Leave of Absence: The Basics for Employers

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Every employer will eventually face an employee's request for a leave of absence. These requests often fall outside the scope of standard Paid Time Off (PTO), sick leave, or vacation policies. Whether the leave is for medical or personal reasons, it's important for employers to manage these requests in line with their policies, procedures, and applicable federal and state laws.

What is a leave of absence?

A leave of absence is a designated period of time an employee will be away from work to tend to medical, personal, or other needs.

What are common types of leave?

Employees may need time off for health issues, family care, a new baby, military service, or for personal reasons. Understanding the different types of leave helps to provide the right support to employees when needed.

Common leave types include:

• Medical and Disability Leave: When an employee takes time off to address their own health issues, like an illness, injury, or disability.
• Family and Caregiving Leave: When employees need time off to care for a family member's health issues.
• Parental Leave: Provided to qualifying parents for a period to care for and bond with a new child due to birth, adoption, or foster placement.
• Personal/Other Leaves: Other leave types may include military service, bereavement, sabbatical, or personal development leave.

What are the laws to consider when an employee requests a leave of absence?

When receiving a leave request, employers should consider federal and state laws based on the employee’s work location, which may provide extended leave, job protection, and benefits continuation for medical, family, caregiving, and military leave, among others. 

Federal laws include:

• Family Medical Leave Act (FMLA): The FMLA requires most employers with 50 or more employees within a 75-mile radius to provide up to 12 weeks of unpaid, job-protected leave for various reasons, including the birth or adoption of a child, serious health conditions, or military service of a close family member.
• Americans with Disabilities Act (ADA): The ADA requires employers with 15 or more employees to prevent discrimination against individuals with disabilities and provide reasonable accommodations, such as leave or work-related adjustments, based on the individual’s needs and disability, unless doing so would cause an undue hardship on the employer Examples of work-related adjustments as accommodations may include a reduced work schedule, remote work, specialized equipment, or other adjustments that benefit both the employee and employer.

State laws include:

• State Family and Medical Leave Laws: Many states have their own family and medical leave laws that can differ from the FMLA, including coverage rules, eligibility, and leave duration. Some states also require paid or partially paid leave, unlike the FMLA’s unpaid leave. 
  • Examples of state family and medical leave laws include the California Family Rights Act (CFRA), Connecticut Family Medical Leave Act (CT FMLA), and the New Jersey Family Leave Act (NJ FLA), among others.

• State and Locality Disability Accommodation Laws: Many states and localities have their own disability accommodation laws that may expand employees' rights and apply to smaller employers. These laws often require an interactive process, which is a two-way conversation between the employee and employer when requesting accommodations. It is a general best practice to communicate accommodation decisions in writing, regardless of location, however, these laws specifically mandate written documentation to ensure compliance. 
  • State and local laws that build on ADA requirements include the California Fair Employment and Housing Act (FEHA) and the New York State and New York City Human Rights Laws.

If applicable, these leaves may run concurrently with wage replacement programs the employee may be eligible for depending on various factors such as location and/or enrollment in private insurance programs.

What are wage replacement benefits and how do they work during a leave of absence?

Wage replacement programs provide partial pay to employees who are unable to work during a leave of absence. These benefits might come from state programs like disability or paid family leave, or from private insurance such as short-term disability. 

Employers can create their own company policy to supplement wages that are not covered by wage replacement programs. These additional payments, known as "top-off" pay, are administered directly by the employer to help make up the difference between an employee's usual salary and their wage replacement benefits.

Which states offer wage replacement benefits to employees?

Below is a list of states that currently offer wage replacement benefits, along with upcoming state programs. For additional details, please visit the resources linked below.

Upcoming State Wage Replacement Programs:

What are some best practices for managing a leave of absence?

Having a clear process for managing employee leave is essential for staying compliant, keeping communication smooth, and helping employees feel supported while they are out. Here are some best practices when handling leave requests from start to finish:

1. Document the employee's leave request through a leave of absence request* form.
2. Determine if federal or state leave laws and wage replacement programs are applicable based on the employee’s eligibility status and where they perform work.
3. Align your company policy with relevant leave laws and wage replacement programs.
4. Inform the employee about their leave entitlements and other details by issuing a leave of absence letter*.
5. If applicable, provide the employee with information on how to file a claim, whether through Justworks (for short-term disability or NY benefits only) or the applicable state.
6. If the employee is enrolled in medical, dental, vision, or other benefits, address any benefits deductions during the leave period.
7. Upon the start of the leave, manage pay according to company policy in Justworks.
8. Track the leave based on the dates provided by the employee or as outlined through the doctor's recommendations (if applicable).
9. As the employee’s return date approaches, communicate proactively to confirm return details.
10. Once the employee has returned to work, adjust payroll accordingly.

Other Resources

Explore additional resources for more information on employer compliance, disability insurance, and parental leave policies, among other topics, to help manage leaves effectively below:

• Employer's Compliance Starter Guides: Index
• Parental Leave 101 - Programs at Play
• Voluntary Short-term Disability Insurance
• Noncontributory Short-term Disability Insurance
• Voluntary Long-term Disability Insurance
• Noncontributory Long-term Disability Insurance
• How To File a Claim for MetLife Benefits with Justworks
• Intro to Parental Leave: What Employers Should Know about FMLA and Leave Policies
• Statutory or Discretionary Leave of Absence: What’s the Difference?
• Setting Up Your First Parental Leave Policy
• 6 Paid and Unpaid Leave Laws Every Employer Should Know About

Notes

*Be sure you’re logged into your Justworks account with administrative permissions to access Mineral.

Disclaimer

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.