Staff Leave Without Pay – The dark horse of Employee Benefits

Swinging from a luxury privilege to a lawful entitlement – Leave Without Pay (LWOP) is on the rise with both employers and employees warming up to the idea of unpaid absence from work

Not long ago, a friend of mine at work seemed bit perturbed with the recently applied leave of absence without pay.

On asking what was troubling her, she expressed that though the decision to attend her kids’ educational needs was a natural and happy one, she was tensed about the scenario when she returns to work – Would I be able to draw the same respect and authority? Would my benefits remain intact? Will it affect my chances of promotion later? What if I have to start all over again? Or worse the bosses show me the exit door!

These were some concerns that clouded her mind.

Time off from employment has a tendency to raise quite a few eyebrows. And if you add the word “unpaid leave” to the equation, the curiosity and doubts become stronger.

Ultimately employee anxieties root from company policy and culture.

Employers who approach this concept with positive outlook and ensure crisp clarity in its implementation enjoy significant tangible and intangible returns.

Decrypting Staff Leave Without Pay

LWOP (Leave Without Pay) is an approved temporary absence from duty in a non-pay status, usually requested by an employee owing to one of the following reasons:

  • Personal Leave (For cases when employee has used all of their paid time off and vacation)
  • Parental Leave (Maternity/Paternity Leave, Adoption, Bonding & Child rearing)
  • Family Medical Leave (For attending health conditions like Illness, Injury or disability concerning self or family)
  • Family issues and emergencies
  • Leave related to domestic violence, stalking and sexual assault
  • Educational Leave (Study or Training)
  • Pursuing development of personal interests
  • Participation in voluntary social service and community programs
  • Military Leave and government service in public interest
  • Any other reason cited by employee and approved by organization policy

Under certain circumstances, the employer may also initial leave without pay if there are heavy budget constraints owing to weak economy, dynamic market forces or internal issues.

As per, 31% of US employees are ready to take unpaid sabbaticals to avoid layoffs.

31% of US employees are ready to take unpaid sabbaticals to avoid layoffs

The Payment Policy with respect to LWOP has some overt rules that remain more or less same the world over.

These include:

  1. The employment status of the employee remains intact with same pay and position on resuming the services;
  1. In most cases, unpaid leave becomes an option only when the accrued paid leave is depleted and used first;
  1. LWOP doesn’t cover suspension, furlough or an unauthorized absence from work;
  1. As per US Employment Laws, LWOP is a matter of administrative discretion and may not be demanded by employees unless they are disabled veterans requiring medical treatment, are members of armed forces and National Guard or entitled to 12 workweek LWOP as per the Family Medical Leave Act (FMLA);
  1. LWOP is not intended for exploring other job opportunities, internships or contract positions;
  1. Unpaid leave doesn’t usually exceed 12 months unless the reason is Military service or special approval from organizational authorities;
  1. Time spent on LWOP is considered creditable service for meeting the time-in-grade requirements for promotion;
  1. Depending on the duration of leave without pay, there may or may not be an implication on his/her Health benefits, Retirement benefits and Life Insurance.

Staff LWOP – Considerations for Employers and Employees

Organizations across the globe have welcomed the concept of unpaid absence from work as it helps them to make their best people stay and become a progressive brand name to work for without bearing financial responsibility.

Employees on the other hand can manage their personal life without compromises or worrying about job security.

It is however essential that both the parties appreciate this benefit by supporting it with accountable actions to avoid ugly outcomes of the deal.

Policy Handbook

The employers should meticulously state the clauses with all possible scenarios of taking unpaid leave and potential impact on other benefits.

Understanding by the employee should be guaranteed by a mutual sign-off.

Employees on their part should prepare a detailed list of questions to discuss with HR to evade surprises later.

The records should be updated with employee leave plan and the compensation and benefits department should be intimated for necessary action w.r.t salary payout.

Smooth Step down

The employee needs to place trust in colleagues who are going to fill in their shoes while they are gone.

This requires encouraging and empathetic environment where people work as a team and senior managers can assure the employee on safeguarding their interests while they are away.

Clients/Vendors/Other patrons in contact with the concerned employee should be routed to the new official by giving relevant and real time context.


Anyone and everyone related with the employee owing to professional association should be informed about their leave, reason, and expected date of re-joining to discourage judgments and trash talk.

Employees should pass the job critical information to relevant touch points and during the leave period, should keep the HR in loop on how the leave is progressing, any changes in the joining date or whichever information is requested by the authorities from time to time.

Productivity Boosters

When the employee returns to work, it should be a hassle-free transition without prejudices to help employee perform and reach desired productivity levels faster.

This requires equal weight pulling by the employees’ manager and colleagues who can support the catch-up phase with necessary tools and information.

In case the vacancy in which he/she was working gets eliminated during the leave period, their candidature should be considered for comparable jobs within company.

Losing out on vacation time by managing employee leaves the old way?

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Mitalee Chhatre, a true professional with over 5 years of corporate experience in Human Resources and Health Sector. Contributor on CakeHR where tracks the newest trends and practices of the work-life world.

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Written By

Mitalee Chhatre

Mitalee, a true professional with over 5 years of corporate experience in Human Resources and Health Sector. Contributor on CakeHR where tracks the newest trends and practices of the work-life world.