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Dear David: What are the rules around unpaid leave?

If an employee runs out of paid time off, can we allow them to take unpaid leave?

In most cases, yes. In general, you can offer the option of unpaid leave when an employee has used all their paid leave time. A few things to keep in mind:

  • In some situations, such as under the Family and Medical Leave Act, the employee may be legally entitled to unpaid leave. In those cases, you would need to approve the unpaid leave (at least) to the extent required by law.
  • For employees enrolled in your company benefit offerings, the length of the unpaid leave may impact their ability to continue to participate in benefits if the time away isn’t covered by the FMLA or a similar law. Check your internal policies and benefit plan documents for details on eligibility.
  • Be consistent in granting time-off requests. If in the absence of legal requirements, you have historically given employees unpaid time off for personal reasons or family emergencies, you should continue to do so unless you want to make a permanent policy change inconsistency can lead to discrimination claims.

It also wouldn’t hurt to double-check that the employee isn’t owed any paid leave beyond what they’ve already taken. Review state and local leave laws where the employee works for any requirements.

Source: Mineral

David Katz

Vice President
VMA Insurance Services
To send your questions, write to david@vma.bz

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