It’s a harsh reality of business that, during uncertain times, you need to make hard decisions and compromises. And whether you're scaling back operations temporarily or responding to economic shifts, furloughs can be a tool to retain talent while managing costs.
However, the rules around furlough vary in the US. Some states have additional requirements beyond federal law, and you need to adhere to those rules if you have employees in those states.
In this guide, we’ll discuss the federal guidelines (and your responsibilities as an employer), and then break down the specific rules for all 50 states. So let’s begin.
What exactly is a furlough?
A furlough is a temporary, unpaid leave of absence where employees remain on your company’s books but don’t work or receive pay for a set period. Furloughs differ from layoffs in that they signal an intent to rehire and maintain the employment relationship.
For employers, they are a way to reduce payroll costs while preserving jobs and avoiding the expenses of rehiring. Conversely, for employees, furlough offers a chance to retain health benefits and qualify for unemployment (depending on state laws and individual circumstances).
What do you need to know before implementing a furlough?
If you have exempt employees (typically salaried), they must not perform any work during a furlough week — including checking emails. If they do, they may be entitled to full pay under federal law, which can significantly impact your finances and budget management.
You should also consider the following:
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Unemployment eligibility. As mentioned, most furloughed employees can apply for unemployment benefits under federal law, but these benefits are administered at the state level. As a result, eligibility and amounts depend on the state’s criteria.
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Benefits continuity. Under the federal COBRA law, employees may be eligible to continue benefits if a furlough results in the loss of active health coverage. As the employer, you can choose to keep benefits active during the furlough (if the plan permits), although you should check with your benefits provider first to confirm how coverage is handled.
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Communication. Clear, transparent communication with employees is critical to maintaining trust and morale during a furlough.
What is the federal furlough law?
There is no single federal law that specifically governs furlough in the US. However, there are other federal laws that address how furloughs must be handled, especially in relation to employee rights and employer responsibilities. These are:
The Fair Labor Standards Act (FLSA)
The FLSA governs wage and hour rules, and dictates the rule mentioned above that exempt employees must be paid their full weekly salary if they perform any work during a furlough week.
Note that non-exempt employees are usually only paid for hours actually worked, so furlough doesn’t generally raise wage compliance issues for this category of workers.
The WARN Act
The federal Worker Adjustment and Retraining Notification (WARN) Act generally requires employers with 100 or more employees to provide 60 days’ notice in advance of mass layoffs or plant closings.
However, whether a furlough triggers a WARN notice depends on its expected duration and how many employees are affected. Some states have their own “mini-WARN” laws with stricter thresholds or additional requirements, which we’ll cover below.
Furlough laws by state
With all of the above in mind, here’s a full breakdown of the furlough laws in each state:
Alabama
Alabama does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Alaska
Alaska does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Arizona
Arizona does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Arkansas
Arkansas does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
California
California has its own WARN Act (Cal-WARN), which requires employers with 75 or more employees to provide 60 days' notice for mass layoffs, relocations, or terminations affecting 50 or more employees. Furloughs of any duration may trigger Cal-WARN requirements.
Colorado
Colorado does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Connecticut
Connecticut does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Delaware
Delaware does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Florida
Florida does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Georgia
Georgia does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Hawaii
Hawaii does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Idaho
Idaho does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Illinois
Illinois does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Indiana
Indiana does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Iowa
Iowa does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Kansas
Kansas does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Kentucky
Kentucky does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Louisiana
Louisiana does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Maine
Maine does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Maryland
Maryland does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Massachusetts
Massachusetts does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Michigan
Michigan does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Minnesota
Minnesota does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Mississippi
Mississippi does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Missouri
Missouri does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Montana
Montana does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Nebraska
Nebraska does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Nevada
Nevada does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
New Hampshire
New Hampshire does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
New Jersey
New Jersey has its own WARN Act, requiring employers with 100 or more employees to provide 60 days' notice for mass layoffs, transfers, or terminations affecting 50 or more employees.
New Mexico
New Mexico does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
New York
New York has its own WARN Act, requiring employers with 50 or more employees to provide 90 days' notice for mass layoffs, relocations, or terminations affecting 25 or more employees.
North Carolina
North Carolina does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
North Dakota
North Dakota does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Ohio
Ohio does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Oklahoma
Oklahoma does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Oregon
Oregon does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Pennsylvania
Pennsylvania does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Rhode Island
Rhode Island does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
South Carolina
South Carolina does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
South Dakota
South Dakota does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Tennessee
Tennessee does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Texas
Texas does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Utah
Utah does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Vermont
Vermont does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Virginia
Virginia does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Washington
Washington has enacted its own version of the WARN Act, known as the "Securing Timely Notification and Benefits for Laid-Off Employees Act" (WA WARN). This law requires employers with 50 or more employees to provide 60 days' advance written notice to affected employees, unions, the state's Employment Security Department, and local government officials before certain mass layoffs or business closures.
West Virginia
West Virginia does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
Wisconsin
Wisconsin has its own "mini-WARN" law, the Wisconsin Business Closing and Mass Layoff (WBCML) law, which applies to employers with 50 or more employees. It requires a 60-day notice for business closures affecting 25 or more employees (or mass layoffs affecting either 500 employees or at least 25% of the workforce — whichever is greater).
Wyoming
Wyoming does not have specific state furlough laws, but employers must adhere to federal regulations, including the FLSA and WARN Act.
How can Remote help?
Navigating furloughs is never easy, but when done right, they can be a strategic move to protect your workforce and your business. By understanding both federal and state laws, you can reduce legal risk and take care of your people during challenging times.
This can be complex and time-consuming, though, especially if you’ve never had to go through the process before. And if you have employees in multiple jurisdictions, it can get even more precarious.
When you hire and manage your people through Remote, we ensure you are fully compliant with the relevant laws in every country and state. We work with you to make the furlough process painless, not just for you but for your people, too.
To learn more about how we can remove all your employment, HR, and compliance headaches, speak to one of our friendly experts today.