Dr John Sullivan Talent Management Thought Leadership
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KEY POINTS
- Amid the coronavirus pandemic, Google searches for, “What does furlough mean?” are up more than 5,000% over the last 30 days.
- Here’s everything you need to know about the practice.
Dr. John Sullivan was interviewed by Annie Nova.
“Furlough,” derives from the Dutch word, “verlof,” which means “leave of absence,” usually in regard to soldiers or prison inmates, said John Sullivan, a professor at San Francisco State University who studies furloughs. “In the employment context, it’s an offshoot of an old railroad and airline term for a time period without work,” he added.
In most cases around the coronavirus pandemic, the term typically refers to a mandatory, temporary unpaid leave of absence. Companies use them during recessions as an alternative to lay-offs, because it allows them to bring workers back quickly when the economy starts to heal. The length of the leave varies, “depending on how long the downturn lasts,” Sullivan said. “But almost always it’s at least a year.”
However, some furloughed workers never return to their jobs, he said.
“Companies like Tesla will come back and end the furloughs while many retailers like Macy’s will never return to their current level of employment, because of Amazon’s dominance,” he said.
There’s no federal law requiring companies to offer benefits to their furloughed workers, Sullivan said. “And continuing benefits is much less common now that benefits have gotten so expensive,” Sullivan said.
Yet the coronavirus pandemic has triggered a flood of furloughs. “It certainly appears to be a record number, by far,” Sullivan said.
During their furlough, workers are also free to look for other jobs, Sullivan said, but warned that they can run into some hurdles.
“The new employer will fear that they will quit the minute their original firm calls them back,” he said.
Read the full article by Annie Nova on CNBC.com. Posted on Friday, April 17.
