The old concept of two weeks with pay has given way to a wide variety of paid and unpaid leave plans for all businesses. Among the typical options are:
- Annual leave
- Holidays (national and state)
- Sick leave
- Personal leave (birthday, other reason of choice)
- Emergency leave
- Compassionate leave (funeral, family illness)
- Religious observance
- Community service (voting, jury duty, court witness, National Guard, Civil Air Patrol, volunteer fire department)
- Education/training
- Leave without pay
- Leave of absence (paid or unpaid)
- Parental (formerly maternity) leave.
In a strict sense, paying people for not working is a costly, unprofitable concept. However, time off from the grind is a tradition of the American workplace, and rightly so. Benefits can far outweigh costs. Among the many benefits for the employee are rest, relaxation, a new perspective, travel, pursuit of hobbies and release from daily tensions. The employer also benefits -- the employee returns refreshed from the break in daily routine, possibly with new ideas and renewed energy for doing a better job. Employers also can observe the performance of employees in new situations, as they fill in for their vacationing coworkers, potentially leading to better allocation of work force talents.
Eligibility for Leave
In determining employee eligibility for leave, an employer must find answers to many questions,
including the following:
- How much paid leave time can the company afford per year?
- How many categories of leave should there be?
- Can employees carry over unused leave from one year to the next? If so, how much?
- Are there leave rights during probation?
- Who gets first choice of dates in scheduling annual leave? How are conflicts resolved? By seniority?
- Can employees borrow leave in advance?
- At what point does extended/borrowed paid leave become unpaid leave and extended/borrowed unpaid leave become unemployment?
- Are employees eligible for more leave after a certain number of years with the company?
Employers must determine when eligibility for leave begins: immediately? after the first year? Many employers establish a paid annual leave schedule by declaring employees eligible for so many hours leave after they have worked a specified number of hours; for example, two hours leave for every 80 hours worked or one day for so many weeks worked.
Limits on sick and other leave are vital. You should restrict sick leave to illness or medical examinations and treatment. It must not become an extension of annual leave. Accordingly, it is wise to reserve the right to require physician certification of an illness.
Although the vast majority of employees will not abuse time allowed for compassionate, emergency or other leave categories, clear policies should be established on requesting such leave and on its duration.
Budget Considerations
Granting paid or unpaid leave is a costly benefit. Depending on the nature of an
employee's work, you may need to require overtime from other employees or hire temporary
employees to cover the absence. Extended leave situations pose special problems.
Questions To Ask Before Finalizing a Leave Plan:
- Is the business open on all holidays? If not, on which ones?
- If the business is open on holidays, do you work with full or limited staff, paying them double time as may be required by law?
- How many hours/days are allowed as leave for voting, jury duty, religious observance, funerals, etc?
- How are insured benefits handled during unpaid leave?
- Which state laws affect leave?
