Garden Leave Clause Explained: What It Means and Costs

Garden leave is the period between resigning and actually leaving, during which you remain employed, remain paid, and are told not to come in. You are on the payroll and off the premises. The name comes from the idea that you have nothing to do but tend the garden.

It sounds generous. It is not designed to be. Garden leave exists to keep you away from clients, colleagues and information while what you know goes stale — and to stop you starting somewhere else, because you are still bound by your duties to your current employer.

What a garden leave clause actually says

A typical clause gives the employer the right — not the obligation — to require you to stay away for all or part of your notice period. Read it for four things:

Who can trigger it. Almost always the employer, at their discretion, on either party giving notice. You cannot usually demand garden leave.

What you keep. Salary continues. Whether bonus, commission, pension contributions, car allowance, health cover and share vesting continue depends entirely on the wording. A clause that says "salary" and stops there is doing real work.

What you must still do. Most clauses keep you bound by confidentiality, exclusivity and the duty of good faith. You typically cannot start another job, and you may be required to remain contactable and to return equipment.

Whether it offsets your restrictions. This is the clause that matters most and the one most often missing.

The set-off question

If your contract also contains a non-compete, the critical question is whether time on garden leave is deducted from the restricted period.

Without a set-off clause, six months of garden leave followed by a twelve-month non-compete keeps you out of the market for eighteen months. With one, the twelve months starts counting from the day notice was given, and garden leave runs concurrently.

The wording to look for:

Any period of Garden Leave shall be set off against and reduce the duration of the restrictions in clause [X] on a day-for-day basis.

Well-drafted contracts include it because courts look less favorably on restrictions that stack. If yours does not, this is the single highest-value amendment to ask for — and one employers concede routinely, because most of them have not thought about it.

What garden leave costs you

The pay continues, so the cost is not financial in the short term. It is:

• Skill and network decay. Six months out of a fast-moving market is a real professional cost.
• A delayed start. Your new employer must wait, and some will not.
• Lost variable pay. If your bonus depends on being in employment on the payment date, or on performance you can no longer deliver, garden leave can quietly remove it.
• Stalled vesting. Some equity plans stop vesting on the date active duties cease rather than on the termination date. Check which — the vesting cliff is unforgiving about dates.

What to negotiate

A cap on duration. "Not exceeding three months" rather than "for all or part of the notice period".

Explicit set-off against every post-termination restriction.

Full remuneration, not just base salary: "salary and all contractual benefits, including pro-rated bonus and continued vesting".

A release mechanism. A clause letting the employer end garden leave early and release you from the remaining notice — useful when both sides want a clean break.

Permission to take another role with consent not unreasonably withheld, where the new employer is genuinely non-competing.

Garden leave in different jurisdictions

In the UK, garden leave is well established and enforceable where the contract provides for it. Courts will not enforce a garden leave period that is unreasonably long any more than they would an equivalent non-compete.

In the US, garden leave is less standard but is becoming more common precisely because several states have restricted or banned non-competes. Some states now treat paid garden leave as a substitute mechanism; in a handful, paying the employee during a restricted period is a condition of enforceability. Because the rules differ sharply by state and are changing, the governing-law clause in your contract determines which test applies to you.

FAQ

Is garden leave paid?

Yes. You remain employed throughout, so salary continues. Whether bonus, commission, benefits and equity vesting continue depends on the exact wording of the clause — a clause referring only to "salary" may silently exclude everything else.

Can I start a new job during garden leave?

Usually not. You are still employed, so the exclusivity and good-faith duties in your contract still apply. Some employers will release you early or consent to a non-competing role, but you need that in writing.

Does garden leave count towards a non-compete?

Only if the contract says so. Without an explicit set-off clause, the restricted period starts when employment ends, so garden leave and the non-compete run one after the other rather than together. Ask for a day-for-day set-off.

Can my employer force me onto garden leave?

If the contract gives them that right, generally yes. If it does not, requiring you to stay away while withholding work can amount to a breach — particularly for roles where the ability to practice or perform matters, such as traders, surgeons and performers.

How long can garden leave last?

It cannot exceed your notice period, and it should be no longer than genuinely needed to protect legitimate business interests. Anything beyond three to six months for a non-executive role is worth challenging.

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