Leave of Absence Policy: Everything You Need to Know

Having a leave of absence policy protects your company from excessive employee absenteeism.

What Is A Leave Of Absence?

A leave of absence, generally at the request of an employee, is time off from work for a specific reason and for a specified amount of time. For an employee who acts as a family caregiver, a leave of absence can give them time to fulfill certain responsibilities or handle a family emergency. It also provides time for those employees with a serious health condition. It is sometimes used in conjunction with family, sick, or bereavement leave. It's wise for companies to have a written process for the purpose of extending time off for extenuating circumstances in case an employee needs more time.

It's important to balance the needs of an employee with the potential impact that time off will have on the company. Authorizing a leave of absence on a case-by-case basis can ensure you can more easily cover your needs as well as theirs. While employees may not accrue any benefits while they are on leave, previously attained benefits that were accrued before their leave began should be maintained.

Time off is considered a leave of absence when an employee requires time off but it is not covered under their existing benefits. These would include paid time off, vacation pay or holiday pay.

While an employee can often use accrued leave such as vacation or sick time for a leave of absence, unpaid leave usually occurs once these benefits have all been used. While leave may be allowed in the same way as paid time off the employee is not compensated for a leave of absence.

A leave of absence is designed to extend time off for an employee beyond their traditional, paid time off. It is meant to allow for continued employment even if they have used up all of their accrued time off. Whether it is by choice or because of state or federal law, employers may decide to offer leave depending on the individual circumstance or employee needs. During this time it is sometimes necessary for an employee to pay for, or otherwise provide for, insurance such as health or dental.

Types of Leaves of Absence

Employers will offer a leave of absence for many different reasons. Some of those reasons are required or governed by law. Other reasons may be out of compassion or to create a happy work environment. If you have negotiated a contract with a union or employee then you are legally obligated to stand by that contract. If you run afoul of the law you may be required to pay a fine and restitution. If you violate a contract a judgment may be won against you. Having clearly defined policies will mitigate these possibilities and make you less likely to be found in the wrong. Making the right decisions for the company and your employee can promote a positive work environment and limit any possible liability. Some types of leaves of absence include:

  • Parental leave (maternity or paternity leave)
  • Involuntary leave
  • Voluntary leave (for reasons other than maternity/paternity)
  • Mandatory leave

Parental leave may be necessary for a mother or father upon the arrival of a new baby. Newborns require constant attention, so it may be necessary for an employee to miss an extended period of work to make necessary arrangements to care for the new addition to their family.

Involuntary leave might become necessary if an employee is accused of wrongdoing and an investigation needs to take place. An employee who is suspected of improper behavior might need to be absent for a full, proper investigation to occur.

Voluntary leave may be available to an employee for a variety of reasons; maternity or paternity leave might be considered a form of voluntary leave, but many other reasons exist for an employee to require an extended absence from work. Company policy will typically dictate voluntary leave options, as this is not generally governed by any laws. These policies should be laid out in clear language in your company's employee handbook. However, voluntary leave may also be a stipulation within an employment contract or due to a collective bargaining agreement with a union. In those instances, employers are legally bound by those contracts.

Mandatory leave is typically governed by state and federal laws. A mandatory leave of absence is usually for medical reasons. It is largely governed by two federal laws: the American's with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA). Other possible laws you may encounter will include jury duty, military leave, or other types of leave governed by the state. Employees who are eligible for leave under these laws are protected against being fired by their employer. While laws may have exceptions or different sets of rules based on the number of workers you employ or where you are located, they are granted job protection under the law.

Leave is not always just for medical or family reasons. It is appropriate, in some situations, to grant personal leave or to extend an employee's time off under certain circumstances. An educational opportunity, for instance, which may benefit both employer and employee may be an instance when an employer would grant an employee personal leave.

Employee Absenteeism

Recent studies have shown that merely one employee's absenteeism can have a huge impact on a company's bottom line. It can account for thousands of dollars in lost revenue annually. Knowing how to minimize the effects a leave of absence can have on a company is incredibly important. It's equally important to balance an employee's need for time off with the effect that absence can have on productivity and profitability. If a dispute does arise, it is in an employer's best interest to safeguard themselves against laws designed to protect workers when a leave of absence occurs.

If you need help learning more about a leave of absence policy, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.