Unpaid leave and what the employer needs to know

Unpaid leave is leave during which the employee takes time off without pay — sometimes a statutory right, sometimes not. As an employer, you may not simply reject a request: you must take it seriously as part of good employership, even if there is no statutory right. Below, you can read what unpaid leave is, what consequences it has, and what rules apply.

What is unpaid leave?

Unpaid leave is leave during which the employee takes time off without continued payment of wages — unlike paid leave such as vacation days. Employees request it for a variety of reasons, such as caring for a sick family member, taking a sabbatical, or pursuing further education.

What are the consequences of unpaid leave?

For the employer: you cannot temporarily call upon the employee, but you do not have to pay wages either.

There are further consequences for the employee :

• during the leave, the employee in principle does not accrue vacation days (with exceptions, such as supplementary maternity leave and long-term care leave);
• the right to a benefit is in principle retained, unless the leave is long;
• a lower income may entitle you to allowances such as healthcare or housing allowance;
• there may be consequences for pension accrual, depending on the sector and scheme;
• it can lead to a higher contribution towards school or study costs.

TODO_VERIFY: the precise consequences for holiday accrual, benefit entitlements, allowances, and pension (and the time limits thereof) are subject to change and sector-dependent — check the current rules.

What rules apply to unpaid leave?

An employee submits the request to the employer. Whether you may refusedepends on the reason: for some forms, there is a statutory right to (unpaid) leave. However, even without a statutory right, you must take into account the principle of good employership: you must take the request seriously and cannot simply reject it.

If, after careful consideration, you decide not to grant the leave, ensure a clear justification and sound reasoning — preferably in writing, to avoid later disputes.

Replacement during unpaid leave

Sometimes you need to arrange a replacement for the duration of the leave. This can be done via a replacement agreement, whereby a temporary worker takes over the duties. Make clear agreements regarding this; the replacement may need to start earlier to be properly trained.

Frequently Asked Questions

May I refuse a request for unpaid leave?

Sometimes a statutory right exists and you cannot refuse. If that right does not exist, you must still seriously consider the request as a good employer and provide a well-reasoned justification for a refusal.

Does an employee accrue vacation days during unpaid leave?

In principle not, with exceptions such as supplementary maternity leave and long-term care leave. Check the current rules and the collective labour agreement.

Does unpaid leave affect benefits or pensions?

Entitlement to benefits is usually retained, but long-term leave and pension accrual may have consequences, depending on the scheme. Have this checked on a case-by-case basis.

Do I need to arrange a replacement?

That may be necessary. With a replacement agreement, you formalize the temporary takeover of duties; train the replacement in a timely manner.

Need help with a leave policy or a replacement agreement?

We assist employers with a clear policy regarding unpaid leave and with drafting replacement agreements, including advice on the legal aspects.

Our employment law are ready to assist you. Schedule a no-obligation intake consultation.