Beyond the Basics: Mastering Unpaid Time Off in the Modern Workplace

The concept of unpaid time off touches many areas of human resources. First and foremost, the practice of allowing unpaid time off is one that employers should strive to get right from a legal and compliance standpoint. But there are nuances to the practice too; employers should be aware of considerations rooted in the type of office culture they want to promote and the policies they’d like to maintain. 

In this post, we’ll cover the basics of what employers should know about unpaid time off. We’ll touch on legal obligations, compliance concerns, and how you can create and enforce a strategic unpaid time off policy that works for you and your employees. 

While every state has separate laws regarding the types and amounts of leave employers must allow, this article will focus generally on federal-level regulations, or laws that apply in all fifty states. 

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What Is Unpaid Time Off? 

Unpaid time off is an employee’s absence from work that is not covered by their salary, hourly wages, paid sick leave, paid vacation or personal leave, or any other method of compensation. Unpaid time off may either be allowed through statute or through an employer’s own time off policy. 

To clarify, when an employee is permitted to take unpaid time off (outside of their statutory rights), many employers choose to develop written time-off policies. While unpaid time off may be granted outside of the terms of a policy, writing down a basic set of guidelines helps employees and their managers understand what to expect. 

Unpaid Time Off and Employer Legal Obligations 

In some situations, employers must allow employees to take unpaid time off. These may include: 

• Unpaid time off under the FMLA 

The Family and Medical Leave Act (FMLA) is a federal regulation that applies in all fifty states. Under the FMLA, employers with fifty or more full-time employees working in a 75-mile radius must allow employees who have worked 1,250 hours during the 12 months prior to the start of leave unpaid time off of work in certain circumstances. 

Employees covered under the FMLA must be permitted to take up to 12 weeks of unpaid time off if they are unable to work due to a serious health condition; for the birth, adoption, or foster placement of a child; or if they need to care for an immediate family member who has a serious health condition of their own. During this period of unpaid time off, the employer must offer the employee job protection and must maintain the employee’s health benefits. 

While the FMLA only requires employers to allow unpaid leave, the law permits businesses to require employees to use any offered paid vacation, sick, or family leave during the FMLA-required leave period first. 

Keep in mind that the FMLA may extend to cover a wide range of issues, including mental health conditions, personal or family member victimization due to domestic violence, and organ donation. If you have any doubt about whether you should allow an employee to take unpaid time off, consult with an experienced HR compliance expert. 

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• Intermittent unpaid time off under the FMLA 

Above, we discussed situations in which employees must be permitted to take up to 12 weeks of unpaid time off under the FMLA. Did you know that the FMLA may also require businesses to allow workers to take unpaid time off in separate blocks of time? It’s true—the concept is called ‘intermittent’ FMLA leave. 

Intermittent FMLA leave may be taken for a single qualifying reason. Just like “regular” FMLA leave, the permitted allowance is up to 12 weeks, but in this case, it can be stretched over a 12-month period. FMLA leave may be permitted when an employee has an ongoing medical concern, is caring for an immediate family member with a chronic health issue or the birth, adoption or foster placement of a child. 

Just as you must during regular periods of unpaid time off under the FMLA, businesses must continue to offer job protection and the same job benefits during intermittent FMLA leave. However, if another role accommodates intermittent periods of time off better than an employee’s current position, a company may be permitted to transfer the employee to the more accommodating role—as long as the job’s location, pay, and benefits are equivalent or better to what the employee previously enjoyed. 

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• Unpaid time off under the ADA 

In some circumstances, employers may be required to consider offering unpaid time off under the Americans with Disabilities Act (ADA). According to the Equal Employment Opportunity Commission (EEOC), the allowance of certain periods of unpaid time off should be considered as a “reasonable accommodation” for an employee with a qualifying disability. 

This guidance has not been interpreted to mean that an employee must be offered unpaid time off for indefinite periods. Situations involving reasonable accommodations for workers with disabilities are very fact-specific and involve a careful balancing of the needs of the employee and the business. 

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• Other unpaid leave as required by statute 

The above is not a comprehensive list of situations in which employees must be permitted to take unpaid leave. Companies may also be required to permit unpaid time off for: 

• • Jury duty leave; 
  • Military leave, including active duty, reserve duty, or training; 
  • Military caregiver leave; 
  • Voting leave; 
  • Leave for qualifying religious practices and observances; 
  • And more, depending on the locations in which you operate or employ workers. 

Designing an Unpaid Time Off Policy 

As an employer, staying compliant with your legal obligations surrounding unpaid time off is of the utmost importance. However, it’s also important for your business to retain your workforce through comprehensive and human-focused time off policies. 

As you’re designing an unpaid time off policy that works for you, consider the following: 

• Will your policy be one size fits all? 

  Consider whether you’d like to allow the same amount of unpaid time off to different groups of employees, including full-time versus part-time employees, employees of differing tenure lengths, and so on. 

• Who will approve unpaid time off requests?

  Set up an approval process for managers and supervisors. Train managers on when to seek higher approval from leadership or an HR consultant. 

• How much unpaid time off will you allow? 

  Will you place a pre-determined cap on unpaid time off, or consider requests on a case-by-case basis? 

• Will you offer a blend of paid and unpaid time off?

  Check your state and local laws with an HR consultant beforehand so you know what you’re required to offer. 

• How far in advance should employees request unpaid time off?

  Will you require different notice periods for different lengths of requested time off (emergencies excepted)? 

Axcet HR Solutions: Your Employee Relations and HR Compliance Partner 

You’ve brushed up on the basics of unpaid time off, and you may be thinking of writing (or updating) your unpaid leave policy. If you need a hand putting together the perfect policy, or if you have questions when implementing and enforcing your rules, you have a place to turn with Axcet HR Solutions. 

Axcet is a full-service certified professional employer organization (PEO) that understands employee relations and HR compliance for small businesses. We’re happy to help you develop and implement an unpaid time off policy that works for you. Schedule a consultation to learn more.