Definition · HR operations and employee relations
Garden Leave
Definition
Garden leave is a period during an employee's notice where they stay employed and paid but are told not to come to work, contact clients or start a new job. Employers use it to keep departing staff away from customers, confidential information and competitors until the employment ends. The name comes from the idea of spending the time at home in the garden.
Also called: Gardening leave, Garden leave clause, Paid notice without duties
How garden leave works
An employee resigns, or is given notice, and the employer places them on garden leave for some or all of the notice period. During that time the employee:
- remains an employee, receives full salary and normally keeps benefits;
- stays bound by duties of loyalty and confidentiality;
- does not perform work, attend the office or access systems unless asked;
- cannot start working for anyone else until employment ends.
The employer usually collects equipment and removes system access on the first day. It can ask the employee to be available for handover questions.
Where it is used
Garden leave is common in the UK, Ireland, Australia, Singapore and much of Europe, where notice periods of one to six months are normal for professional roles. In the US most employment is at will with short or no notice periods, so garden leave appears mainly in financial services, senior sales and executive contracts. Some US employers use a version where they pay the employee for a set period after resignation in exchange for not joining a competitor.
Garden leave vs. a non-compete
A non-compete restricts what a former employee does after employment ends, often without pay. Garden leave keeps the person employed and paid, so the restriction happens inside the employment relationship. Courts in many countries are more willing to accept garden leave than a long unpaid non-compete, because the employee is not left without income. In the UK, courts may reduce a post-employment restriction by the time already spent on garden leave.
In the US, Massachusetts' 2018 noncompetition law lists a "garden leave clause" of at least 50 percent of the employee's highest base salary as one way to provide the consideration a non-compete needs. Several states ban or sharply limit non-competes, which has made paid garden leave arrangements more attractive. Rules vary by state and country, so have counsel review any clause.
What the contract clause should say
An employer generally cannot put someone on garden leave without a contractual right to do so; in many jurisdictions, keeping someone from working without that right risks a breach of contract claim. A typical clause gives the employer the right to place the employee on garden leave for all or part of the notice period, states that pay and benefits continue, requires the employee to stay available and not contact clients or colleagues about business, and keeps confidentiality obligations in force. Keep it in the employment contract and in senior offer letters, not just the handbook.
Practical trade-offs
Garden leave is expensive: you are paying someone not to work. It makes sense where the risk is real, such as a sales director with key client relationships or a trader with live positions. For most roles, a short notice period, a non-solicitation clause and a solid confidentiality agreement are enough. Also plan the message to clients and the team; an unexplained disappearance tends to cause more rumor than the departure itself.
Frequently asked questions
What does garden leave mean?
It means an employee serving their notice period is paid but told to stay away from work, clients and colleagues, and cannot start a new job until their employment formally ends.
Do you get paid on garden leave?
Yes. Salary and normally benefits continue throughout, because the person is still employed. Bonus and commission treatment depends on the plan terms and the contract.
Can I start a new job while on gardening leave?
Usually not. You remain employed and bound by your contract, so working for another employer, especially a competitor, before your end date is typically a breach.
Is garden leave common in the US?
It is less common than in the UK or Europe because most US employment is at will. It appears mainly in finance, senior sales and executive contracts, and in some states as an alternative to a non-compete.