What is Unpaid Leave?
Unpaid leave is defined as time off from work during which a worker keeps their employment but is not paid.
Unpaid leaves diminish an employee’s work time, days, weeks, or months and vary based on the employer’s demands. Companies frequently use a rotating furlough system, in which employees take their unpaid days at various points throughout the month. Another option is to implement unpaid leave all at once, spanning a few weeks or months.
In the event of a company failure, requiring employees to take an unpaid vacation can:
- Reduced costs
- Remove the need to hire new people.
- Keep existing employment safe.
- Maintain the business’s viability till the economy recovers.
Unpaid leave has concerns that HR directors should be aware of:
- Employees who find work elsewhere
- Work progress and momentum are disrupted.
- Reduces the motivation, engagement, and productivity of the remaining workers.
