While leave management is not a new concept, it took a global pandemic for many organizations to understand the importance of an efficient leave management process.
During COVID, HR professionals struggled to keep up with constantly changing federal entitlements and state leave laws, an overload of employee leave requests, and workforce staffing requirements to ensure business continuity.
On the other hand, the move to remote work highlighted the importance of work/life balance driving the need for generous time off and paid family leave programs.
Post-COVID, this sentiment has only continued to grow amongst employees and jobseekers, as time off and paid leave have become key in employee job satisfaction.
My aim with this article is to help you develop an efficient and effective leave management strategy that keeps you on the right side of compliance.
What Is Leave Management?
Leave management refers to an organization's way of managing absence requests through the use of policies and procedures. This is also widely known as time off management or absence management.
Leave management is a tricky balancing act even for the most experienced HR professionals.
As a leave manager, you are tasked with juggling the following responsibilities:
- Time off tracking
- Legal compliance
- Policy creation and enforcement
- Workforce management
- Reporting and analytics
- Employee education and support
Before you start putting a leave management program together you must first become acquainted with your company's time off and leave offerings.
While the terms “leave” and “time off” are used interchangeably, it's important to note the difference between a leave of absence and time off.
Time off policies provide employees with access to time away from work for everyday circumstances, while leave of absence policies grant employees time away for extended periods to deal with extenuating life circumstances.
Time off and leave of absence are categorized by two types, Mandatory and Voluntary.
Mandatory time off and leave of absence programs are regulated by federal, state, and local laws and provide employees with job-protected time away from work.
It’s the employer’s responsibility to communicate any time off or leave entitlements to employees while making sure they have access when eligible to the protected time.
The Family Medical Leave Act (FMLA), provides eligible or covered employers with unpaid job-protected leave for qualifying family and medical reasons as well as reasons related to Military service.
FMLA requires continuation of the employee’s group health benefits under the same conditions as if they had not taken leave.
FMLA leave may be unpaid or used at the same time as employer-provided paid leave. Employees must be restored to the same or virtually identical position when they return to work after FMLA leave.
Covered Employers under FMLA include:
- Private-sector employers who employ 50 or more employees
- Public agencies
- Local educational agencies
Many states, seeing that the Federal FMLA entitlement only provided unpaid long-term time off, brought forth their own state-mandated sick laws to bridge the gap.
States with Mandatory paid sick leave laws are:
- New Jersey
- New Mexico
- New York
- Rhode Island
- Washington, D.C.
Maine and Nevada have laws requiring accrued paid time off not limited to sick time.
Voluntary time off and leave of absence programs are considered employee perks. These policies are created at the employer’s discretion.
Some popular examples include:
- Vacation/Personal Time Off
- Sick Time Off
- Public Holidays
- Volunteer Time Off (VTO)
- Bereavement Leave
- Parental Leave
Oftentimes, mandatory and voluntary leave policies will coincide. Employers can create voluntary leaves that work to expand mandatory leave entitlements for their employee population as long as they don’t lessen any leave entitlements provided by other mandatory leaves.
Benefits Of Effective Leave Management
Leave management impacts all aspects of business as well as employee well-being. When done right it can ensure employee satisfaction, boost company performance, and drive positive client experience.
Lowers Burnout and Increases Productivity
Burnout and productivity go hand in hand. If employees are emotionally and/or physically exhausted their ability to focus will be hindered. This leads to an increase in errors and slower turnaround times.
Time off and leave are essential for employees to rest and recharge. By taking some time away from work, people can prioritize self-care and come refreshed and ready to take on the day.
It’s why many employers are choosing to switch to 4-day workweeks.
Key employee retention and talent recruiting tool
Efficient leave management can cultivate a culture of work/life balance, giving employees access to much-needed time off work to care for themselves and their families.
A healthy work/life balance is critical to retaining and attracting top talent. According to The Muse’s 2023 user survey, 75% of employees are planning to look for a new job within the next 12 months, with 70% stating that work/life balance is a high ranking component when accepting an offer of employment.
Lower Healthcare expenses
Workers with access to time off and leave can prioritize preventative care. Preventative care ensures medical conditions are caught and managed promptly resulting in lower health care claims for both employees and employers.
Leave Management Challenges
While leave management can be quite challenging, don’t be disheartened. Taking time to understand the pain points of leave management can ensure you are ready to face and troubleshoot any issues that may arise.
Tracking Time Off and Leave
Improperly tracked time off and leave date can cause a ripple effect on different functions of leave management. Inaccurate data leads to payroll errors, inequity, lack of business coverage, and can increase compliance risk.
The purpose of a leave management program is to facilitate employee access to time away from work while also ensuring the workforce remains properly staffed at all times.
Juggling multiple absence requests, especially within a team or department, can be complex and happens quite often. If all requests are approved without review it can ensure a team is working under capacity resulting in performance impacts.
Payroll is complex and, when you add leave and time off to the mix, it can be a recipe for chaos.
Most companies offer a combination of paid, unpaid, and partially paid time off and leave options.
If not accounted for correctly, this can lead to mistakes when calculating employee pay. It is also quite common for employees to modify absence requests after submitting, if the correction is made after payroll is processed payroll payments made are not accurate.
Both scenarios require retroactive payroll corrections. Payroll corrections are often a manual process and can be very time-consuming.
Compliance is an essential function of leave management. HR professionals are tasked with keeping track of ever-changing regulatory leave requirements that vary at the federal, state, and local levels to ensure ongoing compliance.
Failure to comply with regulatory leave requirements may constitute a violation of the law and may result in fines in addition to civil penalties and relief for other potential violations.
A useful article providing guidance here: HR Compliance Guide
Leave Management Best Practices
Establish transparent leave policies
Building transparency in your policy can be done through the use of clear and actionable information.
We can all agree that most HR policies are a dry read, but they don’t need to be so complicated.
Drafting policies is very similar to building a puzzle. To help you get started I have compiled all the puzzle pieces you need to build a complete leave policy.
- Absence Type—self-explanatory, defines the absence covered in the policy, i.e. bereavement leave, parental leave, etc.
- Eligibility Criteria—establishes minimum requirements to be met by employees to be allowed to request this absence type.
- Qualifying Reasons—establishes covered reasons employees may use the absence type.
- Requests process—outlines what actions employees need to take to request time away from work.
- Notice Requirement—establishes the minimum amount of notice the employer needs to ensure business coverage.
- Pay and Benefits—establishes if employees are eligible for payment under the absence type and how payroll will be processed as well as benefits continuation information and deduction processing.
- Job protection—establishes if the absence type is protected time under federal/state/local law and defines protections as well as a process of reinstatement upon an employee's return from leave.
- Return to Work—outlines what actions employees need to take prior to the scheduled return to work. Oftentimes this is providing a fitness for duty form.
As you’re drafting your leave policy, it's crucial you ensure your employee leave management policy aligns with any federal, state, or local laws establishing leave requirements.
While employers must adhere to minimum leave entitlements, they certainly can go above and beyond them at their discretion.
Communicate, Communicate, Communicate
Leave policies are often not top of mind for employees until the need for time off arises. It certainly can be easy for employees to overlook policy guidelines if not communicated efficiently.
Some steps you should take to efficiently communicate a new leave policy to your population include:
- Sending an initial company widespread email that highlights the following:
- The effective date of the policy
- The objective of the policy
- A link to the policy documents and additional resources for further review
- Any action required on behalf of your population
- And any applicable information/education session dates
- Host an education session to present the policy and answer employee questions
- Host 1 on 1 office hours in case employees want to meet confidentially to discuss their questions/concerns
- Ensure policies and resources are posted in a centralized location such as the company intranet and highly office-populated areas such as a break room
Communication doesn’t stop with new policies, ongoing communication is key to ensuring employees stay compliant with policy guidelines.
While a widespread company email may not be needed, yearly electronic employee handbook acknowledgments or annual education sessions can serve as a great reminder on the policies and procedures in place that guide the employee absence requests process.
An effective communication strategy will ensure that employees follow due process as outlined in the company policies while ensuring they are aware of the time off and leave programs available.
Monitor regulatory leave requirements
Ongoing monitoring of regulatory leave requirements is essential to ensuring compliance with federal, state, and local laws.
While it is not customary for federal mandates to change often (unless in the event of a global emergency), state and local laws can vary and require more attention and should be reviewed to ensure policies are updated as needed.
Some good resources you can always rely on are:
- The official U.S. Department of Labor website
- Official state and municipal websites
When a new law comes into effect, or a current law is revised, an official communication will be posted on these platforms and resources for companies and workers will be made available to ensure covered employers take action in accordance with applicable requirements and workers are notified of any rights under these new laws.
Also important to note, most leave management software vendors offer regulatory compliance monitoring to ensure your policies stay in compliance with the law while also saving your team time scouring the internet for updates.
Leave management software allows organizations to oversee and manage all leave management functions in a centralized platform.
Through the use of this technology, the need for manual processes becomes obsolete, which in turn reduces human error while also saving your team time managing absence requests.
Leave management systems help HR professionals to more easily:
- Configure company absence types into the system that aligns with mandated regulations and company policy
- Track and process absence requests
- Calculate leave balances
- Set up important notifications and reminders
- Integrate state disability benefits
- Manage payroll adjustments
- Securely store important documents
- Run reporting.
Additionally, employees will have access to a user-friendly one-stop shop where they can easily request a need for absence within minutes, get real-time updates as their requests are being processed, easily upload documents, and utilize interactive tools to learn more about available leave programs and review the linked company policies.
By leveraging leave management technology organizations can streamline the leave management process and ultimately optimize the employee experience.
Train Managers and Educate Employees
Employees will often notify their manager of a need for leave or time off requests before reaching out to the HR business partner.
Since managers play a vital role as the first line of support for employees, they must be versed on basic mandated leave entitlements and the leave policies in place to guide employees.
This will mitigate misinformation and ultimately lessen compliance risks for the organization while ensuring employees feel supported by the business.
While time off is certainly more self-explanatory, leaves can be a more nuanced topic to digest.
Employees with a need for leave are already navigating extenuating life circumstances. Proper leave education can ensure employees understand their rights and responsibilities under applicable leave laws and absence eligibility to make informed decisions while also ensuring they follow due process aligning with company policy.
And That’s It!
Leave management can be complex for HR professionals and employees alike.
I hope this article has helped prepare you with the right processes and tools to be able to design an effective leave management strategy and educate employees.
For any further help or guidance, find me in the People Managing People Community, a supportive community of HR and business leaders passionate about sharing knowledge to build better organizations and help you advance in your career.