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Get to the Point!

Terms for Not Working and Not Earning Money

By Theda C. Snyder

A lot of people are involuntarily out of work now, and a lot of terms are being thrown around to describe their status. Sometimes the terminology can affect access to unemployment benefits.

Pay Cut

Some employers continue to pay their employees but pay less. This usually happens through a reduction in hours due to decreased demand. The employee works less and is paid less. Some exempt (non-hourly) employees are also experiencing pay cuts.


The second syllable of this word rhymes with “slow.” A furlough is a temporary work stoppage. The employer and employee anticipate the employee will return to work. Sometimes benefits continue during a furlough.


This term initially meant a temporary cessation of employment, such as in industries with seasonal labor needs or in times of economic downturn. Since the 1960s, it has more commonly meant a permanent release from employment without cause, i.e., without employee misconduct. An employer could recall a laid-off employee, but there is no guarantee this will happen. Union members may be entitled to specific benefits in the event of a furlough or layoff, including rules about who gets reinstated.

Reduction in Force

This is a permanent separation from employment without cause. Unlike a furlough or layoff, the employee cannot expect to return to work. This action may also be termed downsizing, right-sizing or restructuring. The reduction in force may be related to a shift to robotics or outsourcing or offshoring of those jobs.

Termination of Employment

This usually refers to an employer separating an employee for cause. Indeed, the employer may provide written notice of “Termination for Cause.” If the termination was without cause, a prudent employee will request a written statement saying so. Voluntary termination is the same as resigning or quitting.


This term is universally viewed as separation from employment for cause.

Words for Employment Status

Specific laws that address separation from employment may mandate use of specific terms. An employment action during a protected period such as under the Family and Medical Leave Act or a period of disability due to a workplace injury may trigger specific consequences. Attorneys advising clients about a separation from employment need to know and use the correct terminology.

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Teddy Snyder Theda C. Snyder

Theda “Teddy” Snyder mediates civil disputes, workers’ compensation and insurance coverage cases, including COVID-19 related coverage disputes, in person or by video. Teddy has practiced in a variety of settings and frequently speaks and writes about settlements and the business of law. She was a Fellow of the College of Law Practice Management and is the author of four ABA books, including “Women Rainmakers’ Best Marketing Tips, 4th Edition” as well as “Personal Injury Case Evaluation” available on Based in Los Angeles, Teddy can be found at and on Twitter @SnyderMediation.

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