Furlough

An alternative to a reduction in force is a furlough program where the employee is not terminated, but is placed on a sort of leave of absence where they remain on the payroll but are not physically paid. It could be as little as a day, and can theoretically be indefinite, but designing and administering such a furlough program is complicated and there are numerous risks of violating employment laws including the Fair Labor Standards Act, Workers Compensation, Americans with Disabilities Act, OSHA, and collective bargaining. That is why few companies have furlough programs: most avoid it unless there are truly strong business-related compelling reasons.

1. Potential risks with Furlough Programs (Inside Counsel).

2. Definitions and related links (Wikipedia).

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