When employees need time off, business owners and human resources professionals can often find themselves questioning how to process leaves of absence. For example, do you pay your employees for needed time off? If yes, how much? Do you need to document your employee’s time away? Do you need to comply with any state or federal laws?
It’s easy to throw your hands up in the air, but let’s face it, this doesn’t solve anything. Luckily, you have us on your side—breaking down the time-off scenarios and requirements, allowing you to best serve your employees while keeping your business compliant.
Keep reading to learn more about when leaves of absence are paid or unpaid. Also, when employees need to take time off in this continuing global pandemic, we also tackle those rules for you.
What Is Paid Leave?
To start, let’s review paid leave. Simply, paid leave is when an employee can leave their job for a period of time while still receiving full pay. Employers who offer paid leave – such as vacation time, sick leave, or time off for jury duty – often limit time away from work to a specific number of days (in the case of vacation or sick leave) or a specific number of hours (in the case of time off for jury duty).
Additionally, your state may require certain leaves of absence to be paid. For example, nine states plus the District of Columbia have enacted required paid family and medical leave programs (PFML) as of February 2021. These states include California, Massachusetts, New Jersey, New York, Rhode Island, and Washington. Colorado, Connecticut, and Oregon have also enacted mandated paid family and medical leave programs; however, they are not yet effective.
Not all of these states mandate full compensation payments for PFML. Some states, for example, only require partial compensation during these types of leaves. Therefore, it’s critical to understand your state laws regarding paid and unpaid leaves of absence.
What Is Unpaid Leave?
Unpaid leave, on the other hand, is a leave of absence from work – for a specific period of time – without compensation. However, as is typical with state and federal laws, it’s not always clear if an employer must pay compensation during leave or the leave is truly uncompensated.
For example, let’s look at the Family and Medical Leave Act (FMLA). Under the FMLA, qualified employers must grant employees time off for certain events, such as the birth of a child or to care for a parent, spouse, or child during a serious illness. This law also protects your job in that your same job (or one similar) must be available when the employee returns. However, the FMLA does not require that this leave is paid.
Another federal law that can result in unpaid leave is the Americans with Disabilities Act (ADA). Under the ADA, employers are required to grant reasonable accommodations (unless it creates a hardship on the business) to disabled job candidates or employees enabling “an individual with a disability to have an equal opportunity not only to get a job, but successfully perform their job tasks to the same extent as people without disabilities.” For example, if a disabled employee requires a period of temporary leave, those leaves are typically unpaid.
And, military duty leaves are typically unpaid as well. Any military leave is governed by the Uniformed Services Employment and Reemployment Rights Act (USERRA). Similar to FMLA, this law guarantees that the military member’s job remains available when they return from service. This applies to military members in active or reserve service.
As with compliance with any law, it’s always best to consult with your business’s attorney to avoid any unintended consequences of granting leave under the FMLA, ADA, or USERRA.
What Are Some Examples of Paid Leave?
Now that we’ve looked at leaves of absence at a higher level, let’s dig down into paid leave with specific examples.
Paid Time Off (PTO)
The most common – and most commonly understood — paid leave of absence includes both vacation time and sick leave. Many employers now combine both sick days and vacation days under one umbrella – referred to as paid time off or PTO.
Many employers require their workers to earn PTO by accruing days for both vacation and sick leave. For example, if you work for a company for one year, you may have five days of PTO, whereas if you’ve worked for a company for ten years, you may have accrued 15 days of PTO. Note that these accrual requirements and the ultimate amount of PTO earned vary from company to company.
No federal law requires private employers to pay for vacation or sick time. However, as a popular employee benefit, most companies offer paid time off as part of their compensation strategy.
Keep in mind, though, many cities, states, and the federal government may have to adhere to laws surrounding paid time off for illness. For example, in 2016, the U.S. Department of Labor published a final rule for Executive Order 13706, requiring paid sick leave for federal contractors. So again, it’s always best to consult with an attorney that’s familiar with your industry when establishing your PTO policies and procedures.
Like PTO, many employers grant paid time off for federal holidays, such as New Year’s Day, Memorial Day, the Fourth of July, Thanksgiving, and Christmas. However, granting time off for federal holidays often depends on the industry. For example, where your local doctor’s office may be closed on the Fourth of July, your favorite restaurant may be open (or open during “holiday” hours).
Additionally, you may receive additional time off for holidays, depending on your employer. For example, some employers list Martin Luther King, Jr. Day or President’s Day. Additionally, governmental employers in specific states may provide paid time off for state holidays, such as Texas Independence Day falling on March 2. As with general PTO, private employers are not required to offer paid holiday days, but like PTO, they also represent a common and appreciated employee benefit complementing compensation packages.
Although not mandated by federal law, many employers offer paid time off for jury leave as well. Currently, the following states and Washington D.C. require employers to pay their employees for time off for jury duty: Alabama, Colorado, Connecticut, Louisiana, Massachusetts, Nebraska, New York, and Tennessee.
The following states “prevent employers from creating policies that require employees to use their paid sick leave (vacation, sick, personal or PTO) for a jury duty summons”: Alabama, Arizona, Arkansas, Indiana, Louisiana, Mississippi, Missouri, Nebraska, Nevada, New Mexico, Ohio, Oklahoma, Utah, Vermont, and Virginia.
Although paid time off for jury duty may not be required, state and federal laws often prohibit terminating an employee’s employment because they served on jury duty. In addition, others prohibit docking an employee’s pay for serving.
Employers often offer bereavement leave to employees that have lost a loved one to death. However, no federal laws require that an employer offer paid leave for these events. Further, most states don’t have paid bereavement laws on the books either. So, typically, it’s up to the employer if they want to create a paid benefit for bereavement leave.
Note that employees may take time off under the FMLA; however, this is unpaid leave. Additionally, employers may be required to give employees unpaid time off for bereavement under Title VII of the Civil Rights Act of 1964, if the funeral leave relates to religious accommodations and no undue hardship exists for the employer in doing so.
Some employers may choose to pay employees for time taken off to vote. However, no federal law requires paid leave for voting, and state laws vary. (Are you noticing the trend?)
In some states, employers are required to give a specific amount of time off to vote, and this time may be paid or unpaid. Some states require employers to give their employees time off to vote, only if they cannot vote before or after work when the polls are open. Additionally, most states prevent employers from terminating employees for taking time off work to vote.
Let’s look at a couple of examples. In Georgia, for instance, if employees provide reasonable notice to their employer, they are entitled to two hours of unpaid leave to vote in “any municipal, county, state, or federal political party primary or election for which such employee is qualified and registered to vote.”
In Wyoming, employees are entitled to “one hour of paid voting leave if the employee has less than three consecutive nonworking hours to vote.” And, in Massachusetts, “manufacturing, mechanical and mercantile employees must be allowed to vote during the first two hours that the polls are open, if they provide advance notice to their employer.”
What About Leaves of Absence During COVID?
In 2020, the global pandemic seemingly hit the world overnight, forcing employers and employees to rethink work. A hot topic over the last (almost) two years? Leaves of absence for COVID-related events.
In March 2020, Congress passed the Families First Coronavirus Response Act (FFCRA), requiring “certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.”
Under the FFCRA, certain employers were required to pay employees for COVID-related leave in three situations:
- Give up to two weeks (or 80 hours) of paid sick leave “at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined (pursuant to Federal, State, or local government order or advice of a health care provider), and/or experiencing COVID-19 symptoms and seeking a medical diagnosis,” or
- Give up to two weeks (or 80 hours) of paid sick leave “at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine (pursuant to Federal, State, or local government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19,” or
- Give up to an additional 10 weeks of paid family and medical leave “at two-thirds the employee’s regular rate of pay where an employee, who has been employed for at least 30 calendar days, is unable to work due to a bona fide need for leave to care for a child whose school or child care provider is closed or unavailable for reasons related to COVID-19.”
However, the FFCRA expired on December 31, 2020, leaving both employers and employees wondering how to handle COVID-related leaves in 2021.
On December 27, 2020, the Consolidated Appropriations Act of 2021 was signed into law, extending some leave benefits into the new year. For example, the CCA amended the FFCRA “to allow employers to take a payroll tax credit for providing emergency paid “sick leave” and paid expanded “family and medical leave” through March 31, 2021.
Although both the leave provisions of the FFCRA and the CCA have expired, leaves of absence continue to be a hot topic as the pandemic continues into yet another year. In addition, some states are forward-looking, anticipating expanded leave laws, heightened because of COVID.
For example, California passed expanded family leave-related legislation as well as protected leave for the care of parents-in-laws for both private and public sector employees. Additionally, Illinois, New York, Oregon, and the District of Columbia passed expanded family leave-related legislation.
Thanks to the global pandemic, employers now have more on their plate when providing for their employees while keeping their businesses successfully running. However, as we continue to face this new working environment, it’s essential to stay on top of rapidly changing laws as they relate to leaves of absence – paid or unpaid.
Track Employee Call-Offs with CMS
Looking for a simple way to capture and track employee absences? Our employee call-off hotline can help you centralize and standardize your call-in processes.