Furlough Letter
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This furlough letter from an employer is an essential legal tool for U.S. businesses, HR managers, and organizations seeking to notify employees of a planned furlough in a clear, efficient, and compliant manner.
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What is a furlough letter?
A furlough letter is a formal notice issued by an employer to inform an employee of temporary unpaid leave. This document is different from a termination of employment letter, as during the furlough leave an employee keeps their job position and the employment contract remains intact. A well-drafted furlough letter from employer must include start and end dates of unpaid leave and any obligations the employee must continue to observe, such as confidentiality or non-compete agreements, etc.
The parties involved in a furlough letter are an employer and an employee. This document cannot be used outside of employment relations, for example, in case parties are independent contractors or service providers.
This editable furlough letter for employees US could be helpful when an organization or business:
- experiences economic downturn;
- seasonal slowdowns in operation or revenues;
- business restructuring or improvement.
What to include in the furloughing letter template for employee?
Drafting a furlough letter from scratch is a challenging task. We’ve got you covered here and prepared the list of the top-5 most important tips you must be aware of when creating this type of letter:
- Sender’s Details. The text of every furloughing letter template for employee must start with the identification details of an employer. Include the organization’s full name, address, and contact information of an authorized person sending this letter.
- Furlough Reasons. The law does not specify the exact list of reasons when furlough is possible. The most common reasons usually include closure of certain departments, downturn in the business activity, financial troubles, etc. The good business practice is to explain the reason behind such a decision, as it helps to maintain trust between employer and employee.
- Furlough Details. When drafting a furlough letter from employer try to be as specific as possible. Include the following details: (1) furlough start date; (2) furlough end date (if not known, state this information in the text of the letter); (3) type of furlough leave—paid or unpaid; (4) additional benefits—decide if employer wish to pay any benefits during the furlough or not.
- Additional Duties. Some employers may want to include a non-compete clause in the text of a furlough letter to ensure their employees do not participate in competing activities. If this is the case, employers must, in their turn, offer an employee additional compensation in exchange for the provided obligation. Usually, employers offer fully paid furlough leave. If the parties wish so, they could enter a separate non-compete agreement to agree on more details regarding the non-compete obligation.
- Conclusive Statement. It is important to inform an employee that the decision regarding the furlough is not connected in any way with their performance.
How to customize a furlough letter template at FasterDraft?
To get a fully customized legal document template, follow a few easy steps below:
- Click the create document button.
- Answer a simple question in the form.
- Select a template’s format—furlough letter template Word or PDF.
- Make a payment.
- E-sign, download, print, and send this letter to the selected employees.
Table of content
Frequently Asked Questions (FAQ)
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1. What is a furlough letter in the US?
A letter furlough is an employer’s official communication that aims to inform one or several employees about their placement on the furlough leave.
This is an unpaid type of leave during which an employee retains their job position and employment relations, but an employee:
- is not being paid;
- is not provided with work;
- must not attend work.
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2. How do I write a furlough letter for employees?
A furloughing letter is a formal document that should be written in precise and clear language to avoid ambiguity. Thus, a furlough letter includes a list of essential elements, including
- details of the sender and recipient;
- details of furlough (i.e., paid or unpaid leave, start and end date, reasons for the furlough);
- contact details and name of a person responsible for communication with employees regarding the furlough leave;
- sender’s signature and date.
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3. Can I use a furlough letter for temporary unpaid leave?
Yes, this furlough letter from employer could be used to notify employees about introduced temporary paid or unpaid leave.
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4. Are benefits still provided during a furlough?
This depends on the employer’s discretion. For example, some businesses may put their employees on unpaid furlough leave while keeping them paying non-cash bonuses like healthcare or dental insurance.
Other businesses may struggle to maintain paying even non-cash benefits. Therefore, the employee receives nothing during the furlough leave.
Finally, those businesses and organizations that could still financially afford it may provide some or part of their employees with paid or partially paid furlough leave, as well as keep certain non-cash benefits.
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5. Does a furlough letter need to include a return-to-work date?
No. Depending on the circumstances, some businesses may not be able to advise regarding the return-to-work date while issuing a furlough letter. Thus, inclusion of the furlough end date is not mandatory.
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6. Can I include confidentiality and non-compete clauses in a furlough letter?
Yes, it is possible to include additional confidentiality and non-compete clauses in the furlough letter template. These are quite common steps, considering the fact that employees will have lots of free time while not working.
However, it is important to remember that in that case, the employer must provide furloughed employees with some sort of cash or non-cash advantage.
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7. How long can a furlough last in the US?
The maximum duration for the furlough provided by the federal law cannot exceed one calendar year from the moment of the first announcement.
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