From: Staffing

As life becomes more stressful and employees feel the pressures of balancing work and family concerns, time off becomes highly valuable to employees. Although conceptually, the practice of paying employees for not working is costly, time off from work is an employment benefit that far outweighs its costs. Among the many benefits for employees are rest, relaxation, a new perspective, travel, pursuit of hobbies, and release from daily employment tensions. Employers also reap the benefits when employees are rested, and relaxed employees return from a period of leave feeling refreshed — possibly with new ideas — and renewed energy for better job performance. Employers may also observe the performance of employees in new situations, as they fill in for their vacationing co-workers, potentially leading to better allocation of workforce talents.

Required Time Off

Employers are required by either federal, state, or local law to provide specific time off to employees. This includes the following:

• Time off to vote.
• Jury duty leave.
• Military leave.
• Family and medical leave.
• Other time off that may be mandated. For example, minimum sick leave hours per year.

Businesses may also offer a wide variety of paid and unpaid leave. For example:

• Holidays.
• Vacations.
• Sick leave.
• Personal leave.
• Funeral leave.
• Maternity/paternity leave.

All of these types of leave can be paid or unpaid, unless otherwise specified by a state or local regulation.

Eligibility for Leave

In determining employee eligibility for leave, an employer must consider many issues, including the following:

• Mandated leave regulations.
• The amount of paid leave time the organization can afford.
• The categories of leave.
• Determining when an employee is eligible to take leave.
• Whether employees will be offered the option to carry over unused leave from one year to the next. If carrying over unused leave is offered, how much leave may an employee carry over and what is the time limit on usage (when not mandated).
• Whether to provide leave or afford leave rights during an introductory period.
• The process in which scheduling annual leave is determined. For example, type of employees, tenure, first request granted, or otherwise.
• Whether seniority plays a role in scheduling leave and granting employees an increased amount of leave time after a specified number of years with the company.
• Supplying conflict management, when appropriate.
• Providing an employee leave prior to the employee accruing the leave hours requested.
• Creating a leave bank.
• Establishing the parameters of the leave period and stage of leave. For example, defining when extended/borrowed paid leave develops into unpaid leave and extended/borrowed unpaid leave becomes unemployment.

Types of Leave

Voting Leave

Employers typically want their employees to be active in the community they live in, and part of that activism involves voting in local, state, and federal elections. While there are no federal laws that require employers to give employees time off to vote, many states have laws that require private employers to give employees time off to vote, and in many of these states the employee must be paid for this time.

Jury Duty Leave

Per federal and state law, employers of all sizes must provide employees with jury duty leave.

Federal Law

Employees have the right to take leaves of absence to serve as jurors in federal courts, under the federal Jury Systems Improvement Act (28 U.S.C. § 1875). Under this act, employers are prohibited from discharging, threatening to discharge, intimidating, or coercing any employee based upon the employee’s jury service. Federal law also requires that any employee who takes jury duty leave be treated in the same way as all other employees who are on a leave of absence with respect to employment benefits and that the employee be restored to their same position upon return from jury duty.

Note: This applies only to service as a juror in federal court; it does not apply to service as a juror in state or local court.

State Law

State laws protect employees who serve on state and local juries. Although these state laws differ, most states prohibit an employer from discharging an employee who takes leave to serve on a jury. Additionally, some states prohibit other forms of reprisal or threats of reprisal. Some states treat violations as misdemeanors or as contempt of court, while others authorize the employee to bring a court action for reinstatement and damages. However, a few states specifically hold that employers are not required to pay for the lost time during jury duty or may offset from wages any money the employee received for jury duty.

Military Leave

All employers, regardless of size, must provide certain military leaves of absences to employees. The rules governing employees’ rights are set forth in both federal and state law.

Federal Law

The Unformed Services Employment and Re-Employment Rights Act (USERRA) is the federal law governing the rights related to the military service of employees. For more information on USERRA, review the topics under Discrimination and Harassment Compliance.

State Law

Most states have their own military leave laws. These laws generally provide the same leave and reinstatement rights and benefits guaranteed under USERRA to state National Guard and militia members called to active duty.

Holidays

Employers are not legally required to give employees time off for federal or state recognized holidays. In fact, if necessary, employers can require that their employees work on Christmas Day, Thanksgiving Day, or any other traditional holiday. However, many employers do have specified holidays when employees are not required to work. Employers should consider the following factors in determining whether to provide time off for holidays:

• Determining holiday pay. Generally, employees tend to work rather than take an unpaid holiday leave. However, employees may take unpaid leave if it is due to a religious holiday or the employer permits employees to use a paid vacation day (if such benefits are offered) in place of the unpaid holiday. Note, however, that being required to work on a day when almost all other businesses are closed is likely to cause some resentment on the part of employees and can lead to a dissatisfied workforce resulting in higher turnover rates and costs. Employers should remember that time off is considered a highly valuable commodity to most workers.
• Business market. Employers that conduct business with other companies that observe a holiday would be wise to grant employees the holiday off. If employees have to significantly interact with other businesses that will be closed, conducting work on a holiday would be counter-productive. Alternatively, if the business is one that might do well on a holiday, such as a retail store or a restaurant, the employer may want to maintain regular business hours and pay the employees who do work time-and-a-half or double time, as is often the custom on a holiday.
• Employer preference. Employers may want the day off to spend with family or pursue recreational activities. If the employer is going to be out of the office, it may be practical to close the business for the holiday. If this approach is used, the employer should be sure to both provide employees enough notice so employees may plan for their time off and be consistent in the holidays that the employer takes off as well. If employees are given a holiday off one year but not the next, then the inconsistency will lead to confusion for both employees and customers.

Vacations

Generally, employers are not legally required to offer paid vacation to employees; however, most full-time employees have an expectation of receiving vacation hours. Vacations may be a particularly delicate subject for small businesses due to the relative number of employees. For instance, if there are only two employees and one goes on vacation, half of the workforce is lost. Therefore, planning is critical when an employer decides to offer vacation hours.

Vacation Length

The amount of vacation provided to employees is determined by the employer. Most employers link the length of time that an individual has been an employee to the amount of vacation. For example, an employer might offer 10 days after one year of service and increase that number by one vacation day for every year of service after that (up to a certain limit), so that at milestones of service, such as five years and 10 years, employees would, in effect, be getting an additional week of vacation.

Type of Vacation Leave

Employers must decide whether employees may take vacation intermittently or sequentially. Requiring employees to take all their vacation at one time or in minimum increments, such as five days at a time, allows employers to better plan for the employee’s absence. The employer will know that the employee will be out for a certain amount of time and may be able to schedule the vacation for a time when business is less demanding. However, permitting employees to take a vacation day sporadically without minimum increment requirements allows employees to take vacation more spontaneously. Advantages to this arrangement are that employees may not take such long vacations, which may mean less interruption in business.

Sick Leave

Paid sick leave is required by law in some states and metropolitan areas, requiring every employer to verify geographical requirements pertaining to sick leave and mandated pay. Unpaid sick leave may also be legally required if an employer is subject to either federal or state family and medical leave laws; therefore every employer should verify requirements of their business location.

As with vacation leave, the amount of paid sick leave an employer offers is determined by the employer. Most businesses that offer a sick leave plan establish a set limit on the amount of time for which an employee can be compensated. The number of days may be any of the following:

• Dependent on the circumstances and at the employer’s discretion (although such discretion should be fairly and consistently applied to avoid allegations of unfair discrimination).
• A fixed, predetermined amount, such as 10 days each calendar year.
• Based upon the length of service of the employee.
• As required by any regulatory agency.

Additional points to consider in designing a sick leave policy are the following:

• How the sick leave program coordinates with the employer’s short-term disability policy, if there is one.
• The definition of “sickness.”
• Whether the policy extends to a child’s or spouse’s illness.
• Whom an employee should contact in the case of sickness.
• Whether employees can accrue and carry over unused sick days from one year to the next.

Federal Law

The Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA) govern an employer’s sick leave obligations under federal law.

State Law

In addition to the FMLA, many states have their own family and medical leave laws which offer the same or greater benefits than the FMLA. For instance, California mandates a paid family leave program. Workers who participate in the program are entitled to a maximum of six weeks of partial pay each year while taking time off from work to:

• Bond with a newborn baby, adopted child, or foster child (both parents).
• Care for a seriously ill parent, child, spouse, or registered domestic partner.

Most workers receive up to 55 percent of their weekly wages for up to six weeks per year, and workers are not required to take all six weeks at one time.

In addition, other states extend a similar program while many states also provide additional leave for things like blood or bone marrow donation.

Personal Leave

Personal time off may be offered to employees to cover situations that are not included in sick leave, bereavement, or other policies. Some examples of situations that might qualify for personal time off are house closings or transportation issues. Personal time is generally different from vacation or sick leave time in that:

• Usually only a few days are offered each year.
• The number of personal days offered is the same for each employee and does not increase with years of service.
• The personal time is given on a “use-it-or-lose-it” basis — employees cannot accrue or carry over personal time.

In larger corporations, personal time is usually treated as paid time off; however, employers may choose not to pay employees. Alternately, an employer may decide to treat personal time off as an excused absence.

Personal leaves granted on an ad-hoc basis to particularly valuable employees are more common, but if an employer chooses to give personal leave in this fashion, the employer must be careful to apply the criteria used to give personal leave equally, fairly, and consistently among all employees.

Paid Time Off Banks

To assist employees in balancing work/life conflicts while reducing unscheduled leave, employers are increasingly turning to paid time off (PTO) banks. In short, a PTO bank combines vacation, personal, and sick leaves into one comprehensive plan that allows the employee the flexibility to use leave for any reason. This eliminates the stress an employee may experience when, for instance, they feel obliged to take sick leave inappropriately to deal with a personal situation such as attending a parent-teacher conference. Plans such as this are also much easier to administer and require less work; however, the cost to the employer may increase depending upon how the plan is structured. For example, if the plan accrues or is granted, the employer may have different responsibilities to payout balances depending upon the state in which the employee works.

Funeral or Bereavement Leave

There are no laws requiring employers to provide employees with funeral or bereavement leave. However, the employers that do provide the leave typically allow between two and four days to attend a funeral or make funeral arrangements. Employers that do not provide funeral or bereavement leave generally allow employees to use some other form of paid leave, such as sick days or vacation, as an alternative. As a practical matter, when a death occurs in an employee’s immediate family it is unrealistic to expect the employee to work, and the employer may be reasonably perceived as hardhearted if some paid time off is not granted. Employers may establish in their bereavement policy the right to require verification of the need for leave under this category.

Pregnancy Leave

If an employer has 15 or more employees, the employer is subject to a federal law that protects pregnant women. The federal Pregnancy Discrimination Act (PDA), which is part of Title VII of the Civil Rights Act of 1964, provides that women affected by pregnancy, childbirth, or related medical conditions must be treated the same as other applicants and employees on the basis of their ability or inability to work. The law protects women against being terminated, refused employment, or being denied a promotion merely because they are pregnant. In addition, pregnant employees must be permitted to work as long as they are able to perform their jobs. If an employee has been absent from work as a result of a pregnancy-related condition and recovers, her employer may not require her to remain on leave until the baby’s birth. An employer also may not have a rule that prohibits an employee from returning to work for a predetermined length of time after childbirth.

Pregnant women are to be treated in the same manner as other persons with temporary disabilities for purposes of leave, as well as participation in benefit plans and health and disability insurance. Further, employers must hold open a job for a pregnancy-related absence the same length of time jobs are held open for employees on sick or disability leave.

Pregnancy Leave and Parental Leave

Pregnancy leave and parental leave are two separate and distinct periods of leave. Pregnancy leave is medical leave that is provided in connection with a pregnancy-related disability, either before or after the birth of a baby. Parental leave is leave to care for either adopted or natural-born children. Mistakenly, some employers consider parental leave to be the same as maternity leave and only offer parental leave to female employees. To remain compliant with federal and state antidiscrimination laws, employers should establish parental leave that allows both male and female employees the same leave benefits upon the birth of a child.

Note: Employers with 50 or more employees must allow up to 12 weeks of unpaid leave under the FMLA.

State Law

Most state family and medical leave laws provide for pregnancy and parental leave. Before finalizing a family leave and pregnancy leave policy, employers should determine whether such state laws apply to their workforce, and if so, abide by such regulations.