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So, you’ve been furloughed. The good news is that you still have a job. The bad news is that you're not getting paid. We'll explain furloughs here -- their purpose and the rules that govern them, give some examples, and offer a few ideas on how you can handle your financial, professional, and emotional life when a furlough looms.
A furlough is a short-term layoff or reduction in hours used to reduce payroll costs (typically one of a business's largest expenses) when times are tough.
Not all struggling businesses lay off workers when financial troubles arise. In many situations, businesses can't afford the permanent loss of employees. In other cases, businesses like ski resorts and golf clubs close their doors when seasons change, but still hope to retain trained workers. And every few years, when the U.S. Congress is unable to reach a budget deal, hundreds of thousands of federal workers face the unhappy prospect of unpaid time off (although they're usually reimbursed after the crisis passes).
From a company standpoint, furloughs can be a solution to a short-term financial crunch; from a worker standpoint, they can create a crisis that's still better than a layoff.
More than three-quarters of Americans live paycheck to paycheck, so losing even one week can hurt. Even worse, there's no fixed time for a furlough.
The distinction between hourly and salaried workers is a major issue for companies deciding to furlough employees. Hourly workers can be furloughed for almost any period of time, but salaried workers have to be paid their full salary for any week during which they work. For example, a salaried employee who answers an email while on furlough should be paid for an entire week of work.
A few other rules apply to furloughs:
Laid-off employees almost always can qualify for unemployment benefits; furloughed employees usually can qualify for unemployment benefits if they're eligible. Since unemployment programs are operated by individual states, however, rules and restrictions may vary.
Regardless of your company's reasons for a furlough, there are steps you can take to minimize the financial, professional, and emotional damage caused by the lack of a regular paycheck.
Some employers are well known for their furlough programs. Newspaper publisher Gannett Co. (NYSE:GCI), for example, has used a combination of layoffs and weeklong furloughs during the Christmas holidays -- described as "unpaid leave" -- to trim its payroll costs as revenue at the nation's largest newspaper company has plunged.
Other furloughs have been less predictable. The COVID-19 pandemic, for example, wreaked havoc on employers, and many resorted to indefinite furloughs. For example, electronics retailer Best Buy (BBY -1.03%) announced in April 2020 that it would furlough 51,000 employees. Hotel giant Marriott International (MAR +2.33%) furloughed more than 117,000 workers in early March 2020. Retailer TJX (TJX +0.41%), the Framingham, Massachusetts-based company that operates TJ Maxx, Marshalls, and HomeGoods stores, sent an estimated 286,000 employees home in April 2020.
In April 2024, United Airlines (NYSE:UAL) announced voluntary furloughs for pilots in the wake of probes into safety issues with its 787 and 737 jets after a Jan. 5 incident in which an Alaska Air Group (ALK +1.96%) plane lost a panel in mid-flight.
On a somewhat more predictable note, more than 600,000 federal workers were slated to be furloughed, and another 780,000 were required to work without pay when Congress struggled with a funding plan deadline in March 2024. The standoff was resolved with a $1.2 trillion spending measure that staved off the 22nd government shutdown since 1976.
