It also means you retain stuff like your seniority.

You remain employed during this time off, there is no re-hiring involved.

are benefits still paid by the employer?

This is Sweden so you don't have the same requirement on healthcare benefits like in the US. I imagine the biggest benefits are pension and equity. It's my impression that most pension benefits are as a percentage of the wage, so unpaid leave doesn't net you any pension. Equity I imagine depends on the language of the specific contract.

Swedish companies don't pay health insurance etc, so there isn't much benefits outside of salary.

Depends on the company. The Swedish company we run does.

What about retirement contributions?

Nah, that's usually based on salary I think. And you don't get one during this time off. You just freeze-dry your employment. Stasis basically.

In US, yes.

I've seen it happen, people take extended leave of absence on FAANG, to pursue some non profit stuff or simply to prevent burnout.

During those, you're still covered by healthcare plan, but everything else freezes: let's say you take 2 months off. Then your RSU that was supposed to vest next month is now vesting in 3 months. Your vacation days don't accrue during those 2 months, etc. Obviously, since you're not getting any salary, there's no contribution to 401k happening during those 2 months.

Well, unless a company has a specific policy, it's something you'd probably need to negotiate. What you describe seems pretty reasonable as a leave of absence for a valued employee who actually has an option to take a leave of absence but it certainly isn't something I'd assume was anything like a universal formula. (Certainly continuing healthcare is a big deal for many people unless they're covered by a spouse's policy whether or not they have to pay the company portion or not.)

They aren't under the shadow of imminent ruin due to health issues in Europe

> has to hire you back

As the guy who thought he could do better and has to come crawling back, admitting failure... that sounds awfully uncomfortable.

Maybe this is a Silicon Valley bias but I have never heard of anyone scoffing at the founders of failed enterprises. New enterprises are hard even the best prepared ones will require some luck. A successful start up ecosystem should ensure that people are not punished for trying.

Or maybe the existence of this policy acknowledges that failure is an expected outcome and people want to get back into the job market and maybe try again later.

Why? You can leave to chase an idea that will most likely turn out not to work anyway but could be a lot of fun to pursue. Or you just use the opportunity to learn new skills. Most start ups don't succeed, the performance of the founder is only one reason why it might not work out.

Is there some sort of personal failing in not being able to run a business (perhaps with a very good idea)? This really doesn't need to be influenced by some sort of pride idea.