Definition: A furlough is mandatory time off from work without pay (or with partial pay). Furloughs are an alternative to layoffs; they save a company money, and tend to be used during difficult economic periods. They can be short or long term, but are generally temporary.
Furloughs are organized on a set or rolling basis. For example, an employee may be asked to work three out of four weeks per month, or to take two days off a month without pay. Sometimes, a company will shut down for a number of weeks and all employees will be on furlough.
While an employee on furlough receives no pay or partial pay, his benefits usually continue, which differentiates a furlough from a layoff.
