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.