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Paid Vs Unpaid Leave

Paid Vs Unpaid Leave

HR 4 Health

Paid Vs Unpaid Leave

By Dominic Kelley

UPDATED 9/27/20 5:09pm PT:

As an office manager, the process of figuring out how to pay your employees for time off can seem a little complex. What is required when it comes to vacation time, sick leave, and other forms of paid leave? Are there any iffy sorts of gray areas when it comes to long-term employee absences like pregnancy or sick leave? What kinds of reasonable accommodations should your office be expected to make in these sorts of scenarios?

Luckily, we've broken down everything for you: What is legally required, what is your choice, and what's in between. Ultimately, this unofficial guide to paid vs. unpaid leave will answer all your most pressing questions and help you easily make the right policies for your practice.

Paid Leave: What is Actually Required?

In your practice, there are probably certain kinds of leaves that are pre-determined as paid. From vacation to sick leave to paid holidays and other forms of leave, there are always certain requirements that always come with paid leave. To figure out paid leave, you must first understand what is required.

Vacation Time

Most people are familiar with paid leave in the form of paid time off, or PTO. To earn PTO, employees accumulate days off over their time at work that they can then use for vacations. While there is no federal mandate regarding paid vacation leave (or even unpaid vacation leave), it is a popular benefit that the vast majority of employers choose to offer. The amount of paid vacation time typically builds up for employees based on the amount of time they've been working for their practice as well as the level they hold within the office. Simply put, to earn vacation time, eligible employees just have to show up to work!

Sick Leave

Believe it or not, there aren't any federal laws that require employers to pay their employees' sick leave. However, many states, cities, and municipalities have mandates that require local employers to provide paid sick days. Of course, this leads us to one of the biggest questions surrounding mandatory paid sick leave: doctor's notes.

In short, an office manager is not allowed to request a doctor's note for any days that fall under the employee's mandatory paid sick leave. This is a protected leave and has to be given with no questions asked, in most scenarios. Requiring a doctor's note would infringe on that mandatory paid sick leave, and the mandatory paid sick leave law — like all laws — is not at the discretion of the employer. It's a mandate the employer must follow.

However, once an employee's mandatory paid sick leave is exhausted, an office manager does have the flexibility to deny or approve additional absences or ask for doctor's notes to approve the absence. Keep in mind that, even with a doctor's note, you may never follow up with the physician. This would infringe on your employee's HIPAA rights. The note can only say the name of the doctor and the date/time that your employee was seen. Additionally, if you are going to request a doctor's note for an employee's absence, you need to ensure that you have a policy in place (such as requesting a note after the third unpaid sick day) that is applied equally to all the employees in the practice.

For any further questions, be sure to schedule a consultation with HR for Health to ensure you know the laws regarding doctor's notes and mandatory paid sick leave.

Other Paid Leave

In addition to vacation time and sick leave, your practice is legally required to make leave accommodations for jury duty, voting, certain holidays, and any military responsibilities. Although whether or not these are required to be paid typically depends on a specific employee's status (exempt vs. non-exempt). In addition, some employers choose to offer paid bereavement leave in the case of the death of an employee's immediate family member.

Gray Areas for Employee Leave of Absences

As you probably know, certain parts of employee leave aren't so cut and dry. In fact, some of these gray areas are just plain confusing. Still, these areas carry requirements of their own, just like the forms of paid leave explored above. These requirements serve to help you better understand how these leaves of absence factor into the debate of paid vs. unpaid leave.

Family Medical Leave Act (FMLA)

The Family Medical Leave Act is a federally-mandated program that allows employees to take a leave of absence for personal medical issues, family medical issues, or for military reasons. While this mandate allows for employees to take up to 12 weeks of unpaid leave and still be able to return to work, there are still some stipulations.

First, employees only qualify if they have worked at your practice for at least a year and have worked at least 1,250 hours within the year prior to their requested leave. Second, this time off is not required to be paid unless employees have existing PTO outside of the FMLA time. However, once the employee's PTO is all used up, you are not obligated or required to pay any for additional time under the FMLA's requirements. Lastly, employees are only eligible for FMLA leave if the employer has 50 or more employees within a 75-mile area.

Maternity and Paternity Leave

While parental leave may technically fall under FMLA in some cases, some practices still choose to offer paid (or unpaid) time off specifically for new parents as an additional benefit. (This can be an attractive option for your new and existing employees, if you choose to offer it). Also, it's important to note that if your practice is in California, Rhode Island, or New Jersey, you may be legally mandated to provide parental leave, depending on the size of your team. Consider contacting HR for Health to learn more about your responsibilities if you are in these states.

Pregnancy Disability Leave

On top of mandatory maternity and paternity leave in states such as California, certain states ask employers with a certain number of employees to offer disability leave to pregnant employees who cannot carry out their current job duties. Although this leave is not required to be paid, it is yet another gray area where office managers are free to choose how they want to set up their specific policies to best suit the needs of their practice.

Unpaid Leave: What Are Reasonable Accommodations?

In the world of HR, one phrase strikes fear into the hearts of employers everywhere: reasonable accommodations. This phrase (and the surrounding rumors and misunderstandings of the law it comes from) conjures up images of expensive changes and potential lawsuits, but the reality is that these accommodations are often very simple, very logical tools. One tool which should — and often must — be considered as a reasonable accommodation for employees is unpaid leave.

Under the Americans With Disabilities Act (ADA), most periods of temporary leave should be considered reasonable accommodations if the employee requests them. Many legal cases in which employers were held liable for ADA violations involved their refusal to grant unpaid leave. However, an open-ended period of unpaid leave is not required to be granted under the ADA. If neither your employee nor their medical provider can provide a date upon which the employee can return to the office and perform the essential tasks the practice needs them to perform, then granting such an indefinite and uncertain period of unpaid leave may not be required.

Ultimately, the best approach to addressing unpaid leave is to communicate with the employee about their needs in the workplace based on their doctor's recommendations. This is especially true in cases of mental health issues such as PTSD, anxiety, or depression, where short periods of unpaid leave can significantly improve the overall mental and physical health of your employee and allow them to continue to work as well as they're expected to.

As always, consult your attorney for assistance and educate yourself about ADA requirements to prevent unintended violations. Or, contact HR for Health today and schedule a consultation.


Learn more about managing leaves of absence with the experts at HR for Health. Contact us by phone at 877-779-4747 or by emailing compliance@hrforhealth.com today.


HR for Health is one of the nation's leading Human Resources Management Systems (HRMS) used by small to mid-sized practices.


Quick note: This is not to be taken as legal or HR advice. Since employment laws change over time and can vary by location and industry, consult a lawyer or HR expert for specific guidance. Learn about HR for Health's HR services