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Unpaid leave

Employees can only take unpaid leave with your agreement. However, you might like to allow an employee to take unpaid leave if they do not have sufficient leave to attend to other commitments in their life.

Employees may request unpaid leave to travel, study, care for someone who is ill, and similar reasons.

They might also wish to take time off without pay to deal with personal or family matters, including family violence. The It's not OK website provides information on how your workplace can play a role in preventing family violence and create workplace safety plans for any of your employees who are experiencing family violence. It also has tips for employers and managers (external link) .

What you need to know

If an employee takes more than a week of unpaid leave over the year, you can choose to:

  • move the date of their annual leave entitlement anniversary out by the amount of unpaid leave they took, (not counting the first week). This means they will get their annual leave entitlement later each year from then on; 
  • decide not to include the unpaid weeks when determining if the employee has worked continuously for 12 months. When you work out their average weekly earnings (which is used to determine how much they get paid for time on annual leave), you reduce the divisor by the number of whole or part weeks they took as unpaid leave, not counting the first week. Eg, if they took three weeks' unpaid leave, you would calculate their average earnings by dividing their income by 50 instead of 52. In this instance, the unpaid leave won't have any effect on when they become entitled to their annual leave or how much they get paid for it.
  • decide that the unpaid leave won't have any effect on when they get their annual leave or how much they get paid for it. 

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