A company to whom I provide employment advice is considering the implementation of a furlough to its employees. Does it run a significant risk of

1.  Anytime you choose to fire one employee and not the other you are "discriminating" within the dictionary definition of the word. 2.  However, not all discrimination is illegal.  So if an employer fires all of the New York Yankees fans and keeps all of the Texas Rangers fans, it has discriminated, but not on an illegal basis, because there is no protection in the law (at least in Texas) for Yankees fans. 3.  An employer which needs to furlough or lay-off employees due to economic reasons must choose the employees it will lay-off without regard to things like race, age, gender, religion, etc. all of which are illegal grounds of discrimination. 4.  If the sole basis of a lay-off is that the terminated employee is a regular employee and the retained employee is a contractor, then there is no illegal discrimiation.  Now to a bigger point. There is no such thing as a contract employee.  The worker is either an independent contractor or an employee.  Many employers attempt to avoid workers compensation expenses and liability, overtime expenses, benefit expenses, and employment taxes by calling an employee a contractor.  The test to determine the difference is too long and complicated for this answer.  However, the saying that "if it walks like a duck and quacks like a duck it probably is a duck" is a good summary of that discussion.  If the employer gets this issue wrong or is misclassifying an employee as a contractor intentionally, the potential liablity is significant if it gets caught.