Furlough employees

Learn how to furlough an employee in Gusto. This is also how to handle a leave of absence.

What a furlough means

Furlough is when you place an employee on a temporary, unpaid leave due to a downturn in business or off-season, but you want them to come back in the future. This is different than an employee requesting a leave of absence for personal or medical reasons.

Furlough an employee in Gusto

Furlough and leaves of absence are handled the same way through Gusto. Do not dismiss the employee. Instead, skip them on payroll until they come back to work.

Furloughed employees who have benefits with Gusto

Placing an employee on furlough does not end their benefits. However, carriers’ rules differ—to stay compliant, reach out to your carrier to find out how long an employee can keep their health benefits while they're not actively working.

Once an employee comes back to work and is paid again through payroll, we’ll apply catch-up deductions to cover any missed benefits contributions. When an employee is on furlough or leave, you need to pay the entire health insurance premium to the carrier. This means that you also need to cover the employee’s part of the premium until they come back to work.

Dismiss or lay off an employee

If an employee will not be coming back to work, you can dismiss them.