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# Furlough

A “Furlough” is a temporary leave of absence from work that is typically initiated by an employer due to financial constraints, operational changes, or other significant reasons. Unlike a layoff, which usually indicates a permanent termination of employment, a furlough is often intended to be a short-term solution, with the expectation that employees will return to work once the situation improves. During a furlough, employees may not receive their regular salary, but they may retain their employment status and benefits such as health insurance.
For example, during an economic downturn, a company might implement a furlough policy where employees are required to take one day off per week without pay, while the company remains operational with reduced staffing. This helps the company reduce costs while keeping its workforce intact for future operations.
Related Terms:
Layoff
Part-Time Employment
Leave of Absence
Temporary Employment