Leave without pay: Overview, definition, and example
What is leave without pay?
Leave without pay (LWOP) refers to a temporary period during which an employee is authorized to take time off from work without receiving their regular salary or wages. While on LWOP, the employee typically retains their employment status and may still be eligible for certain benefits, depending on the employer’s policies and applicable labor laws.
For example, an employee may request LWOP for personal reasons, extended travel, or medical needs when they have exhausted their paid leave entitlements.
Why is leave without pay important?
Leave without pay is important because it provides employees with flexibility to address personal, medical, or family needs without permanently leaving their job. It supports work-life balance and allows employees to handle extended periods away from work while maintaining their employment status.
For employers, LWOP policies help retain valued employees by offering an alternative to resignation in situations where paid leave is insufficient. Additionally, clear LWOP policies reduce misunderstandings and ensure consistent treatment of employees.
Understanding leave without pay through an example
Imagine an employee exhausts their annual paid leave but needs additional time off to care for a family member. The employee requests and is granted one month of LWOP. During this time, they do not receive their salary but remain employed and return to work when the leave ends.
In another example, an employee requests LWOP to take a sabbatical for personal development. The employer approves a three-month period of unpaid leave, during which the employee retains their health insurance coverage, but no wages are paid. This arrangement allows the employee to return to their position after the sabbatical.
An example of a leave without pay policy clause
Here’s how a leave without pay clause might appear in an employee handbook:
“Employees may request Leave Without Pay (LWOP) for personal, medical, or other valid reasons. LWOP requests must be submitted in writing and approved by the employee’s manager. During LWOP, the employee will retain their employment status but will not receive salary or wages. Benefits eligibility during LWOP will be determined in accordance with Company policy and applicable laws.”
Conclusion
Leave without pay provides employees with flexibility to manage personal or professional needs without losing their job, while also helping employers retain talent and foster goodwill. A clear LWOP policy ensures transparency, reduces misunderstandings, and supports both employees and businesses in handling extended leave arrangements effectively.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.