A furlough is a temporary layoff. It is a short-term dismissal or brief time-off given to employees, usually due to a lack of funds to operate a business or for the purpose of saving money or reducing the budget. It is a mandatory unpaid leave of absence or intermittent work schedule.
As companies try to manage the slowing economy and reduced business, they are turning to a policy of work furlough, instead of full-scale layoffs or downsizing. All employees can be subject to a furlough which is a temporary non-duty, non-pay status. The furlough could be for a certain period of time or be intermittent to reduce employee financial hardship.
Furloughs have been in the news a lot lately. Once used primarily by employers of blue-collar workers during times when workloads slowed down (construction jobs and auto industry assembly lines), they have increasingly been extended to administrative workers in the public and private sector including state and local governments, colleges and universities, and large corporations.
Furloughs have increasingly been used to close gaps in employers’ budgets when their income is reduced due to declining income and sales tax revenue or company profits. They are seen as a more humane alternative to permanent layoffs (a way to cut costs without cutting people) and also enable employers to retain skilled and experienced employees who will be needed when the economy eventually rebounds. When large employers cut even a few days of their workers’ pay, they can often save millions of dollars during tough economic times.
Rules, Laws, Policies
If you will be furloughed sometime in the next year, it is advisable to plan ahead. There are ways to prepare yourself financially and mentally for a work furlough.
First, you should know your company's furlough policy. Employees should find out the specific rules and procedures of the furlough policy for their particular organization.
What is the length of time of the furlough?
How can the days of the furlough be divided?
When can a furlough be taken?
What are the best times to take a furlough?
Are there times a furlough is not permitted?
How is a furlough request handled?
How much advance notice is needed to submit a furlough request?
How is the furlough recorded on your time sheet?
Employees should familiarize themselves with the laws governing furloughs, layoffs, and unemployment benefits. Does a furloughed employee qualify for unemployment benefits in the same way as an employee who has been laid off? Depending on the state you live in and the amount of hours you have worked, you may be able to file a claim to receive unemployment benefits during your furlough.
Employees should calculate the amount of their lost wages. This data will provide the information needed to determine how much money you will need to save or earn.
Employees who are anticipating their furlough might want to start saving a portion of their wages. It is smart to set aside surplus funds to help offset the financial strain the furlough may cause and to finance the activities of the furlough time period.
Employees might consider reducing their personal spending. Are there monthly expenditures that can be cut? Are there little luxuries you can cut back on? Are there ways you can spend less money?
Employers should examine other sources of income. It might be wise to schedule your furlough at a time when you know you will be receiving a windfall. Gifts, tax returns, and dividend payments are examples of sources of additional income.
Employees should review their calendar closely to determine the best time to schedule their furlough. You might want to avoid taking your furlough during a month when you would usually have more expenses (birthdays, anniversaries, special occasions, tuition, payments due).
If employees are considering their furlough time as an unpaid vacation, perhaps they might consider taking a trip to a vacation destination during the off-season when hotel rates are lower.
Weekly employees might consider splitting their one week furlough between two consecutive weeks. Consider taking Thursday and Friday of one week and then take Monday, Tuesday and Wednesday of the following week. Or you might try to identify which months have an extra week in them.
Monthly employees might consider splitting their one-week furlough between the end of one month and the beginning of the next month.
As you anticipate and prepare for your furlough, consider what activities you might want to accomplish during the time off. These activities may be purely recreational. They may be practical, project-oriented activities requiring productivity. Or they may be employment-oriented activities, intended to generate income.
Furlough activities may be nothing more than leisure time devoted to recreation and leisure. Furloughs of this type may very much resemble a vacation (“fur-cation”) and involve activities that are engaged in simply for fun and enjoyment. Depending on the cost of the particular activities, furlough time could be devoted to any number of pastime or avocational pursuits, hobbies, or amusement. If you can afford it, this could be an excellent time to take it easy, rest, relax, and unwind.
Catch up on pleasure reading
Quality time with family
Visit a friend or invite a friend over for a visit
Hobby related activities
Craft show or trade show
Athletic or sports related activities
Go to a movie
Take a trip
Volunteer community service
A furlough may provide the opportunity to attack projects that you always seem to put off because you don’t have the time. The extra time a furlough grants you could be used in practical or productive ways. For those who want to be industrious during their furlough, there are several worthwhile tasks that could be completed.
Home improvement or repairs
Landscaping, lawn maintenance, gardening
House cleaning or organizing
Cooking ahead (canning, freezing)
Medical or dental procedures
Career planning and job seeking
Catch up on professional reading
Take a course or class
Attend professional development seminar
For many who are furloughed, the time off is a perfect time to make money. Employees may seek temporary work to replace lost income.
Substitute position (office, teaching)
Baby sitting or house sitting
Home based business (freelance, self employed)
Sell handmade items (craft)
Sell items through classified ads or on-line
Conduct a yard sale
Explore investment opportunities
Temporary employment comes in a variety of forms. Some job categories lend themselves to temporary work more than others. Some times of the year offer more temporary jobs than others.
Temporary employment agencies (temp agencies, staffers) oftentimes can be very helpful in helping to place you in a short-term job.
Temporary jobs are found year-round in office environments, performing clerical tasks like filing, typing, answering the telephone, taking messages, faxing, and making copies.
During the summer months, many companies conduct inventory counts. Temp workers might be hired by an inventory company, a warehouse, a distribution center, or a retailer.
During tax season (January-April), accounting firms, accounting departments, and tax preparation companies hire additional staff to assist with a variety of clerical tasks associated with the tax filing process.
Law firms and accounting firms year-round hire individuals to be runners. Runners run errands and make deliveries between offices and buildings.
Catering companies, party planners, convention centers, and other organizations that conduct business on a contract basis often hire temporary workers for a particular project or event.
Banks occasionally hire temporary staff to perform a variety of clerical or transaction processing tasks associated with checks and credit cards. Usually these temp workers are employed at bank processing centers.
Retailers double and even triple the size of their sales and customer service staffs during the winter holiday season (November-December).
The US Post Office and other package delivery businesses (UPS, FedEx) hire additional drivers and processors during holiday times.
Restaurants, grocery stores, and other food-related businesses hire temporary workers to make special deliveries (turkeys, gift baskets) during holiday times.
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