LOP Reversal

LOP stands for the Loss of Pay reversal and this is a process of reinstatement or restoration of the pay deductions or salary decrements that were previously imposed on employees for reasons such as unauthorized absences, unpaid leave, disciplinary actions or salary adjustment. LOP reversal usually happens when the employee's condition changes and the reasons for the pay deduction have become invalid or unrealistic. The employers may reverse the LOP deductions through payroll adjustments, salary corrections, or retroactive payments so that employees receive their correct amounts of wage based on actual work hours, attendance or performance.

Example of LOP Reversal

For example, if Tom, an employee, takes an unpaid leave from work to deal with personal issues, this may result in a loss of pay deduction for each day he does not work. Nevertheless, after evaluating Tom's employment situation, the employer concludes that the leave was a result of factors totally outside of his control and reverses the LOP deductions. The employer will begin the LOP reversal process through the payroll department correcting Tom's payroll to account for the pay deductions withheld during his absence. As a consequence of the LOP reversal, Tom receives retroactive payment of his unpaid wages, which equalizes his financial compensation with the one he would have got if he had not taken unpaid leave. The LOP reversals maintain fair compensation practices by giving the employees a chance to offset temporary absences or unforeseen circumstances that might lead to their unavailability for work.