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Furlough Letter basics

Given the impact of COVID-19 on businesses nationwide, many small business owners have faced challenges making payroll or otherwise keeping their businesses in operation. 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.

If you have employment law questions related to COVID-19, ask a lawyer or find essential documents for free in our Coronavirus Legal Center.

Use the Furlough Letter document if:

  • 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
  • A Furlough Letter serves as a formal declaration to an employee that they will be placed on furlough or unpaid leave. This letter can also act as a written record of the employer's verbal notice to the employee. Written documentation of a furlough decision is recommended for keeping good records as an employer, but it can also be helpful for employees who are seeking relief and/or need to provide proof of their changed employment status to creditors.

    Other names for this document: Furlough Notice, Employee Furlough Letter, Temporary Layoff Notice

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