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What Is a Furlough?

Definition: Furlough


There are many types of leave defined as furloughs, but recently the term has been in the news referring to forced, unpaid hiatuses for salaried workers. Traditionally, these short-term periods of unpaid days off were limited to industries like construction that have sharp seasonal business changes. However, The Wall Street Journal reports that furloughs are now being utilized by state governments and universities, publishing and technology companies, and the arts and entertainment industry.

Employers struggling with budget issues use furloughs to buy time — it allows them to maintain a talented staff in hopes that they'll be needed when business picks up, but saves money in the meantime. For example, the State of California instituted furlough days for state employees that forced workers to stay home two Fridays every month.

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