Employees often have concerns when an employer places them on administrative leave. This situation puts into question an employee's future, and he might have additional concerns about finances. Employees on administrative leave must understand how their situation affects their ability to draw unemployment compensation.
Administrative Leave with Pay
Employers choose when they wish to grant paid administrative leave to employees. Paid administrative leave provides the employee with full compensation at his usual pay rate. In most cases, paid administrative leave can last for any length of time. Administrative leave with pay generally occurs when an employee faces a temporary personal issue that affects his ability to work. For example, he might receive pay if he needs time off to care for an ill spouse, child or parent. Once the situation no longer exists, the employer must end the period of administrative leave and bring the employee back to the work force.
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Administrative Leave Without Pay
Employers sometimes place employees on unpaid administrative leave. This occurs most often when an employee is under review for a potential workplace violation or a criminal matter. Employers do not terminate the employee until the review is completed. If an employer decides that an employee on unpaid administrative leave should retain employment, the employer must compensate the employee for the unpaid leave time. State laws limit the length of unpaid administrative leave, and some states limit when an employer can place an employee on unpaid leave. For example, Ohio state law allows an employer to place an employee on unpaid leave for no more than two months and only for felony crimes.
Unemployment compensation provides eligible displaced employees with an income while they are not earning an income from work. Employees on leave for conduct review can file for unemployment benefits, but they will not receive a decision on benefits until it is determined whether the employer intends to lift the leave and compensate them for the unpaid administrative leave time. If the employer does not lift the ban, the employer terminates the employee. The employee then is unlikely to receive compensation because unemployment is not available to individuals who are terminated with just cause for conduct reasons. The employee would need to show that the cause of the firing was not just. Meanwhile, an employee on paid administrative leave is not unemployed and is being compensated for work. Therefore, that employee cannot receive unemployment compensation.
If an employee on administrative leave submits a written or oral resignation, the employee cannot receive unemployment compensation unless he can prove to the appropriate state agency that he quit for good cause. If the employer terminates the employee, the worker can file for unemployment benefits. In some instances, an employer will terminate an employee who files an unemployment claim during unpaid administrative leave.