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Employee leave of absence: Everything you need to know


Any business owner will tell you that it’s difficult to make a profit when your employees aren’t at work. Research proves this. Research indicates that a single employee’s absenteeism may cost a company as much as $3,600 per year, according to

As an employer, how can you minimize the effects an employee’s leave of absence has on your business, while still providing the time away from work your employees need? With a fortress of laws protecting employees, you have to practice caution to guard against even more costly litigation should a dispute arise. That’s why it’s important to have a human resources policy in place that’s clear for everyone.

Learn what to do when employees request a leave of absence from work and how to minimize the impact of their leave on your business.

What is a leave of absence?

Generally speaking, a leave of absence is when an employee is given permission to take time off from work for an extended period of time. The time that’s taken can either be paid, unpaid, mandatory or voluntary depending on the circumstances of the request.

An unpaid leave of absence typically occurs once the employee has run out of paid leave benefits such as sick days, accrued vacation days and PTO (paid time off). Depending on the employer’s unpaid leave policy, they may ensure the employee keeps their job while they’re away. This can help the employee retain health insurance coverage throughout the time of absence.

Mandatory leave vs. voluntary leave of absence

Officially, there are two types of leave: mandatory and voluntary.

Federal law and/or state laws govern a mandatory leave of absence.

  • These include medical leaves of absence governed by the Family and Medical Leave Act (FMLA) and Americans with Disabilities Act (ADA), military leave, jury duty and other state-mandated leaves.
  • Whether the laws surrounding these leaves of absence apply to you is often based on the number of employees working for your company and where an employee is working.
  • You must grant job-protected leave to eligible employees in these situations.

Voluntary leaves aren’t required by law.

  • These leaves of absence are offered as a courtesy to employees per company policy or per a collective bargaining agreement with a labor union.
  • Companies often offer medical or personal leave to employees who have exhausted all of their time off, such as sick leave and PTO, and who don’t otherwise qualify for mandated leaves. A personal leave may be granted to allow extended leave for a special circumstance, such as an educational opportunity.
  • Because these leaves are non-mandatory, you grant them based on your discretion and according to the guidelines you have set in your leave policy. Also, you do not have to offer job protection during a voluntary leave, although you may choose to do so.

Protected leaves of absence for personal reasons

These are some instances that are protected by law and require you to administer a set amount of time for each one. These instances include:

  1. Jury duty: Businesses must provide unpaid leave for employees’ jury duty service in federal courts, and most states require this as well. Under the Fair Labor Standards Act (FLSA), employers aren’t required to pay employees for jury duty service. There are many formal steps businesses should take to make sure they’re in compliance with jury duty laws and to plan for this type of employee absence.
  2. Voting (paid time off): State laws vary as to whether time off to vote is paid or unpaid and whether or not an employer is required to provide time off to vote.
  3. Military service: The Uniformed Services Employment and Reemployment Rights Act (USERRA) is a federal law that protects employees in areas such as employment, reemployment, retention in employment, benefits and more.

If employees take a leave of absence that’s not protected by law, then you have no obligation to return them to their position. Ask them to try to provide as much notice as possible so you can prepare for their absence.

What do you tell employees who use too much time off?

There are a number of reasons that might motivate employees to take advantage of your leave policy. Watch out for employees who are disengaged from their work and those who frequently take Mondays and Fridays off. Make it clear to your employee that you can’t operate a steady business without their presence.

Let your employees know that you care about their wellbeing and want to provide support, if doing so will be helpful. It is important that employees know what can and cannot be modified in their jobs. This means your job descriptions need to have essential duties (those functions that cannot be removed or changed without materially changing the job) identified. If an employee is experiencing excessive absenteeism, ask if there is something that they need to tend to, and if there is any way you, as an organization, can assist.

Designate the leave as FMLA if you are a covered employer and the employee is eligible.

How does an employee qualify for FMLA?

An employee qualifies for FMLA leave by working 1,250 hours. Here are some reasons an employee might take FMLA leave:

  • Childbirth, adoption of a child and foster care
  • Serious health condition
  • Caring for a family member with a serious health condition
  • Certain military reasons (including care of a service member)

As noted above, the FMLA requires you to hold your employees’ jobs until their leave ends, or offer one that is equivalent. An FMLA leave allows employees to take up to 12 weeks off in a 12-month period.

If their absence is not protected by the Family and Medical Leave Act (FMLA), then it’s considered a non-FMLA medical leave. However, their leave may still be protected under the ADA and ADA Amendments Act (ADAAA). In this case, your employees’ jobs and wages are still protected by law.

Am I required to continue paying salary when employees are on FMLA leave?

You are only required to continue paying employees on FMLA leave if they have available paid time off or sick time and they choose to use it, or you have a policy that requires the use of paid time off prior to leaves progressing as unpaid.

However, you may choose to write additional paid leave time into your leave of absence policy as an added benefit to your employees in certain circumstances. For example, some companies give six weeks of paid parental leave after 12 months of employment.

In any case, you should notify payroll to make them aware of any changes to your employee’s salary during the leave.

Do my employees get to keep their health benefits?

Employees can receive benefits for up to 12 weeks as long as they continue to pay their contribution amounts. Your benefit policy may also have continuation of benefits language in it for employees who do not qualify for FMLA or similar leaves.

Can employees take off for psychological reasons such as stress or depression?

Anxiety or depression is likely to be considered a disability under the ADAAA. The ADAAA applies to companies that have 15 or more employees and requires an interactive process to determine what reasonable accommodations may be available to assist employees with permanent or temporary disabilities.

In these cases, it’s best to work with an attorney or HR professional who has experience with disability leave. It could get tricky, and it might be deemed reasonable to provide a leave of absence.

What’s the difference between short-term disability and long-term disability?

Short-term disability insurance and long-term disability insurance are both designed to provide replacement income to your employees in the event they’re unable to work due to injury or sickness.

The definition of disability and the conditions under which employees can collect benefits will differ depending on the policy.

Short-term disability:

  • Covers employees for a limited period
  • Useful for major, but relatively brief, disabilities such as those suffered from an accident or a non-terminal sickness
  • Usually provides only partial income protection, often 60%

Long-term disability:

  • Generally must satisfy a time-in-service requirement before eligible
  • Used for long-term absences from work
  • Usually begins when short-term disability ends

How do I create a leave of absence request form for my business?

While there are free templates floating around the web provided by the Department of Labor and other sources, it’s better to create a custom form that fits your company’s needs and is legally compliant.

Any forms should generally ask for the start and end dates in which employees will be away from work.

Once submitted, the employee’s supervisor can approve or deny the request. It’s important to keep everything documented in case of any future disputes and ensure consistent application of the process.

However, it’s actually better to have a single point person in the company review and approve (or deny) requests than distribute it to the supervisor level. This way, there is a better chance of a consistent application of the policy and compliance with state and federal leave laws.

Update your employee handbook

To ensure compliance with changing laws, it’s a good practice to audit your leave of absence policy every two years.

This is the best method to inform employees of their rights, and for employers to know they’re compliant.

Include notification procedures and guidelines, such as calling in, and when it’s necessary to take a leave of absence versus using paid time off.

HR difficulties like employee absenteeism slow down your business. Learn how to avoid common HR oversights by downloading our free e-book, 7 most frequent HR mistakes and how to avoid them.