All countries have labor laws that entitle employees to many types of leaves for different reasons. For companies to comply with the law, it is necessary to understand the various rules governing paid and unpaid leave.
Employers must minimize the effects of a leave of absence while providing their employees with time away from work. With a fortress of laws protecting the workforce, employers must practice caution to guard against even more costly litigation should a dispute arise.
The impact that absence has on a small and medium-sized business is often overlooked or poorly managed. Unless the right tools are in place, small companies often do not have the time to track absence and, as a result, do not have any real insight into it.
According to Absenteeism: The Bottom-Line Killer, a publication of workforce solution company Circadian, unscheduled absenteeism costs roughly $3,600 per year for each hourly worker and $2,650 each year for salaried employees.
Taking time away from work is vital to handle personal issues and take care of physical health and emotional well-being. In addition to promoting a happier and healthier workforce, paid-leave benefits may enhance recruitment efforts and retention strategies. Nowadays, many progressive companies offer additional leave types as extra benefits to attract talents and retain employees.
Next, we will explore different types of leaves.
A leave of absence is when an employee has permission to take time off from work for an extended period. The time can either be paid, unpaid, mandatory, or voluntary.
An unpaid leave of absence typically occurs once the employee has run out of paid leave benefits such as sick days, accrued vacation days, and PTO (Paid Time Off). Depending on the unpaid leave policy, they may ensure the employees keep their jobs while away.
Officially, there are two types of leave: mandatory and voluntary.
State labor-related laws govern mandatory leave. Whether the law surrounding these leaves of absence apply to a business is often based on the number and location of employees working for that company.
Apart from the mandatory leave types, companies provide voluntary leaves as a courtesy to employees per company policy or collective bargaining agreement with a labor union. Companies do not have to offer job protection during a voluntary leave. Yet, if they want to decrease the turnover and attrition rates, they may choose to do so.
A leave policy helps you define the number of leaves your employees have, the types of leaves they are eligible for, and how to apply for leaves.
With a leave policy, you can assure your employees that you will provide them with the essential time off to take care of any issues they have.
Lack of proper leave policy can lead to:
A proper Leave Policy for employees in the workplace solves these issues.
When creating an employee handbook, it is vital to include the leave policy in the document.
A comprehensive Leave Policy is crucial so that the employees can understand the Dos and Don’ts while applying for leaves.
Also, the employees must not misuse the benefits of paid days and holidays given by the company. It helps maintain a balance between employee performance and satisfaction.
The following are the most common types of leaves offered by companies:
The Vacation (Annual) Leave is also called Earned Leave because the employee 'earns' it as compensation for the days worked in one year.
Vacation leave is paid time off from work for the employee to use for personal activities and create a healthy work-life balance.
Since work may get disrupted if a team member goes on extended leave, the employee should plan this leave and inform the team leader or manager about it in advance.
Providing earned leaves is mandatory as per labor laws, though the quantum of such leaves varies state by state. The leave entitlement is calculated based on the quantum of worked days (e.g., 20 workdays).
Tip: Learn more about the Vacation tracking solution from LeaveBoard.
Sick leave is paid time off from work that workers can use to stay home to address their health needs without losing pay. Sick leaves are crucial for employees to get the rest they need without worrying about work. Sick leave is a mandatory requirement in many countries to ensure the well-being of the employees.
Companies must provide 15 days of sick leave in a year to their employees. However, you must also be flexible with your sick leaves and allow employees to take longer ones if they have severe health issues.
However, it is essential to ask your employees to take the day off if they are sick, thus avoiding the trap of presenteeism.
Note: Discover how to manage sickness leave.
A public holiday, national holiday, or legal holiday is a holiday generally established by law and is usually a non-working day during the year. These are paid government-granted days. All public institutions and private companies follow them.
Tip: With LeaveBoard, you have access automatically to a database of public holidays from more than 50 countries, that you can import with two clicks when you implement the leave tracking system.
Most employers acknowledge the importance of religious observances and try their best to accommodate the needs of their employees. Ask employees to send a message to you every year, listing the religious holidays that they want time off for.
As an employer, you may find that accommodating such requests can increase the overall morale of employees.
If an employer cannot grant religious leave requests due to their business needs, the employer could explore other ways to accommodate their employees’ requests during these festivities. For example, providing flexible working arrangements.
From taking care of the newborn to recovering from the delivery, maternity leave is a valuable time for new mothers. Ensure you accommodate this type of leave in your policy to help employees not worry about their job while busy with their newborns.
The maternity leave duration depends on the labor laws in the country where the company headquarters are.
You should also be open to providing extra leave days in case of any postnatal complications.
Paternity leave is granted to new fathers - husbands or partners of a pregnant woman, surrogate parent, or someone who adopted a child- to take care of their newborns without any worry.
Unlike maternity leaves, new fathers usually get two weeks of leave to take care of their partner and child, post-delivery. Some countries mandate 1 to 2 weeks of paternity leave for new fathers.
Companies rarely provide paternity leave for the birth of their child since such leaves are not mandatory by law. However, HR must recognize the stresses of adjusting to the newborn and taking care of the child in their first few days.
Losing a loved one is an unavoidable situation. In such events, employees take sudden leave.
HR needs to have a bereavement leave policy that provides the employee with the time to grieve their loss, manage any responsibilities they may have due to the death, and allow them to ask for a bereavement leave without any hassle.
Most HR grant their employees 3 to 7 days of bereavement leave, depending on the closeness of the relative.
Employees who have clocked in more hours than required can be eligible for compensatory days off. Ensure that any employee who has put more time in or comes to work on days they were off (like Saturday) receives a compensatory day off or “comp off”.
Use a time clock to record the additional worked hours. You must inform your employees that they have an extra day of leave for the time they put in.
Simply put, sabbatical leaves are “a break from work” where employees can pursue interests they have or take time off for physical and mental health reasons. Unlike other leaves, sabbaticals are long leave periods, from six months to a year.
Companies whose employees have served them for more than three years often give these employees a sabbatical leave to reward them for their loyalty and hard work.
If your employee has exceeded the number of leaves they were eligible for, they can still take a leave with a pay cut.
Any leaves taken in the year outside of the paid leaves will result in a pay cut for the employee. Communicate the number of leaves the employee has and let them know how much pay is cut per leave day they take outside their eligible leaves.
Note: Companies with an unlimited leave policy do not have to define unpaid leaves. However, you should be able to track and ensure employees are not taking advantage of your policy.
Tracking every leave is a time-consuming task. With LeaveBoard, employees can request leaves confidently, and managers get instant emails with the request for approval. Once approved, every leave is automatically recorded within the dashboard so that you can monitor the leaves taken and track whether an employee is taking more leaves than they are eligible.
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