What is Unpaid Leave? Definition and Legal Obligation

unpaid leave

The term unpaid leave might be unfamiliar for some people. In fact, there’s still a lot who think this leave is the same thing as a normal leave when it’s actually different.

Unpaid leave is a type of leave that allows the company to not give salary for the workers. The policy regarding this leave is also mentioned in regulations and laws. Keep reading for a detailed explanation.

What is unpaid leave?

As an employee, there will be times where you’re not able to come to work and require you to take leave. In general, there are two types of leave when it comes to work. They are unpaid and paid leave.

What is qualified as paid leave? Usually when there’s a member in a family that gets married, passes away, maternity leave, circumcising or baptizing children, and experiencing menstrual pain for women, then your leave will be paid. While any circumstances that are not mentioned above will be counted as unpaid.

So the point is, if the company accepts a leave application that allows its workers to be absent for a certain period of time and not receive any salary, then it is known as unpaid-leave. Proposing this kind of leave can’t be done by all employees unless they have worked for at least 1 year.

Then, how long does an employee can propose this leave? The duration of time for taking this leave tends to be tentative and unspecified. It can be longer than annual leave, but one thing for sure is that the HR and employees will discuss it beforehand to come up with a deal.

Unpaid leave policy in Indonesia

In Indonesia, employee leaves such as annual leave, important leave, big leave, and menstruation and maternity leave are regulated in the Labor Law No.13 Year 2003. However, the leaves that were mentioned before are categorized as paid leave, not unpaid. That’s why it is not mandatory for a company to implement the not-paid leave.

But then, what’s the legal obligation for this leave? Article 93 section 1 becomes the legal obligation for this type of leave that mentions, a salary can not be paid if the worker is also not doing their work.

Things to consider before proposing unpaid leave

Compared to a normal leave, proposing this leave is actually much easier to be accepted. But, it does not mean you should do it. These are several things that you need to understand first.

The company will not give a salary

If you take this leave, it means the company doesn’t have any obligation to pay for your salary when you are off working, and this has been regulated in article 93 section 1 of the Labour Law.

Consider the risk

Every decision comes with a risk. Therefore, before proposing this leave, make sure that you have considered all the risks that will be faced such as how this will impact the company or there’s a possibility where you will miss an opportunity due to your absence.

Also, the company may look for another candidate to fill your position if you do not come to work after your leave ends.

Pay attention to the deals and company terms

You should pay attention to any deals and company terms that you have agreed on. Make sure there is no one between you and the company being the aggrieved party.

The company and employees are still bound by a working agreement

Having this leave doesn’t mean you’re no longer working in that company. Apart from the long period of absence, employees are still bound by a working contract as long as the company doesn’t terminate their employment. When the time of leave is over, employees must get back to work.

How to count unpaid leave

The salary calculation for this leave is not stated in the law, it is the company who has the right to set rules and conditions regarding this leave. But mostly, the calculation is done using this formula:

Basic salary – (salary per day x number of days of leave)

The calculation may be different in each company, depending on the deal that they’ve made with the employee. But for sure, having this type of leaves means your basic salary will be deducted.

Unpaid-leave is a type of leave at work, but it is different from the other types due to its policy. This is why it is necessary for you to pay attention to the details before proposing this kind of leave.

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