A furlough is a temporary, unpaid break that you, the employer, start. You use a furlough when business slows down or during an off-season, and you plan to bring the employee back later.
A furlough is different from an unpaid leave, which is time off the employee takes for personal or medical reasons.
In Gusto, we handle furloughs and leaves of absence the same way. To furlough an employee, skip them on payroll until they return to work. Do not dismiss them.
Important: Skipping an employee on payroll does not remove the per-employee charge on your invoice.
A furlough or unpaid leave does not end an employee's benefits. Each carrier sets its own rules for how long an employee can keep health benefits while not actively working. Contact your carrier to stay compliant.
During the leave, the employee's paycheck may drop to $0. We cannot take premium deductions from a $0 paycheck, but the premium is still owed. To keep coverage active, pay the full premium to your carrier — including the employee's share. We do not pay carrier invoices for you.
When the employee returns and gets paid through payroll again, we resume their normal deductions and may apply catch-up deductions to cover the premiums we could not take during the leave.
If an employee is not coming back, you can dismiss them in Gusto.