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A furlough is a temporary release of a worker from their job, typically with the expectation that they will be asked to return. A layoff is usually a permanent removal from a job.

Both words can also be used as verbs. An organization can furlough employees or lay off employees. The adjective forms are furloughed and laid off. 

A furlough typically involves an employer requiring an employee to stop working for a period of time during which they will not get paid—though furloughed workers sometimes keep their benefits, such as health insurance. Furloughs can happen during government shutdowns or when a company does not need certain employees for a certain period of time but expects to need them back after that period ends.

The word layoff is typically used in the context of a company permanently letting go workers due to economic reasons (such as not being able to afford to pay them) as opposed to performance reasons (employees let go for poor performance are typically said to have been fired).

Here’s an example of furlough and layoff used correctly in a sentence.

Example: A furlough is not ideal, but at least it’s temporary—the company is doing it to avoid layoffs.

Want to learn more? Read the full breakdown of the difference between furlough and layoff.

Should furlough or layoff be used in the following sentence?

The company ordered a one-month _____ of its employees during the closure.