Catherwood LibraryILR School

As consumer spending continues to slow down, many companies searching for creative ways to cut costs in the face of falling demand and falling profits are using voluntary or required unpaid leave either as a substitute for, or in combination with, layoffs. Compared with companies that lay off workers during downturns, companies that use unpaid leave often benefit from higher employee morale and fewer understaffing problems when business picks up again. In spite of the benefits associated with using unpaid or reduced-pay leave instead of layoffs, companies must be careful with the duration of such measures---while most employees are willing to accept a few days to a week of unpaid leave, longer leaves can lead to as much fear of job-security as layoffs.