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What’s the Difference Between a Termination versus a Layoff?

I got into a discussion last week with a friend about the difference between a “termination” and a “layoff.” Fortunately, neither one of us is dealing with it and so it was more of an academic discussion. It was part of a discussion about the Worker Adjustment and Retraining Notification Act (WARN Act) and how employers with 100+ employees must notify workers under certain conditions if they may lose their jobs. It covers plant closings (if they are planning on closing a site and the shutdown will affected 50+ employees during any 30 day period) as well as mass layoffs.

What I didn’t know was that there is a small difference between a layoff and a termination. Technically, a termination is when you fire someone and there’s no chance they’ll be rehired at a future time. A layoff is when someone is let go because there isn’t enough work and could be rehired if business improves. You say potato, I say potato… OK that doesn’t work in print but you get the idea.

Outside of an academic difference, there are unemployment benefit ramifications but those vary from state to state. Usually, if you’re terminated for cause (that is, fired for a good reason), you may not be eligible for unemployment benefits. For example, if you were fired because you stole something, failed a drug test, or some other violation – you probably won’t get benefits. If you were fired because there wasn’t enough work, then you’d be eligible. For example, Maryland has extensive rules regarding this [3] and you’re welcome to review it. 🙂

Beyond that, people use the terms interchangeably at times. “Being laid off” sounds better than being “terminated,” and technically it is because it’s not your fault you’ve been laid off, but either way you’re out of a job.

(Photo Credit: tendolab [4])