Leave Without Pay (LWP)

LWP versus unauthorised absence

Both produce a salary deduction, but they are different events. LWP is sanctioned: the employee applied, the manager approved, and HR knows the person will return. Unauthorised absence is an employee not turning up without approval; repeated instances are a disciplinary matter and prolonged absence can be treated as abandonment under the standing orders or contract.

Recording the difference matters for continuity of service, for the way the absence appears in the attendance register, and for the message it sends to the rest of the team.

Effect on salary and statutory contributions

LWP days are deducted from gross using the same divisor as LOP. EPF falls because basic plus DA is lower, and the days are reported as NCP days in the ECR. ESI falls with gross. If LWP spans an entire month, there is no wage and therefore no contribution, which can create a gap in ESI contribution history and affect benefit eligibility.

Leave accrual under the Factories Act is based on days worked; long LWP reduces the days that count toward the 240-day qualifying threshold and the 1-day-per-20-days accrual.

• Deduction: per-day pay × LWP days, on all fixed components
• EPF and ESI reduce proportionately; report NCP days
• Long LWP can reduce earned-leave accrual for the year
• Continuity of service is generally preserved when leave is sanctioned

Policy design

A good LWP policy states when it is available (after paid leave is exhausted; for specified reasons such as medical, family or study), the maximum duration in a year, the approval level required, whether weekly offs and holidays inside an LWP block are paid, and the consequence of not returning on the agreed date. Many companies cap LWP at a fixed number of days a year and require a written extension beyond that.

Decide explicitly whether weekly offs falling inside an LWP spell are paid. Treating them as unpaid is the sandwich rule and must be written down to be enforceable.