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The definition of furlough (pronounced fur-low) is a forced leave of absence that is usually unpaid. Furlough employees are those who have been required to take time off with amounts of time off being deducted from their regular salary. A number of companies and agencies of the government are cutting costs through this action, in order to deal with reduced budgets or lowered profits.
The decision to create furlough employees is not a new one. Over the years especially in the manufacturing industries, lean times have often meant employees lost some hours. This is usually done on a weekly basis, instead of for several weeks and months at a time. Furlough employees might lose four to eight hours per week, which does reduce their paycheck, but the amount by which it is reduced may still be enough to live on, though not always. Usually, furlough doesn’t mean losing full time status or access to benefits.
Typically companies take this step because they don’t want to fire workers. Business could pick up, and the layoffs can negatively affect worker performance. Common thinking is that it's better for everyone to tighten their belts a little, than it is to lose employees. The sincerity of this gesture may be lost when top members of the company don’t take a reduction in pay too. This can build significant resentment; for a furlough to be effective, it should affect everyone. However, sometimes workers who make very little pay may be exempt from a furlough, which is usually not greeted with bitterness by employees that make more.
One new trend is the types of business that have furlough employees. In government agencies this has become an acceptable way to respond to budgets that have been slashed. Again, the principal is usually the same. Employees may take a half-day to a day off per week and get paid less than they normally do. In both government and industry, furlough employees may have a set time in which their pay will be reduced, or they might have to wait a long time before forced leave of absences are over.
Plenty of employees may be able to cope with a reduction in pay, but others can’t. There are some potential options available. Since the furlough day often falls on the same day each week, an employee could take a job for that day, or work a part time job on other days of the week to make up needed cash. Also, when income is very low, it may be possible to get government assistance to help with reduced income. Employees could also look for a new job if the furlough is of indefinite length.