Garden Leave

When an employee who has resigned or been dismissed is kept away from work — but paid — through their notice period.

Garden leave (also called gardening leave) is a practice where an employee is required to serve out their notice period at home, away from the office and colleagues, while continuing to receive full pay and benefits. The name comes from the British notion of having nothing to do but tend your garden during a period when you're technically still employed but not working.

Employers use garden leave primarily to protect competitive interests during the transition. By keeping departing employees away from clients, colleagues, and sensitive information during their notice period, companies reduce the risk of the employee poaching business or staff, sharing confidential data, briefing themselves on proprietary information they'll take to a competitor, or undermining team morale on their way out.

From the employee's perspective, garden leave is effectively a paid sabbatical with significant restrictions. You receive your full salary, benefits, and in some jurisdictions continued pension contributions — but you typically cannot work for anyone else, including a new employer, during the period. This can delay your start date at a new role by weeks or months.

Garden leave is most common in the UK, Australia, and parts of continental Europe, where notice periods for senior roles routinely run 3-6 months, making the practice financially significant. In the United States, where notice periods are shorter and at-will employment is the norm, garden leave is less common but is used — particularly in financial services, law, and senior executive roles where competitive sensitivity is high.

Garden Leave vs. Pay in Lieu of Notice

When an employment relationship ends, the employer typically has two options for handling the notice period. Garden leave means the employee remains employed, receives full pay and benefits, but doesn't work. Pay in lieu of notice (PILON) means the employer terminates employment immediately and pays a lump sum equal to what the employee would have earned during the notice period, without keeping them employed. For the employee, garden leave preserves benefits continuation and employment status but delays the ability to start a new role. PILON ends employment immediately, which can be cleaner — especially if the new employer can accommodate a faster start — but may result in losing benefits like health insurance that depend on active employment. Some contracts specify which approach the employer must or may use; others give the employer discretion.

What You Can and Cannot Do on Garden Leave

  • You receive your full salary, benefits, and in some cases continued pension contributions throughout the entire period.
  • You cannot actively work for your employer — attending meetings, accessing systems, contacting clients, or completing work projects.
  • You cannot work for a competitor or start your new job until garden leave ends, unless the employer agrees to release you early.
  • You can generally engage in personal activities, travel, volunteering, or activities unrelated to your professional field.
  • Non-solicitation and confidentiality obligations remain fully in force during garden leave.
  • You continue to accrue PTO or holiday in most jurisdictions during the period.

Negotiating Out of Garden Leave

If you're placed on garden leave and have a new employer waiting, early release is worth requesting — both sides often benefit. Your current employer can backfill the role sooner; your new employer gets you started earlier. The key is to approach the conversation professionally and make clear you won't be soliciting clients or doing anything competitive during the period. Some employers will agree to a reduced garden leave period (e.g., 6 weeks of a 3-month notice) in exchange for a clean departure. Your new employer can help by being flexible on the start date, or in some cases by compensating you for the income lost due to garden leave delay.

Garden Leave in the US Context

In the United States, garden leave is most common in financial services (where regulatory concerns about information security and client relationships are acute), law and consulting (where client portability is a major competitive issue), and senior executive roles at any company (where access to sensitive strategic information creates genuine risk). For most US workers, the standard at-will employment framework means employers can simply terminate immediately rather than relying on garden leave. When US companies do use garden leave, it's typically written explicitly into an employment agreement or equity plan as a condition of receiving certain benefits — making it worth reading any employment contract carefully before signing.

Example

A senior sales director gives 3 months' notice. The company places her on garden leave — she's paid in full for 3 months but cannot work, contact clients, or join her new employer until the period ends.