As the COVID-19 pandemic continues to impact economies worldwide, many employers have been forced to furlough their employees. A furlough is a temporary leave of absence from work, typically without pay, due to economic conditions or other reasons beyond an employee`s control. In this article, we`ll take a closer look at furloughs and whether or not you need a furlough agreement for your business.

What is a Furlough Agreement?

A furlough agreement is a legally binding document between an employer and employee that outlines the terms of a furlough. This agreement should include details such as the start and end date of the furlough, whether or not employees will be paid during this time, and what benefits (if any) will be available to individuals while on furlough. Furlough agreements also typically outline any conditions that need to be met before employees can return to work.

Why You Need a Furlough Agreement

Creating a furlough agreement is important for business owners for several reasons. First, it ensures that both employers and employees are on the same page regarding the terms of the furlough. This can prevent misunderstandings or confusion down the line and make the entire process smoother for everyone involved.

Additionally, a furlough agreement can offer legal protection for both employers and employees. By outlining the terms of the furlough in writing, all parties can refer back to the agreement if any disputes arise. This can provide a level of protection against any potential lawsuits or legal claims related to the furlough.

Finally, a furlough agreement can also help to maintain positive relationships between employers and employees during a difficult time. By communicating openly and transparently with employees about the reasons behind the furlough and the terms of the agreement, employers can demonstrate that they value their employees and are committed to their welfare.


In summary, if you`re considering furloughing employees, it`s important to create a furlough agreement to outline the terms of the leave. This agreement can help prevent misunderstandings, provide legal protection, and maintain positive relationships between employers and employees during a difficult time. If you need assistance creating a furlough agreement, consider consulting with a legal professional who specializes in employment law.