Garden Leave: What It Is and How It Works

Garden leave is a period where you remain employed and paid but don't work. It's commonly used when employees resign or are let go, especially in competitive industries like finance, tech, and consulting. This guide explains how garden leave works, your rights during it, and how to make the most of this unusual employment situation.

What Is Garden Leave?

The Basic Concept

Garden leave (or gardening leave) is a notice period arrangement where:

• You remain an employee of the company
• You continue to receive salary and benefits
• You're not required to work or come to the office
• You're typically restricted from starting new employment

The name comes from: The idea that you could spend the time "working in your garden"—essentially being paid to stay home.

Why Companies Use Garden Leave

Protecting business interests:

• Prevents you from immediately joining competitors
• Allows sensitive information to become stale
• Maintains client relationship transitions
• Reduces risk of taking colleagues with you

Alternative to non-competes:

• More enforceable than non-compete agreements
• You're compensated during the restriction
• Less litigation risk
• Clearer terms

Smooth transitions:

• Allows handoff of responsibilities
• Client notification period
• Project completion if needed
• Maintains company control

Industries That Use Garden Leave

Most Common In

Finance and banking:

• Investment banking
• Hedge funds
• Private equity
• Wealth management
• Trading

Technology (increasingly):

• Tech executives
• Sales leadership
• Engineering leadership
• Competitive product roles

Professional services:

• Consulting firms
• Law firms
• Accounting firms
• Executive roles

Other:

• Media and entertainment
• Pharmaceutical sales
• Senior executives generally

How Garden Leave Works

Triggering Garden Leave

When it activates:

• You resign from your position
• You're terminated (sometimes)
• Your employment agreement includes garden leave provision
• Company chooses to enforce it

Who decides:

• Company typically has discretion
• May be automatic per contract
• Sometimes negotiable

What Happens During Garden Leave

Your status:

• You're still an employee
• You're paid your regular salary
• Benefits continue
• You're just not working

Your obligations:

• Don't work for competitors
• Don't start new employment
• Don't solicit clients or colleagues
• Remain available if needed
• Maintain confidentiality
• Follow other employment terms

Company's obligations:

• Continue paying your salary
• Maintain your benefits
• Honor employment agreement terms
• Eventually provide references

Typical Duration

Length varies by:

• Your seniority level
• Industry norms
• What's in your contract
• Company discretion

Common periods:

• Junior roles: 2-4 weeks
• Mid-level: 4-12 weeks
• Senior/Executive: 3-6 months
• Highly sensitive roles: 6-12 months

Your Rights During Garden Leave

What You're Entitled To

Compensation:

• Base salary continues
• Benefits continue
• May include bonus (depends on terms)
• Vacation accrual (typically)

Employment status:

• You're still employed
• Service time continues
• Employment protections apply
• Can't be treated as terminated

What You Can Do

Generally permitted:

• Take vacation or travel
• Pursue personal projects
• Prepare for job searching
• Update resume and LinkedIn (carefully)
• Network (within limits)
• Attend to personal matters

Gray areas (check your agreement):

• Taking classes or certifications
• Consulting (usually not for competitors)
• Starting a business (may be restricted)
• Board positions

What You Cannot Do

Typically prohibited:

• Start working for a competitor
• Begin new employment
• Solicit former clients
• Recruit former colleagues
• Share confidential information
• Disparage the company

Garden Leave vs. Similar Concepts

Garden Leave vs. Severance

Aspect	Garden Leave	Severance
Employment status	Still employed	Terminated
Work expectation	No work	N/A
Benefits	Continue	Usually end (COBRA)
Restrictions	Typically yes	May have some
Duration	Notice period	Lump sum or period

Garden Leave vs. Non-Compete

Aspect	Garden Leave	Non-Compete
Compensation	Yes, full salary	Typically none
Enforceability	High (you're paid)	Varies by state
Duration	Usually shorter	Can be longer
Employment status	Still employed	Terminated

Garden Leave vs. Administrative Leave

Aspect	Garden Leave	Administrative Leave
Reason	Transition period	Investigation/pending
Your choice	Resignation/termination	Company decision
Future	Moving on	Uncertain
Restrictions	Starting new work	Usually stay available

Negotiating Garden Leave

When Joining a Company

In your offer negotiation:

• Review garden leave provisions
• Negotiate shorter duration if possible
• Clarify what triggers it
• Understand compensation during leave

When Leaving a Company

Potential negotiations:

• Request shorter garden leave
• Ask to be released from restrictions
• Negotiate overlapping start date
• Request garden leave be paid as lump sum

Sample approach: "I understand the company's interest in a garden leave period. Given that my new role is in a different sector and doesn't create competitive risk, would the company consider reducing the garden leave period or releasing me early?"

Making the Most of Garden Leave

Rest and Recharge

Use the time to:

• Recover from work stress
• Take a vacation
• Spend time with family
• Pursue hobbies
• Focus on health and fitness

Prepare for What's Next

Professional preparation:

• Refresh your skills
• Take courses or certifications
• Read industry publications
• Plan your approach to new role
• Organize your professional materials

Personal preparation:

• Handle medical appointments
• Complete personal projects
• Organize finances
• Relocate if needed for new job

Build Your Future

Career development:

• Network (within restrictions)
• Research your new company/industry
• Set goals for your next role
• Work with a coach or mentor

Caution:

• Don't violate your restrictions
• Be careful with public activities
• When in doubt, ask your former employer

Common Questions

Can I Start My New Job During Garden Leave?

Generally no. Garden leave typically prohibits starting new employment. Violating this could:

• Breach your employment agreement
• Result in legal action
• Forfeit remaining garden leave pay
• Damage your reputation

Workarounds to discuss:

• Request early release
• Negotiate buyout
• Ask new employer to wait

What If My New Employer Wants Me to Start Sooner?

Options:

• Negotiate with current employer for early release
• See if new employer can wait
• Understand the legal risks of early start
• Consider consulting an attorney

What to tell new employer:

• Be upfront about garden leave
• Explain it's a standard provision
• Discuss possible timeline flexibility

Can I Be Fired During Garden Leave?

Technically you're still employed, so:

• You have employment protections
• Termination would follow normal rules
• It could end garden leave early
• You'd potentially be free to start new job

What Happens to My Benefits?

During garden leave:

• Health insurance continues
• 401(k) contributions continue (from salary)
• Other benefits typically continue
• You're still an employee

Confirm specifics with HR.

Do I Have to Be Available?

Depends on your agreement:

• Some require reasonable availability
• You may need to answer questions
• Handoff activities might be required
• Being unreachable could be problematic

Best practice: Stay reachable and responsive.

What If I Violate Garden Leave?

Potential consequences:

• Legal action for breach of contract
• Injunction to stop working
• Damages claims
• Loss of remaining pay
• Impact on references

Not worth the risk in most cases.

International Considerations

Garden Leave Is Common In

• United Kingdom (very common)
• Australia
• Hong Kong
• Singapore
• Increasingly in US for executives

Enforceability Varies

In the US:

• Not as common as UK
• Enforceability depends on state
• Must have consideration (you're paid)
• Terms must be reasonable

Consult local employment attorney if you have questions.

Special Situations

Layoff with Garden Leave

Sometimes offered during layoffs:

• Employer wants transition period
• Maintains employment for benefit purposes
• Keeps you from competitors during notice
• May be generous gesture

Garden Leave and Bonuses

What happens to:

• Pending bonus: May be owed, check terms
• Future bonus: Typically forfeited
• Pro-rated bonus: Depends on policy
• Retention bonus: May have clawback

Garden Leave and Stock

Equity considerations:

• Options may continue vesting
• Check exercise deadlines
• RSU vesting may continue
• Understand your grant agreements

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Key Takeaways

1. Garden leave = paid not to work — You're still employed but don't come to work
2. Common in competitive industries — Finance, tech, consulting
3. You have obligations — Can't start new job or compete
4. Benefits continue — Salary, health insurance, etc.
5. Use it wisely — Rest, prepare, but follow the rules
6. Negotiate if needed — Early release may be possible
7. Don't violate terms — Legal consequences are real

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Related Resources:

• Severance Negotiation →
• Non-Compete Agreements →
• Tech Industry Layoffs →
• First 24 Hours After Layoff →