An authorized period of absence granted to an employee after exhausting all paid leave balances, resulting in proportional salary deductions.
- Category
- Attendance & Leave
- Legal status
- Governed by Indian law
- Relevant to
- HR, managers & employees
- Reading time
- 3 min
What is Leave Without Pay (LWP)?
Leave Without Pay (LWP) is an approved leave status granted when an employee requires extended time off for medical emergencies, personal affairs, or exams, but has exhausted all accrued paid leave balances (Earned, Sick, Casual). While the absence is excused and job security remains intact, no salary is disbursed for those days.
Key takeaways
- 1Leave Without Pay (LWP) is an approved leave status granted when an employee requires extended time off for medical emergencies, personal affairs, or exams, but has exhausted all accrued paid leave balances (Earned, Sick, Casual).
- 2While the absence is excused and job security remains intact, no salary is disbursed for those days.
Why Leave Without Pay (LWP) matters
Allows employees to manage critical personal emergencies without facing termination for abandonment or absconding.
How Leave Without Pay (LWP) works in practice
- 1
Set the policy
Define how Leave Without Pay (LWP) works: eligibility, accrual or limits, approval flow and carry-forward rules.
- 2
Capture data
Record Leave Without Pay (LWP) through biometric, mobile or web check-ins and leave requests rather than paper registers.
- 3
Approve & regularise
Managers review exceptions, missed punches and requests related to Leave Without Pay (LWP) within a fixed window.
- 4
Feed payroll
Lock the cycle so Leave Without Pay (LWP) flows into salary, loss-of-pay and encashment calculations.
Real-world example
An employee exhausts their leave balance during surgery recovery and is granted 15 days of approved LWP by HR, preserving their employment status.
Indian statutory reference
Regulated by internal company leave policies and state Shops & Commercial Establishments rules.
Rates, limits and state rules change often. Confirm against the latest notification or with your compliance advisor.
Best practices and common mistakes
Best practices
- Publish a clear policy for Leave Without Pay (LWP) and keep it in the employee handbook.
- Use one source of truth for attendance, leave and shift data.
- Set approval timelines so requests do not pile up before payroll.
- Audit overtime and loss-of-pay entries each cycle.
- Align policies with the applicable Shops & Establishments rules.
Common mistakes
- Applying Leave Without Pay (LWP) differently across teams, which causes disputes.
- Letting attendance corrections happen after payroll is processed.
- Not tracking leave balances in real time.
- Ignoring state-wise holiday and weekly-off rules.
Managing Leave Without Pay (LWP) in SleetHR
SleetHR manages Leave Without Pay (LWP) with configurable policies, self-service requests and approvals, and sends the final numbers to payroll automatically.