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In the U.S. workforce, a furlough is a temporary, involuntary, and unpaid leave of absence for an employee. Unlike a layoff or termination, the company still employs the individual and the employee keeps their benefits but does not receive a paycheck. The employee is not allowed to do any work while on furlough.

What Small and Midsize Businesses Need to Know About Furlough

A furlough's temporary nature differs from that of layoffs, which involve the permanent dismissal of employees. Furloughs can be a practical approach for businesses that need to reduce staffing costs. However, employers need to navigate the process kindly and have a long-term strategy.

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