What you need to know
If an employee takes more than a week of unpaid leave over the year, you can choose to do one of these:
- 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. For example, if they took three weeks of unpaid leave, you would calculate their average earnings by dividing their income by 50 instead of 52. 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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