4 Factors in Crafting Your Company's Leave Policy Writing a good leave policy takes a good balance between following the law and respecting the needs of your employees.

By Gwen Moran

Opinions expressed by Entrepreneur contributors are their own.


Whether it's a few days to get over the flu or several months to see to a newborn or sick family member, the issue of how much paid and unpaid leave to give employees can be tricky for businesses to address. You need to consider industry norms and what you need to offer to attract and retain talent, as well as all applicable federal, state and local laws, which can be a complicated patchwork of human resources compliance, says Melissa Burdorf of XpertHR, an online human resources platform based in New Providence, N.J.

To get it right, there are a number of factors you need to consider:

Applicable laws. When developing a leave policy, you need to comply with the law that gives the greatest benefit to the employee, Burdorf says. For example, while there is no federal law requiring small businesses provide sick leave, on March 20, 2014, New York City Mayor Bill de Blasio signed a law requiring city businesses with as few as five employees to give qualifying employees up to 40 hours of paid sick leave. The federal Family Medical Leave Act (FMLA) requires that businesses with more than 50 full-time employees give their qualifying employees up to 12 weeks of unpaid, job-protected leave time for specified family and medical reasons. In some cases, it's possible to apply FMLA leave concurrently with other leave time. Be sure you understand the requirements of the laws that apply to your business.

Related: When It's Appropriate to Micromanage

Qualifying employees. Once you know the legal requirements you need to meet, you need to determine whether or not your leave policy will apply to all employees. For example, will part-time, temporary or seasonal employees have the same leave rights as full-time employees? If that's not required by law, you need to weigh the benefit of extending the leave policy to them against the administrative and financial burdens of offering and monitoring these leaves, Burdorf says.

Policy requirements. An employer should have a written policy controlling all leaves, summarizing the terms of the specific leave policy, as well as the process by which an employee should request leave. Your policy should include how much notice is required and how requests should be submitted, as well as criteria for requesting leave. It should also address an employees' obligation to use various types of paid leave at the same time and what forms of documentation, if any, employees must provide before going on leave or when returning from leave. For example, for jury duty an employer may request the jury summons or certificate of attendance at the trial, while extended sick leave may require a doctor's note or a medical certification. You should also spell out who's eligible for leave, how leave accrues, and how it's carried over.

Related: First Time Manager? Start Here.

Sometimes, employees want to use paid time off (PTO) before tapping into their FMLA leave. However, employers may want to "designate the leave as FMLA leave to start the clock running on that 12-week FMLA allotment," Burdorf says. To do so, assuming the leave qualifies as FMLA leave time, you need to notify the employee that you're designating the leave as FMLA leave time upfront, since designating the time retroactively can be problem if it would result in harm to the employee. You may also wish to include a statement in your leave policy informing employees abusing policies or repeatedly failing to give notice when able to do so may be grounds for discipline, including termination.

Industry norms. Different sectors have different expectations around leave, ranging from little to none to paid sabbaticals after a certain number of years of service. To remain competitive, you need to have a good understanding of those options and whether they're feasible for your company, Burdorf says.

"An employer should also ensure that supervisors and managers are clearly advised on the employer's anti-retaliation provision, which should be included an each policy -- not retaliating against an employee for requesting or taking leave," Burdorf says.

Related: 4 Ways to Talk to Employees So They Listen

Wavy Line
Gwen Moran

Writer and Author, Specializing in Business and Finance

GWEN MORAN is a freelance writer and co-author of The Complete Idiot's Guide to Business Plans (Alpha, 2010).

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