HR’s Guide to Employee Leave

Many organizations provide leave benefits, which allow employees to take time off work without the risk of job loss. Leave benefits can be paid, unpaid or partially paid, and include everything from bereavement leave and maternity leave to FMLA leave.

Generally, these policies are best clearly defined to employees to avoid confusion and administrative hassle. Some types of leave are required by law, while others are voluntarily provided at the employer’s discretion. Below, we’ll outline both kinds of leave, and what HR pros and business leaders need to know.

Disclaimer: The following is intended for informational purposes only and does not constitute legal advice. Legal requirements may change at any time.

Federally-Required Leave

Family and Medical Leave (FMLA)

The Family and Medical Leave Act is federally regulated, and provides certain employees with up to 12 weeks of unpaid, job-protected leave per year, and also requires that group health benefits are maintained during the leave.

FMLA leave applies to companies with 50 or more employees, as well as all public agencies. Eligible employees are guaranteed 12 weeks of unpaid leave per year for the following reasons:

• The birth and care of a newborn child of an employee
• Placement with the employee of a child for adoption or foster care
• To care for an immediate family member with a serious health condition
• To take medical leave when the employee is unable to work due to a serious medical condition.
• Time taken off due to pregnancy complications can be counted against the 12 weeks

Which employees are eligible?

Employees who work for an employer with more than 50 employees and have worked for their employer for at least 12 months or 1,250 hours over the last year are eligible for FMLA.

What if FMLA leave doesn’t apply?

If you have less than 50 employees, or the employee has not worked for the required amount of time to obtain FMLA eligibility, there isn’t a “one-size-fits-all” approach.

First, it will benefit most organizations to set an “Administrative Personal Leave” policy, typically spanning 6-8 weeks, to enable employees to take a period of leave when FMLA does not apply. This would be different than your PTO policies and would apply to a certain set of circumstances, perhaps mirroring FMLA.

Then, there are generally two scenarios—one where the employee has short-term disability coverage, and one where he or she does not.

With short-term disability:

The employee can take any accrued PTO to cover benefit deductions. The employee can then take a period of Administrative Personal Leave pursuant to the company’s policy, until the short-term disability waiting period is met. If the employee is no longer being paid, the employee should remit payment monthly for benefit costs by personal check made payable to the employer.

Short-term disability policies can last up to 180 days or 6 months. If the employee can then return to work, an Attending Physician Return to Work Form should be provided to document any restrictions or a full release. If restricted, the company must evaluate if there is a job the employee can perform at reduced capacity. If there is not a role available, reduced or otherwise, the employee may be terminated.

Without short-term disability:

The employee can take any accrued PTO to cover benefit deductions. The employee can then take a period of Administrative Personal Leave pursuant to the company’s policy. If the employee is no longer being paid, the employee should remit payment monthly for benefit costs by personal check made payable to the employer.

If the employee can then return to work, an Attending Physician Return to Work Form should be provided to document any restrictions or a full release. If restricted, the company most evaluate if there is a job the employee can perform at reduced capacity. If there is not a role available, reduced or otherwise, the employee may be terminated.

The major difference between the two scenarios is the amount of time allowed on leave before termination. Without a short-term disability policy, the employer may choose to terminate at the end of the company’s Administrative Personal Leave period.

Other Types of Leave

Federal law does not require payment for time not worked, including jury duty, sick leave, holidays, personal leave, funerals, or vacations. These policies are generally an agreement between employers and their workforce. Below are some common practices for each kind of leave.

Bereavement Leave

There are no federal regulations around bereavement or funeral leave, though many employers choose to provide it at their discretion. It is typically taken by an employee due to the death of another individual, generally a close relative or friend. Some organizations have an official policy, while others allow this kind of leave on an ad-hoc basis.

Election Day

Federal law does not require employers to provide paid or unpaid time to vote, but states have varying regulations.

Holidays

Many employers provide established paid holidays as a part of their compensation and employee benefits package. Hourly employees are less likely to have paid holidays, and part-time employees rarely have paid holidays.

The most common paid holidays in the U.S. are:

• New Year’s Day
• Memorial Day
• Independence Day
• Labor Day
• Thanksgiving Day
• Christmas

Some organizations also recognize:

• Martin Luther King Jr. Day
• President’s Day
• Easter
• Columbus Day
• Veterans’ Day
• Black Friday
• Christmas Eve
• New Year’s Eve

Some employers offer one or more floating paid holidays. This can benefit employees who observe other religious or personal holidays.

Jury Duty

Federal law does not require payment for time not worked, including jury duty, though some states require employers to pay employees who are asked to serve on juries.

Military Leave

Employees are entitled to time off at full pay for certain types of active or inactive duty in the National Guard or as a Reserve in the Armed Forces. Further, the Uniformed Services Employment and Reemployment Rights Act requires employers to provide reemployment to active duty military and National Guard Services.

Parental and Maternity Leave

Paid parental leave is a type of employee leave where employers grant an extended leave of absence to teammates, typically for the birth or adoption of a child. It is sometimes referred to as maternity leave or paternity leave. 

Per FMLA, both male and female employees are allotted 12 weeks of unpaid family leave after the birth or adoption of a child. Paid family leave is required by three states. Other organizations choose to provide paid parental leave in an effort to promote recruitment, retention, and employee satisfaction.

For organizations that have decided to make a change to their parental leave policy, use this template to announce the updates.

Personal Leave or Vacation Leave

Federal law does not require paid personal or vacation leave, though most organizations provide paid time off for personal use. There are generally three approaches to PTO:

Lump-Sum (Annual Allotment):

Lump-sum refers to a strategy whereby employees are given a set number of days per year. The days are given all at once and may either expire at the end of the year or roll over to the following year.

The date for the expiration and rollover will typically be either the first of the year or the employee’s hire date. 

Accrual Bank:

The accrual bank method works a bit differently than the annual allotment method. Rather than receiving a lump sum of days that can be either rolled over or used within the year, employees will accrue PTO days typically on a quarterly or monthly basis. 

There is no rollover policy as the days are based on accrual as opposed to a yearly system. It is normal for a positive limit to be in place. In other words, there is a maximum amount of days that can be spent. 

Unlimited PTO:

The Unlimited PTO plan is based on the idea that employees should have the opportunity to decide when they wish to take their vacation time. 

With this method, there are virtually no parameters outlining when or how much PTO and employee can use. The goal here is to provide employees with the flexibility to choose the days they wish to take off, so long as they complete their work and the team is not suffering as a direct result of said time off.

While less common than the other two PTO approaches, this method has grown to become an increasingly desired benefit as employees seek greater work/life balance.

Sick Leave

Federal law does not require paid sick leave, though many organizations provide it. Some organizations choose to allot sick days specifically, while others have an “umbrella” PTO policy.

Umbrella Leave Policies

Under an umbrella PTO policy, employees have either an allotted, accrued or unlimited number of paid time off that they use for holidays, vacation, personal reasons, and illness. This is administratively easier to manage, though some organizations prefer to specify by type of paid leave.

Unpaid Leave

Outside of FMLA, there is little federal or state regulation around unpaid leave, which employees may want to take for a variety of reasons. Employees may not have enough PTO accrued, or may have other situational scenarios occur. In general, it comes down to employer discretion.