Employee Furlough

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Employee Furlough

The word "furlough" recently has got some prevalence due to COVID-19. What does it actually refer to?
Employee Furlough (EF) is often misunderstood as being the same as employee layoff. However it is actually an alternative to layoff.
The word furlough means: leave, vacation, permission, license, permit, holiday, day off.
In business, when an employer furloughs its employees, it requires them to work less hours or no hours at all or to take a certain amount of unpaid time off.
In some countries, the government then pays a substantial part of the salaries of the furloughed employees to avoid the Covid crisis will harm the employees and the economy.
EF is a cost saving strategy for employers when they don't want to lay off staff but lack the resources to continue paying them. In a layoff strategy, the employer permanently separates employees from the payroll. However in a furlough strategy they can give them a temporary unpaid leave in order to cope with extreme situations like COVID-19. The employers adopting an EF strategy do not have to rehire the furloughed employees after the situation becomes normal.

Furlough is obviously a good strategy from the employers side as firing and rehiring is a costly and time-consuming procedure.
But employees can also get benefits out of it. For example, they can can search for new employment and in the meantime might be able to claim government fundings or unemployment insurance, similar to laid off employees. Moreover, in some cases employee benefits are continued for furloughed ones.

The above is what furlough means in general, but depending on situation and legislation system, its meaning may differ and employers may arrange varying furlough policies. Some examples are given below:

• An employer may furlough a group of its employees for a week and another group the other week.
• It may furlough nonexempt employees one day a week and pay them for 32 hours each week.
• An employer may furlough all employees or it may exclude employees in essential services.
• Even an employer can set to close its business for few weeks.

The idea behind furlough is to share the hardship together as opposed to a few employees losing their jobs completely. In my opinion, EF can act like a shield to survive the ongoing war against Coronavirus. What do you think?

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		1 Musa George Entrepreneur
	Employee Furlough as an Option During Corona Crisis With the fact that the duration of corona is upredictable, EF can be the best option. This is evident as compared to the cost of lay off and re-engaging when the situation calms. The "only" disadvantage is when the employee lacks social security benefit and the pandemic prevails for a long time. The employer however, may still adjuct with call backs and any other special arrangement as an emergency solution to the current situation.

		3 Tolulope Adesina HR Consultant
	Furlough: the Legal Complications There has been some buzz around this subject lately. However, it appears that placing employees on furlough raises some pertinent questions. In my view, furlough does not imply cessation of the employer-employee relationship, as this arrangement does not imply separation. Rather, it connotes a mutually agreed period of unpaid time-off. Now these are the questions/challenges: In my country, the employer is mandated by law to provide social and medical insurance benefits. So, how will these benefits be managed while an employee is on furlough? Will this obligation continue? If an employee on furlough breaches company policy, is such person still subject to the company's disciplinary procedure? Are such employees even obliged to continue to abide by company policy? In my country, most unionized organizations pay end-of-service benefits to employees at the point of their exit. To compute each employee's entitlement, tenure of service is considered. For an employee who spent a part of his time on furlough, will that period of unpaid time-off be considered? If no, does that imply that the employee was "separated" while on furlough?