Human Resources Certification Institute (HRCI) Practice Exam 2026 - Free HRCI Practice Questions and Study Guide

The term 'furlough' in HR practices refers to a temporary leave of absence from work, typically without pay. This practice is commonly utilized by employers during times of financial difficulty or organizational restructuring when it becomes necessary to cut costs while retaining employees for future needs.

Furloughs allow organizations to manage workforce reductions without resorting to permanent layoffs, thereby keeping valuable talent on staff who can return to work once the organization stabilizes. This approach also helps employees maintain some level of employment status and may allow them to access benefits that could be lost in the event of a permanent layoff.

In contrast, a permanent layoff involves the termination of employment, which is not indicated by a furlough. Mandatory overtime does not align with the concept of furlough, which involves time away from work, while permanent assignments refer to changes in work positions rather than time-off arrangements.