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How is Garden Leave Pay Calculated?

The garden leave provision in the Non Compete Act requires payment of 50% of your highest average base salary paid within the two years preceding the termination of employment.

Many people who are subject to non compete agreements are compensated with a base salary and a commission or incentive structure.  Particularly if you are in sales, commissions may make up a substantial portion of your total compensation.  The statute, however, only requires the payment to be based on your "annualized base salary."  This means in practice you may end up with less than 50% of your compensation as garden leave.

The statute also allows the employer and employee to agree to a different garden leave payment, as long as it is in the agreement.  It is unclear whether courts will allow employers to put in a "mutually agreed" amount that is less than 50% of base salary, though the wording of the statute suggests that this is a minimum.

If you are accepting a position with significant commission or bonus pay, and you have any ability to negotiate terms, this could be an opportunity to capture your true compensation in the garden leave provision.


Learn more here about the garden leave requirement of the Massachusetts Non Compete Act.

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How is garden leave pay calculated?

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  • Home
  • Employment Law
    • Guide To Employment Law Content
    • Employment Contracts in Massachusetts
    • Discrimination in the Workplace
    • Employment Termination >
      • Massachusetts Paid Family Leave
      • Severance Pay
      • Unemployment in Massachusetts
    • Sexual Harassment at Work >
      • Sexual Harassment in a Small Business
      • Sexual Harassment and Non Disclosure Agreements
      • Sexual Harassment and Remote Work
    • Wage and Hour Laws
    • Independent Contractor Law
    • Non Compete Agreements >
      • Are non competes enforceable
      • Massachusetts Non Compete Act
      • Pre 2018 Massachusetts Non Competes
  • Estate Planning
    • Guide To Estate Planning Content
    • Legacy Protection
    • Why You Need an Estate Plan
    • Why You Don't Have an Estate Plan
    • Estate Planning Documents >
      • Children with Special Needs
    • Planning for Assisted Living
    • Probate Process
  • Business Law
    • Guide To Business Law Content
    • Small Business Law
    • Business Contract Basics
    • Civil Suit Defense
    • Legal Issues for Start Ups
    • Trademark Basics
    • How to Incorporate
    • Sale of Business
  • About
    • Reviews
    • Slnlaw Offices
    • slnlaw core values
    • Publications and Interviews
    • New Client Intake and Consultation
    • Contact
  • Attorneys
    • Emily Smith-Lee >
      • 2018 Lawyer of the Year
    • Jenna Ordway
    • Rebecca Rogers
    • Andrew Silvia
    • Elijah Bresley
  • Legal FAQs
    • Estate Planning FAQs
    • Probate FAQs
    • Small Business FAQs
    • Wage Act FAQs
    • Commission Pay FAQs
    • Overtime FAQs
    • Independent Contractor FAQs
    • Non Compete FAQs
    • Employment Discrimination FAQs
    • Employment Termination FAQs
    • Massachusettts Unemployment FAQs
    • Severance Package FAQs
    • Medical Leave FAQs
    • Sexual Harassment FAQs
    • Employer FAQs
    • Civil Lawsuit FAQs
  • Blog