What’s the difference between a furlough and a layoff and what is “force majeure?”
As the coronavirus crisis continues to develop, we are starting to notice a bunch of confusing words that we need to understand as they could directly impact our lives and our future. Here are a few, explained.
Paid leave vs. furloughs vs. layoffs
Paid leave: An employee gets time off but continues to receive pay and benefits.
- Starbucks offered employees 14 days of “catastrophe pay” (even if they’re not sick).
Furlough: When an employer temporarily suspends an employee without pay but often continues to provide benefits.
- Big companies like Macy’s, Marriott, and Gannett have together furloughed hundreds of thousands of workers.
Layoff: When an employer indefinitely dismisses an employee.
- Companies of all sizes, from General Electric to Bird, have instituted layoffs of as much 30% of their workforces.
Shelter in place vs. lockdown vs. quarantine
Exact rules vary by location (check The New York Times’s running list here), but generally:
Shelter in place (AKA “stay at home”): Residents are asked to remain in their homes (except for essential travel).
- All but 6 states had imposed some type of stay-at-home advisory as of March 30, but they typically lack enforcement mechanisms.
Lockdown: Residents are required to stay in their homes (except for essential travel). Nonessential businesses are often required to close. These orders are sometimes enforced by fines and military personnel.
- France and Italy are both requiring citizens to get certificates to leave their homes (even for essential travel).
- No US states had imposed a full lockdown (as of March 30), but several counties in the Bay Area imposed fines for noncompliance.
Quarantine: Residents who have been exposed to or infected by the virus are required to limit their movement.
- Florida and Kansas are requiring travelers from hot spots (like New York and California) to self-isolate for 14 days.
- Hawaii and Rhode Island are requiring all travelers to self-isolate for 14 days.
One other important term to know:
Force majeure: A clause in a contract that lets a company off the hook for obligations in the event of an unforeseeable catastrophe (like, say, a global pandemic).