You can also create a personal pension. All pensions are annuities that companies purchase on behalf of the employee. You can create your own fee-efficient and tax-deferred annuity by buying your own pension.

As always, it is important to talk with a financial advisor that you trust if you are unsure what options are best for you. A furlough is inconvenient and scary, but there are ways that you can get through it without going into debt.


Active Wealth Management is a private wealth management firm located in Atlanta, GA. Our team is passionate about educating clients in order to empower them to invest and retire successfully and we believe in managing our client’s assets actively. Active Wealth Management works with three primary groups of people; pre-retirees, retirees, and business owners.

Active Wealth Management is led by our Founder and President, Ford Stokes, and by our Senior Vice President, Brandy Seats. They aim to help clients understand their current financial situation, analyze their current portfolio, and develop a customized financial plan to accomplish their goals. If you would like more information about the firm, please visit our website,, or call our office at (770) 685-1777. You will not be passed off to another advisor. You will meet with either Ford or Brandy. You can schedule directly into Ford’s calendar by following this link: You can also schedule directly into Brandy’s calendar here: We look forward to meeting with you.