In this recession, companies are turning to furloughs, or unpaid leave, as a way to cut costs without cutting people. As you can imagine, being furloughed is never a good thing. Companies in good financial shape generally don’t furlough their staff, it’s usually companies that need to cut costs or are having difficulty with cash flow. It’s not uncommon for a company to furlough staff one week and then decide they need to have layoffs the next. While that’s not always the case, you plan for the worst and hope for the best.

So, what should you do when you’re on furlough?

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You just lost your job; now what?

The instinctive path is to hit the newspapers and job boards, flooding resumes out to potential employers who might give you a chance. You might follow that activity by contacting recruiting firms to enlist them in your search. If this describes you here is some friendly advice—slow down!

We’re in a recession, a very nasty one by all accounts, and as much as you need a job, it’s important to recognize that you’ve joined a hunt that’s being undertaken by millions of others. This means competition, far more than we’ve seen in the past, and you’ll need to begin thinking long term. If you’ve been out of work for a while, you already know this.

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If you’re out of work or looking to supplement your income, you might want to consider working for the U.S. Census Bureau to help collect the 2010 Census. According to CNNMoney, the 2010 Census will put 1.4 million people to work and projected to cost $14 billion, $212 million in advertising. If you want to make some extra cash and have the time, you might want to get the ball rolling on securing a job with the U.S. Census.

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A friend of mine was recently let go from her job of many years (she recently wrote about it in a two-part series, part one and part two). It’s been difficult watching the news and hearing about the millions of jobs lost in the last year but until one of your friends is fired, it really doesn’t sink in how weak our economy is. It’s one thing to see your 401(k) lose value, an account I can’t touch for forty years, it’s another to see one of your friends lose their job.

The first thing that came to my mind was whether or not she could negotiate a better severance package. She explained that because her employer was a non-profit, she had no legal recourse. I was surprised but upon further research, I learned that there are no laws specifically covering severance. There are laws that cover unfair termination, such as the Fair Labor Standards Act and similar state laws, and severance is mostly seen as a way to placate employees so they don’t consider filing a lawsuit. However, despite this, you can still negotiate a severance package.

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Mrs. Micah recently tackled the topic of whether or not it’s a good idea to take a low paying job (she phrased it differently, whether certain kinds of work are beneath you) and gave three arguments why it was a bad idea: it takes up valuable time while draining you of energy you should be using applying for jobs, they aren’t a true solution and could cause complacency, and the less-skilled job doesn’t look good on a resume.

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I got upset when I read this article about a non-working family in Britain. Actually, I was pretty pissed off to be honest.

The article talks about a 43 year-old woman who lives in a 2 bedroom council flat, which is the equivalent of low-income housing here in the United States, with three children and one grandchild. She doesn’t work and has never worked. The family has had some pretty terrible experiences recently, documented in the article, but my compassion wanes as I hear how they entered the situation.

These lines in the article changed my sentiment completely, which I’m sure you’ll pick out when you read the brief article:

• … But she concedes that she doesn’t really know why she didn’t get a job, and that there was an element of just “not getting round” to it.
• … She doesn’t think school wanted her to stay on because she “wasn’t too bright” and used to bunk off [not attend] a lot.
• … Without any qualifications she assumed she wasn’t able to follow her chosen path and join the Army. She never actually made it to the recruitment office to ask.
• … As no-one in the house is actively seeking work, they don’t count as “unemployed” and none claims Jobseeker’s Allowance [unemployment].
• … “I’m sorry they have to pay tax money to me. If I could get a job… give me a job then and I’ll work, and then they won’t have to pay me.”

The lesson here is that you have to take control of your life. I don’t think she’s lazy but it just sounds like she didn’t try to do anything. She didn’t get a job, didn’t finish school, and all before the whole aspect of family came into play. I can understand not working or going to school to raise a family, but the reality is that none of the children work either! William, her son, was savagely attacked by local gang members, a situation that likely wouldn’t have happened had they not chosen to live in council housing in the first place.

The thing that gets me is that she didn’t even try. None of them did. There are plenty of stories of people who have tried and simply given up out of despair because of the economy. I have compassion for their situation because they’ve tried to change their situation. While this family doesn’t take unemployment (Jobseeker’s Allowance), they also aren’t taking any steps to improve their condition. The daughter sits at home all day.

Am I being too harsh? What do you think?

Losing your job sucks and if you recently lost yours, I’m sorry to hear that but you are not alone (in May 2008, 861,000 joined the already 8.5 million unemployed, which is always undercalculated*). However, we live in the land of opportunity and there’s always something around the corner, so until that corner turns you should consider filing for unemployment benefits.

When people talk about unemployment benefits, you’re really talking about the Federal-State Unemployment Insurance Program and it’s a program you’ve been indirectly paying into with each and every paycheck. Your employer has to pay an unemployment insurance tax that you make claims against if you are eligible (and unemployed). You indirectly pay for the insurance because in the absence of that tax, you could theoretically be paid more (feel free to debate the merits of that argument on your own, either way it’s money that’s rightfully yours if eligible).

The eligibility requirements and benefit payouts vary from state to state. The US Department of Labor has a very handle list of all the state departments, along with address, phone number and website, to help you in your search and claims filing. You can also use this map to locate the proper office to contact.

File today. As soon as you lose your job, file immediately. There is often a two week lag between when you file and when you receive benefits, though benefits are effective as soon as you file (if you are eligible).

It has no bearing on you as an employee. In fact, being eligible for unemployment benefits couple a positive. One of the reasons for denying a claim is misconduct. Though it’s unlikely that an prospective employer would ever find out that you did receive unemployment benefits, if they did they could be reasonably sure that you didn’t get released because of misconduct.

It won’t affect your credit score. Collecting unemployment will have no bearing on your credit history or your score. If you do apply for a loan, it would be reported as unstable income which could cause you not to get a loan. However, if you think about it, unstable income is better than no income so you probably have a better shot at a loan with the benefits.

You need it. Even if you’re in solid financial shape, the reality is you don’t know how long you may be out of work. You may be great now, able to live off your emergency fund for a few months, but eventually your bank account will begin to dwindle. As the balance falls, you will be feeling more pressure at a time when pressure will already be at its highest. It’s important to swallow your pride, get yourself some additional breathing room, and file for benefits that are rightfully yours. Remember, it’s not welfare; it’s unemployment insurance your employer has been paying for.

If you’re reluctant to take a hand out, take it now and consider donating that amount to your favorite charity when you get back on your feet. Good luck.