Early Nominee for Business Trend of the Year: Furloughs

When the going gets tough apparently the tough seek furloughs. From a prestigious New York City law firm to the Massachusetts Bay Transportation Authority (MBTA), to state and municipal governments, employers facing budget pressure are sending employees packing, without pay, if only for a limited time. Unlike a permanent layoff a furlough is a forced [...]

When the going gets tough apparently the tough seek furloughs. From a prestigious New York City law firm to the Massachusetts Bay Transportation Authority (MBTA), to state and municipal governments, employers facing budget pressure are sending employees packing, without pay, if only for a limited time. Unlike a permanent layoff a furlough is a forced unpaid leave for distinct period of time; typically days, though it can be imposed for weeks or months.

For example, the MBTA is imposing a 5-day furlough for employees earning at least $100,000; employees earning less are being asked to disappear-pay free-for three days. The furlough is a bit more enticing at the Skadden Arps law firm; associates are being asked to take a year off in return for one-third pay. (Technically that’s not exactly a furlough, but a nice sounding semi-financed sabbatical.) And as the New York Times recently reported furloughs are gaining popularity as a way for cash-strapped state governments to try and cope with gapping deficits. The trend has even spawned a new term, fur-cation. That seems a bit off though. Shouldn’t it be pay-cation, given that you are taking a taking a vacation from your paycheck?

In the midst of a severe recession, furloughs are often imposed without too much push-back from most employees. While no one is excited at less income, the prospect of taking an unpaid leave is preferable to joining the ranks of the unemployed. (That said, if you are furloughed, check with your state unemployment office. Depending on your salary, the length of your furlough, and your state’s unemployment policy you may be eligible for benefits due to a furlough.)

The year of the furlough has also spawned some interesting and encouraging reactions:
• A couple of furloughed journalists with time on their hands but no money to blow came up with the idea to reach out to the rest of Furloughed Nation and seek low-cost house swaps.
• During ski season the Squaw Valley ski resort in California’s Lake Tahoe offered Furlough Fridays when furloughed state workers could hit the slopes with a $30 lift ticket, instead of the regular $79 fee.
• The One Clemson Furlough Relief Fund collected more than $71,000 from the community to help university employees hardest hit by a recently imposed 5-day furlough. Donations ranged from $2 to $5,000.

– Carla Fried