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Last edited 18 Sep 2020
The term ‘furlough’ refers to a leave of absence or the process of granting a leave of absence. It is derived from the Dutch word ‘verlof’ meaning leave of absence. It relates specifically to a temporary absence due to the needs of the employer (although it also sometimes refers to normal leave taken by an employee). Employees may be permitted to seek other temporary employment during the period of the furlough.
The term has historically related predominately to US federal government shutdowns, but it rose to prominence in the UK during the Coronavirus outbreak when there was a requirement to furlough employees for self isolation, or because businesses were unable to operate at their normal capacity due to social distancing requirements or because of supply chain or financial problems.
Under the provisions of the Coronavirus Job Retention Scheme, businesses furloughing staff during the coronavirus outbreak are given financial support by the government for the payment of wages as well as the costs of employer national insurance and pension contributions. In addition, those made redundant after 28 February 2019 can be re-employed and placed on furlough.
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