What It Means to be Furloughed

A furlough is an involuntary temporary job layoff without pay, is usually imposed by an employer for financial reasons. If you’re furloughed, it’s an unwelcome interruption to your income, and comes with a lot of uncertainty.

Furloughs are a weird limbo – you’re employed, but not working or collecting a check. In most cases, furloughed workers are not reimbursed for the pay that they lose. One exception is a federal government shutdown furlough. Federal law requires the workers who were on leave, or had to work without pay, to be reimbursed once the government starts up again.

Questions a furloughed worker may have are:

• Do you get benefits?
• Can you collect unemployment?
• Can you work somewhere else while you’re waiting to go back to work, or even find another permanent job?
• Can you check work email, finish that project, or field client calls even though you’re “not really working”?

Let’s take a look at what it means to be furloughed.

What Is a Furlough?

A furlough is mandatory unpaid leave from work, required by your employer. It could be for days, weeks, or even months. It may be in the form of a reduction in hours, for instance you work four days a week, instead of five, and are only paid for those four days.

In all cases of a furlough, you are still employed, you’re just not working or being paid.

“Employee wages and salaries constitute the majority of a company’s operating costs,” Cindy Lo, people operations manager at FitSmallBusines.com said. “Furloughs are a way for companies to put a temporary pause on their highest costs so that they can keep their business open.”

Why Employers Furlough Workers

The main reasons for furloughs are:

• Seasonal work: A business is dependent on the season (tourism, garden center, etc), and closes for part of the year.
• Budget reasons: A business needs to adjust its budget, so it furloughs workers, usually for a brief period, in order to save money on payroll.
• Production slowdowns: Some businesses, usually mills or manufacturers, have predictable annual slowdowns and close for brief periods, furloughing workers.
• Government shutdown: The government’s budget has expired and a new one hasn’t been approved, meaning there are no appropriations to pay employees.

In most cases, a furlough is for a specific amount of time that’s known when the furlough is enacted. The employer may determine when workers take their furloughs, or employees may get to choose when to take it, and even how to split up the time.

In the case of a government shutdown, the length of the furlough depends on how long it takes for a new budget to be enacted. Aside from the 2025 federal government shutdown, there have been 10 since 1976. The shortest was eight days, in 1977. The longest was 34 days, in 2018-19.

During the COVID-19 pandemic, millions of people were furloughed by their employer for different lengths of time, depending on the business.

If a furlough is going to be longer than six months, a company must give 60 days’ notice that it’s going to happen, under the Working Adjustment Notification and Retraining [WARN] Act. Otherwise, furlough length is not regulated, unless the company and workers have a collective bargaining agreement in which furloughs are addressed. The longer a furlough goes on, though, the more likely a company is to lose employees, who can only work so long without an income.

It’s important not to do any work for your employer if you’re furloughed, no matter how tempting it may be. Some employers cut off employee access to email and other functions, but if you still have access, don’t check company email or do any other work related to your job. Doing unpaid work can cause legal complications for both you and the business you work for.

Once a furlough is over, in most cases, workers go back to their jobs.

Federal Shutdown Furloughs

A federal government shutdown usually happens when the fiscal year budget expires without a new one to take its place. It’s against federal law to spend money that hasn’t been appropriated, so workers who can’t be paid have to wait until they can be.

The 2019 Government Employee Fair Treatment Act requires that all furloughed workers and those who worked without pay during a shutdown receive back pay as soon as possible.

Federal law also requires that workers essential for protection of life and property, and some other functions, work during a furlough. These “exempt” employees work without pay during the shutdown.

Workers furloughed range from those who work in offices for the various departments of the U.S. government, to park rangers, and the military. It doesn’t just include those who work in Washington, D.C., but also thousands of workers across the U.S. and internationally.

The only federal workers, by law, who can collect pay during a government shutdown are those who receive “mandatory pay,” which includes members of Congress, but not their staffs; the president; any jobs appointed by the president; federal judges, from the Supreme Court, down to U.S. District Court, and other positions that are not paid by the annual budget appropriation.

The 2019 reimbursement law does not apply to contract workers for the federal government, whose numbers exceed those of federal employees 2 to 1, according to the Brookings Institute. Since contract workers are self-employed, or work for a private agency, they’re not federal employees. Those who work for a private agency may be reimbursed if their employer has a provision for it, but most don’t. Self-employed contract workers won’t be reimbursed.

Every federal agency has its own plan for who will work and who won’t. About 750,000 federal employees, out of about 3 million, are subject to the 2025 shutdown furlough. Another estimated 250,000 were required to work without pay.

Help for Federal Workers Furloughed in Shutdown

There are many resources available, both by state governments, utilities, nonprofits and lenders, to help bridge the financial gap between no income and eventual pay reimbursement. Navy Federal Credit Union, USAA, and other lenders offer no-interest loans for members who aren’t being paid during a shutdown. Some utilities, particularly in states like Virginia and Maryland, with a large amount of federal workers, also have programs.

Maine in 2025 enacted a law that backs $6,000 no-interest loans for any federal or state workers furloughed during a government shutdown. It must be paid back within 180 days of the shutdown’s end. Maryland created a no-interest loan  program specifically for the 2025 government shutdown, with a $700 maximum.

The Federal Employee Education & Assistance Agency lists resources for federal employees affected by the shutdown.

Furlough vs. Layoff: What’s the Difference?

A furlough is temporary – you get your job back when it’s over in most cases and often don’t lose benefits while you’re on leave. You are also still employed, even though your employer isn’t paying you.

With a layoff, you’re no longer employed, even if the company intends to eventually hire people back. Union employees who have a call-back provision in their contract are most likely to be rehired. A call-back provision requires the company to give the laid-off worker first refusal on the position if it reopens.

If you are laid off, your employment was terminated and so are your benefits, though laid-off workers also get severance pay and accrued vacation pay – whatever the company policy is for people who leave a job.

A furlough doesn’t come with any cash attached, but furloughed workers are still employed by the company, and often are still covered by their employer’s health insurance plan, retain their 401(k) and any other employer-related benefits.

A furlough can turn into a layoff if the business’s financial situation gets worse or the company closes. It also is considered a layoff under the WARN act if it goes longer than six months. If workers weren’t given 60 day’s notice, the employer may have to reimburse them 60 day’s pay.

Lo, the HR professional, said that businesses may decide on a furlough instead of a layoff because they believe the situation that makes it necessary is temporary.

“They are hopeful that the business will revert back to their previous profitable levels and will need everybody back to work when that time comes,” Lo said. “Most importantly, they do not want to lose the quality talent they have taken time to hire and train.”

Federal employees who are furloughed during a government shutdown are protected from being laid off by the Government Employee Fair Treatment Act [GEFTA], passed after the 2018-2019 government shutdown. The law protects federal furloughed workers from losing their jobs for good if a shutdown drags on or causes shortfalls that may lead to layoffs.

Will You Be Paid During a Furlough?

Unless there is a company policy that requires it – or in the case of a federal government shutdown, a law – you won’t be paid for the time you don’t work. The point of most furloughs is to save money, which is achieved by cutting payroll costs.

The exception is federal employees, who will get reimbursed for their furloughed time once there’s a new federal budget. The GEFTA requires that checks for furloughed federal employees be processed as soon as the new appropriations kick in, regardless of the employee pay schedule.

If the shutdown started in the middle of a pay period, employees will be paid right away for the time they worked in that pay period, another provision of the 2019 law.

Pay for federal employees who had to work during the shutdown, but didn’t get paid, includes any overtime, weekend or holiday differentials they would have normally gotten. But again, it won’t be until after the shutdown is over.

There is no provision for federal contract workers to be repaid, or even to get their jobs back. Any reimbursement is up to the agency they work for, not the federal job they were contracted to do. If they are self-employed, they will not be reimbursed.

What Happens to Your Benefits During a Furlough?

In most cases, workers who are furloughed for brief periods retain their employer-sponsored benefits, including health insurance, retirement and life insurance plans, and health savings accounts. Benefits of federal workers furloughed during a shutdown are protected by law.

Company policy for most furloughs determines the specifics of how benefits are handled, including pay deductions, whether benefits are frozen or pared back during the furlough, and how long they continue if the furlough continues. Employer benefits are often administered by a third-party carrier, and the carrier’s policy may determine what happens to benefits.

Union workers usually have built-in protections when it comes to retaining benefits during a furlough. If it’s not already in their contract, when a company decides to furlough employees, unions negotiate with the company as to what the rules of the furlough will be.

The length of a furlough plays a part in what happens with health insurance and other benefits. If the furlough is longer than a few weeks, health insurance generally ends at some point. COBRA, the insurance continuation for laid-off employees, doesn’t apply to furloughed workers.

“(Health care) is not required, and it’s not guaranteed companies will provide this to furloughed workers, so it will largely depend on your employer,” said Anna Barker, founder of LogicalDollar, a financial resources and literacy website.

Barker said it’s less common for companies to continue to provide benefits that aren’t health benefits to furloughed workers, though there are exceptions.

Benefits for Furloughed Federal Employees

Federal furloughed workers retain health insurance benefits. The deduction for premiums for those enrolled in the Federal Employees Health Benefits program will be taken from back pay when they’re reimbursed.

Retired federal employees continue to get their benefit, since Civil Service Retirement System and Federal Employees Retirement Systems payments come out of a trust, not the federal budget.

Federal employees who pay into the Thrift Savings Plan, the federal retirement savings program, won’t contribute while they are not paid. Like the retirement boards, though, the Federal Retirement Thrift Investment Board is not appropriated through the federal budget. That means it still operates during a shutdown. Those who pay in can still take out loans, and make payments and investments. Those who have loan payments deducted from their pay won’t default while they’re not being paid, but will have to catch up on payments when the shutdown is over.

Can You Collect Unemployment During a Furlough?

You can collect unemployment benefits while furloughed, though every state has different rules.

In most cases, you can apply for unemployment the day after you are furloughed. Whether you are eligible and how long it takes to kick in are up to your state. You can look up your state rules in Career OneStop’s unemployment finder.

In some states, it may take weeks to get benefits, so it won’t address your immediate needs and may not be worth applying for if you know the furlough will be brief.

If you are furloughed because of a federal government shutdown and collect state unemployment benefits, once the shutdown ends and you are reimbursed for back pay, you will likely have to pay your state back.

Can You Get a New Job While on Furlough?

Most furloughed workers can get a part-time or temporary job to tide them over, though they should make sure it complies with any rules their current employer has. For instance, some employers have non-compete rules that still apply if you’re on furlough.

It’s also important to understand how getting another job while you’re on furlough will affect your benefits or finances, said Biron Clark, of Career Sidekick, a job search advice website.

“Depending on what state you’re in, starting new employment can disqualify you from unemployment benefits or reduce your benefits, even if it’s part-time work,” said Clark, who also worked as a recruiter and HR consultant. “Check with your state to know their policies before deciding what to do.”

Clark said the furlough also may be a chance to find a better position.

“When furloughed, the understanding is that your employer plans to resume your employment in the future,” Clark said. “However, you’re under no obligation to return to that employer. You can leave your job just like you could under normal circumstances.”

How to Manage Finances on Furlough

If you are furloughed, one of the most important things to do is make sure any questions you have about benefits, length of furlough, pay, or anything else, are answered by your company. If they haven’t provided answers or information, contact the HR department. If you’re in a union, your representatives should be keeping you updated on how the furlough will work for you.

Don’t be afraid to ask. It’s the employer’s obligation to be clear about what your furlough means, so you can do your best to stay on top of your finances, health care and more.

If it works for your situation, you should contact your state’s unemployment office and apply for unemployment benefits as soon as possible.

Federal employees furloughed during a shutdown should be sure to get all the information they can from the agency they work for. Many furloughed federal employees are represented by the American Federation of Government Employees (AFGE), the National Treasury Employees Union (NTEU), the National Federation of Federal Employees (NFFE), or another union. Your union will have information on the rules regarding your furlough.

If you aren’t already on a budget, this is a good time to figure out how much you can spend on necessities, or whether you can at all.

If you have credit cards, the furlough may force you to rely on them more. If you feel burdened by debt while unemployed, consider contacting a credit counselor at a nonprofit credit counseling agency. Credit counseling can help you work on a budget and stay within your means, or even consider debt relief programs, until you’re back at work.