Beyond FMLA, Should Employers Have Unpaid Leave Policies?

July 18th, 2012 by

Generally under federal and some state laws employers with more than 50 employees must offer unpaid leave. The FMLA* for example entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave.  Employers must offer this type of leave, it’s the law.
Sometime employees in an effort to “be nice” or “offer additional benefits” create additional policies around unpaid leave. The question I have is why bother with an additional company specific policy if your company is a covered employer under the FMLA and/or state law? Smaller employers who are not required by law to have unpaid leave but are willing and able to offer unpaid leave may have an advantage when recruiting or retaining employees. However if an employer already has to provide FMLA leave what exactly is gained by having a policy on additional unpaid leave?  Having additional unpaid leave policies creates additional paperwork, and more opportunities for lawsuits for a low return. Unpaid leave of absence policies that are not required by law usually don’t guarantee job restoration or the continuation of benefits so again why bother to even have this type policy?

When developing policies and handbooks I typically recommend that a company not discuss additional unpaid leave of absences. If an employee needs to take time off beyond what is available through paid leave and  legally required unpaid leave then they can resign or be terminated.   If at a later date the former employee would like to return then the employer can rehire them. How simple is that!

*In addition to the Family Medical Leave Act there are other applicable federal and state laws related to required unpaid leave. Prior to developing and publishing any leave polices employers should consult with a qualified HR professional or legal counsel.


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2 Responses to “Beyond FMLA, Should Employers Have Unpaid Leave Policies?”

  1. Sue says:

    Does the employer have to provide and pay for the employees Health Insurance Benefits while on leave?

  2. A covered employer is required to maintain group health insurance coverage, including family coverage, for an employee on FMLA leave on the same terms as if the employee continued to work. Employees must still pay their share of health insurance premiums. For example, if the group health plan involves co-payments by the employer and the employee, an employee on unpaid FMLA leave must make arrangements to pay his or her normal portion of the insurance premiums to maintain insurance coverage, as must the employer. Such payments may be made under any arrangement voluntarily agreed to by the employer and employee.

    An employer’s obligation to maintain health benefits under FMLA stops if and when an employee informs the employer of an intent not to return to work at the end of the leave period, or if the employee fails to return to work when the FMLA leave entitlement is exhausted. The employer’s obligation also stops if the employee’s premium payment is more than 30 days late and the employer has given the employee written notice at least 15 days in advance advising that coverage will cease if payment is not received.

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