I read an article this morning from BNA that outlined the basics and advantages of placing employees — I assume high-quality executives and/or older workers, in most cases — on what’s called “garden leave.”
According to the article, “garden leave” is a transitional period of several weeks or months “during which a terminating employee is paid to remain at home and out of work (tending to the garden), but to be ‘on call’ to his or her former employer for as-needed transitional services.”
To me, this concept is wholly interesting and if I were in a position to choose, I’d prefer it to phased retirement. Phased retirement, in my eyes, is just a long, awkward goodbye to a worker who — thanks to a skills gap, an employer’s lack of effective succession planning or both — an employer would otherwise like to replace, but can’t yet afford to lose the employee’s institutional/project/industry knowledge.
It’s like suffering a boring party guest because they brought the wine.
Garden leave, however, takes away all the pretense and just leaves employers able to say, “Don’t call us, we’ll call you,” and the employee gets to live like Bruce Wayne until they get the signal that they’re needed to be Batman.
Plus, as the BNA article points out, another advantage is “coincidentally stalling the employee from joining a new employer.”
Not that the concept is without risk. “The structuring of garden leave severance implicates subtle, yet material, issues that include drafting for maximum enforceability, cost-benefit analyses, and compliance with Section 409A,” the article warns, adding that “this last issue has become the latest trap for the unwary.”
So, what do you think? Garden leave, phased retirement, both or neither? Share your thoughts in the comments.
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