Furlough vs. Layoff

A furlough is generally a temporary reduction or pause in work with an expectation that the employee may return, while a layoff is typically a separation from employment caused by business conditions rather than employee performance.

The practical difference often comes down to whether the employment relationship continues. During a furlough, an employee may remain employed even if hours or pay are reduced for a period. A layoff generally ends employment. Benefits, unemployment eligibility, notice obligations, and final-pay requirements can vary, so employers should plan and communicate either action carefully.