Furlough

AAA

DEFINITION of 'Furlough'

A temporary layoff, involuntary leave or other modification of normal working hours without pay for a specified duration. Furloughs are used in the military for soldiers whose new assignments have not yet been determined. For businesses, furloughs are used for a variety of reasons, like plant shut-downs, or in cases where a broad reorganization makes it unclear which employees will be retained.

BREAKING DOWN 'Furlough'

In contemporary business practice, a furlough is a less permanent solution to layoffs, and are useful in situations where the economic condition is deemed to be of short duration. It is also common in situations where a business disruption is deemed to be temporary.

RELATED TERMS
  1. Restructuring Charge

    A one-time cost that must be paid by a company when it reorganizes. ...
  2. Layoff

    1. When a company eliminates jobs regardless of how good the ...
  3. Downsize

    Reducing the size of a company by eliminating workers and/or ...
  4. Rationalization

    A reorganization of a company in order to increase its efficiency. ...
  5. Restructuring

    A significant modification made to the debt, operations or structure ...
  6. Total Permanent Disability (TPD)

    A condition in which an individual is no longer able to work ...
Related Articles
  1. Insurance

    A Review Of Past Recessions

    Here we look at the biggest economic declines in the U.S. since the Great Depression.
  2. Economics

    What You Need To Know About The Employment Report

    This widely watched indicator of economic well-being directly influences the market.
  3. Options & Futures

    Why Wages Stick When The Economy Shifts

    Even economists can't agree on the impact (or even existence) of wage stickiness. So, how does it affect you?
  4. Budgeting

    Planning For Unemployment

    Preparation can help you land on your feet after getting the "old heave-ho".
  5. Economics

    Leading Economic Indicators: U.S. Bureau of Labor Monthly Stats

    The Bureau of Labor Statistics' monthly employment figures are a key economic indicator. Here's how they work.
  6. Economics

    What Qualifies as Full Employment?

    Full employment is an economic term describing a situation where all available labor resources are being utilized to their highest extent.
  7. Professionals

    Is it Time to (Finally) Push Kids Out of the Nest?

    Parents should make sure their kids realize their home is a launching pad not a landing spot, and advisors can help clients talk to their children.
  8. Economics

    Understanding Frictional Unemployment

    Frictional unemployment is one aspect of natural unemployment, which is unemployment caused by things other than an underperforming economy.
  9. Professionals

    Millennials & Debt: Why So Many Still Live at Home

    More millennials live with their parents now than they did during recent recessions. Here's why.
  10. Taxes

    Top Tips for Minimizing Taxes on Severance Pay

    A look at the top ways to lessen the tax burden on severance pay.
RELATED FAQS
  1. What are the best free online calculators for calculating my taxable income?

    Free online calculators for determining your taxable income are located at Bankrate.com, TaxACT.com and Moneychimp.com. Determining ... Read Full Answer >>
  2. What are some of the drawbacks of industrialization?

    In economic history, industrialization is the social and economic transformation of the human group from an agrarian society ... Read Full Answer >>
  3. What economic indicators are important to consider when investing in the retail sector?

    The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
  4. How does comprehensive income get reported on my 1040?

    As of 2015, on the standard IRS Form 1040, your comprehensive or total income is calculated through lines 7-22. This is different ... Read Full Answer >>
  5. How can I increase my standard of living in my retirement years?

    If you're decades away from retirement, the best way to ensure a decent standard of living during your golden years is to ... Read Full Answer >>
  6. What is the key difference between the participation rate and the unemployment rate?

    The participation rate and unemployment rate are economic metrics used to gauge the health of the U.S. job market. The key ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bubble Theory

    A school of thought that believes that the prices of assets can temporarily rise far above their true values and that these ...
  2. Stock Market Crash

    A rapid and often unanticipated drop in stock prices. A stock market crash can be the result of major catastrophic events, ...
  3. Financial Crisis

    A situation in which the value of financial institutions or assets drops rapidly. A financial crisis is often associated ...
  4. Election Period

    The period of time during which an investor who owns an extendable or retractable bond must indicate to the issuer whether ...
  5. Shanghai Stock Exchange

    The largest stock exchange in mainland China, the Shanghai Stock Exchange is a nonprofit organization run by the China Securities ...
  6. Dead Cat Bounce

    A temporary recovery from a prolonged decline or bear market, followed by the continuation of the downtrend. A dead cat bounce ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!