Furlough refers to a temporary leave of employees under special circumstances. Companies might feel compelled to put their employees on a furlough when they suspect a downfall in the economy. Being put on a furlough means that the employees are still employed; however, they have been put on a leave of absence.
Furlough is a cost cutting technique followed by companies during tough economic conditions. It is also used by companies when they plan on reorganising the workforce.
Furloughs can be implemented over a long period or a short period. Some furloughs can come in the form of mandatory unpaid leaves. This means that workers can be charged for leaves which were otherwise paid leaves for them.