What Qualifies for an Unpaid vs. Paid Leave of Absence?

October 8, 2018
What Qualifies for an Unpaid vs. Paid Leave of Absence?
From family emergencies to medical situations, there are many reasons why your employee may need to take a leave of absence. As an employer, knowing when these periods of leave qualify as paid or unpaid can be difficult. Here’s everything you need to know so you can be sure you’re giving your employees the correct paid and unpaid leaves.

Paid Leave of absence

Vacation is the most popular type of paid absence. This type of time off is usually earned by working a certain number of days or hours throughout the year. Similarly, sick leave is another form of accumulated paid time off based on the number of days the employee works. Sick leave is defined as time an employee takes off to care for either themselves or a sick family member. Jury duty, voting, and military obligations also qualify for paid time off.  Employers are legally obligated to set aside time for employees who participate in these events and to return said employees to their position afterward. These types of paid leave are commonly referred to as “PTO” which stands for paid time off.

Parental leave

Parental leave is one of the most hotly-debated leave of absence topics. Many companies don’t offer paid parental leave, while others are seeking to change this norm by providing generous paid leave to one or even both parents. Providing parental leave is a great way for companies to attract and retain qualified staff while boosting that company culture. Ultimately, it’s still up to the discretion of the employer to cover parental leave or not (unless you live in California, New Jersey or Rhode Island, in which paid parental leave is required by law).

Family Medical Leave Act

Understanding the different types of medical leave will make it easier for you to support your employee’s needs. The Family Medical Leave Act allows employees to take up to 12 weeks of unpaid leave of absence off in order to care for themselves or someone else. However, there are a number of circumstances that must be met in order for an employee to qualify for this type of time off. An employee must have been at the job for at least one year, for example, and must have worked at least 2,040 hours during that one year period. Events that qualify under FMLA paid leave include childbirth, adoption, foster care, serious health conditions, caring for a family member with a serious health condition, or military-related reasons. Employers are only required to pay FMLA employees on leave if they still have PTO available. Many companies have begun adding extensions for employers in these situations as a way to boost company culture. Additionally, employees on paid leave can continue receiving health benefits for up to 12 weeks, as long as they continue paying contribution amounts.

Unpaid leave of absence

As you can see, there are many regulations that govern which types of absences are considered paid and which ones are not. Moreover, employees have substantial influence on how they structure the company policies to provide paid time off. When an absence doesn’t qualify for paid leave legally or by contract, employers are not required to offer compensation or benefits, nor must they return employees in this situation to their positions.
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