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What is a Furlough Letter?
While layoffs are one method of cutting payroll costs, a furlough can be beneficial in many instances as a temporary solution for putting work (and wages) on hold without losing your workforce permanently.
During a furlough, employees must do no work for an employer, but they are able to keep their employer-sponsored health insurance and other benefits while still collecting unemployment. Unlike a layoff, which is a permanent termination of an individual's employment, a furlough is temporary unpaid leave and employees are expected to return to work after the furlough period is over.
When to use a Furlough Letter:
- You have a downturn in business and/or business closure that requires your business to cut payroll costs.
- You need to notify an employee that they will be placed on furlough.
- You would like provide documentation of a decision to furlough an employee.