Definition of Furlough

What is a "furlough"? What is the definition of the term "furlough"?

In the corporate world, companies will sometimes embark on "furloughs" in order to cut back on expenses, especially during tough economic times.

For instance, a number of high-profile companies completed furloughs during the "Great Recession" of 2008-09.

Under a furlough program, employees can be asked to take days off without pay. If not enough employees volunteer to unpaid days off (which is usually the case), companies will force involuntary furloughs.

Furloughs can last days, weeks or even months.

Furloughs are seen as "easier" alternatives to full-fledged layoffs, as it is very easy to call employees back to work once things start to improve for the company.

In the case of layoffs, many laid-off workers will seek employment elsewhere. By using "furloughs", companies keep employees close so that they can easily be called back to work.

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Why would an employee volunteer to take unpaid days off?

Well, the "least important" employees for a company are targeted in furloughs. So, if you are asked to take some unpaid days off, maybe you might be worried that you could be laid-off or even fired if you don't agree. In this case, maybe you think that agreeing to some unpaid days or weeks off could save your job (or the company) entirely.

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Furloughs are often seen in times of great short-term economic distress, such as in 2008 or 2020.

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