An employee furlough is a mandatory suspension from work without pay. It can be as brief or as long as the employer wants. An organization may furlough employees as a cost-saving measure when it doesn't want to lay off staff but lacks the resources to continue paying them.
This information is up to date as of the above date. We are monitoring the Families First Coronavirus Response Act (FFRCA) and similar legislation that may require pay during COVID-19 closures or leave, and will provide updates as they occur.
No—furloughed employees must not do any work on behalf of their employer whatsoever. If a salaried employee does any work while on furlough the employer must pay them the equivalent of their salary for the entire day. If an hourly employee works while on furlough the employer must pay them for the time worked. To ensure that well-meaning employees don’t engage in activities that may inadvertently trigger the no work rule, furloughed employees typically have their access to work accounts and devices revoked.
Employees should be notified of the furlough. When possible, reasonable advance notice must be given to employees before the furlough begins. In addition, furloughs for longer periods of time may be affected by the federal Worker Adjustment and Retraining Notification (WARN) Act and some states’ WARN laws. For example, in California, 50 or more employee furloughs may trigger California WARN Act notice obligations.
There are four key differences between a furlough and a layoff:
(1) Furloughed employees have an expectation that they will return to work. Typically, an employer will give furloughed employees either a specific date or a specific condition for resuming duties.
(2) Furloughed employees typically retain access to any health and life insurance during the furlough.
(3) A furloughed public employee retains their employment rights. Government employees cannot be fired or replaced without process. For a public employee who has been furloughed, rather than laid off, this means that they have a presumptive right to return to that position if they choose and it exists.
(4) A furlough is relatively seamless. Laying off employees requires significant process, as does hiring new staff. This can be time consuming and expensive. By contrast, a furloughed employee can come and go fairly easily.
Furloughed employees have the right to seek new employment. For an employer, one of the main risks of this process is that their top talent will get jobs elsewhere. Many employees consider taking temporary jobs during a furlough. They should check carefully for rules against outside employment and/or second jobs, as their employer is free to enforce these policies even during a furlough. A furloughed employee may also be able to claim unemployment benefits for their time without pay. Each state has individual rules for collecting unemployment, including (potentially) waiting periods to collect benefits and a requirement that the applicant show an active job search. Either or both of these may disqualify a furloughed worker. Further, furloughed workers who receive back pay for their time away from work will typically have to pay back any unemployment benefits they collected.