What does "Furlough" refer to in the context of employment?

In the context of employment, "furlough" typically refers to a mandatory unpaid leave of absence granted by an employer. This is often implemented due to budget constraints or financial difficulties the organization may be facing. During a furlough, employees are not required to perform work and may not be compensated for the duration of their leave.

The purpose of a furlough is to reduce labor costs temporarily without resorting to layoffs, allowing the organization the flexibility to bring employees back to work once the financial situation improves. It is important to understand that furloughs are distinct from layoffs, as they do not signify permanent job loss but rather a temporary situation where employees are expected to return to work once conditions allow.

This context clarifies that a furlough addresses financial exigencies within an organization, distinguishing it from other employment practices such as paid leaves, reductions in hours, or job reassignments.