Furloughs can be a great way to reduce your business costs without the need for more permanent reductions, such as a layoff or reduction in force (RIF). The first step - after deciding that a furlough is the right option for you - is to craft a notification letter. This is where having a sample furlough letter can come in handy.
What Is a Sample Furlough Letter?
The sample furlough letter presented here is a customizable document that will showcase how you can alert your staff members that a your company will be holding a furlough in the near future.
Like all sample letters, this is a jump off point for you to use at your organization. All organizations are different and require different clauses inside the letter and overall policy. Because of this, we highly recommend that you work closely with your legal counsel during any RIF or reduction event to make sure you are complying with all local, state, and federal laws.
And with that, let’s jump right into how you have use this sample furlough letter at your business.
First Off, What Is a Furlough?
A furlough, in short, is an unpaid, mandatory leave of work.
The best way to think about furloughs is to look at seasonal businesses, such as landscapers, ice cream shops, and things of that nature.
For an ice cream shop, it may not make logical business sense to remain fully operational during the winter months when not many people will be buying your ice cream. So, instead, many shops will simply furlough their employees and close up until the ice cream season opens up again.
During the furlough, the staff members are not paid, but they still technically have their jobs. When the business reopens to full strength, those workers are welcomed back like they never left.
For other businesses outside of seasonal occupations, it can make sense to use a furlough as a cost saving measure. For example, a plan could furlough employees for a week to balance its budget or it could hold a furlough every Monday for a few months to do the same.
Furloughs are extremely customizable, which makes them an attractive alternative to layoffs.
Despite that fact, there are still some downsides to furloughs, too. You can read all about the pros and cons of layoffs and furloughs in our post here.
So, You’ve Decided to Furlough Staff Members. Now What?
If a furlough seems like a great option for your workforce, it’s time you start gathering all of the internal documents you will need to have a successful event.
One of the first documents is a furlough notification letter that you can send out to your staff members, which alerts of them of the furlough, explains how the event will work, and offers them a way to ask questions.
The best way to learn how to do this is to use a sample furlough letter to keep yourself on track. Again, no sample is going to be a one-size-fits-all document, but there are threads that run through all of them.
Let’s get started with our sample furlough letter to get you on the right track.
Writing a Furlough Letter: The Intro
Just like any letter, you need to start by addressing who you are sending it to.
Something like this:
Dear [first name],”
Note: everything you see in brackets inside our sample furlough letter is a place where you must fill in your own information.
Once you have that out of the way, move right into what the letter is about. Do not try to beat around the bush here. Don’t try to make small talk. Just like a layoff letter, you need to get to the point because you have to convey a large amount of information quickly and succinctly.
Here’s how this first paragraph may look:
“The purpose of this letter is to formally notify you that your position as [insert title] on the [insert department or team name] is being eliminated temporarily due to [insert reason]. Your last official day of work will be [insert last day]. Your salary and benefits will continue at their current level during the notification period. Please be assured that this action in no way reflects dissatisfaction with your job performance.”
This first paragraph gets right to the core of the message. It also alerts the staff that this move does not reflect how they are performing. This is vital because you need to explain that they are still valued and needed, and that this move is merely temporary.
A Sample Furlough Letter: The Middle, Part One
Yes, the middle has two parts (surprise!).
The middle of the letter is where a lot more of the details come out. You need to explain the length of the furlough (if you have determined how long it will last at this point), what a furlough is, and then move into benefits.
Here’s how we structure this section in our sample furlough letter:
“The length of this furlough is unknown at this time. We will do our best to provide current information as our organization moves to have employees come back to work.
Furloughs are a company-initiated short-term temporary unpaid leave of absence. The furlough period and provisions may be changed or terminated at the sole discretion of the Company, and does not create any employment contract, express or implied.
During the furlough period, your health and welfare benefits will continue (if applicable), and will accrue at employee cost during this time. Benefit cost repayments will be required upon potential return to work, if applicable. If you do not return to work, you will not be billed for the benefit premiums accrued. If you have a final paycheck, the Company will deduct any premiums in arrears that it is able to, and anything outstanding beyond that amount will not be billed back.”
We left in that the furlough length is yet to be determined. Again, this is because it will have to be custom to your organization based on the needs of the company.
Benefits are another issue that largely depends on how your company operates and also how the laws work that govern where you do business. Always double check these to make sure that they are accurate and that you are fully complying.
Writing a Furlough Letter: The Middle, Part Two
The second part of the middle is all about unemployment benefits.
Normally, furloughs are too short of a time period for staff members to collect unemployment benefits. However, in some situations they can. This is where your legal team, again, comes into play.
We recommend always having a spot in the letter where you give details as to where an employee can find out more about unemployment benefits just to make sure that they have all of the information possible.
Here’s how this section can look:
“During the furlough period, you may file for unemployment compensation. Please refer to your state’s guidelines for unemployment compensation regarding specific details and provisions surrounding application, eligibility, and collection of benefits. To assist you in applying for any eligible benefits, please reference the state in which you are employed at www.dol.gov or by calling 1.866.4.USA.DOL.”
From here on out, it’s just a matter of closing the letter.
A Furlough Letter: Signing Off
Like any letter, you need to offer a way for people to get in touch with you and then sign off.
Keep this part short and sweet. Again, remember to simply stay on task.
“We wish to thank you for your contributions to the [ insert team or department] at [organization name].
If I can offer assistance in any way, please contact me.
You will likely have many staff members asking questions about the furlough. It may make sense to hold a meeting for people with questions to attend so that everyone is on the same page.
Also, furloughs tend to go over best when employees are expecting them (in seasonal situations, for example) but can be a shock for companies that have never used them before. Be prepared for this. You can read our complete furlough guide here to make sure you have answers to anything that may arise.
Using a Sample Furlough Letter: The Takeaways
If you use this sample furlough letter, make sure you fully customize it for your workforce. Also, we can’t say it enough: always work closely with your legal counsel to ensure that you are complying with all local, state, and federal laws when holding a reduction or cost saving event.
Want to download our full sample furlough letter? Click here: