*This post has been updated as of 11/09/2022.
If you work in human resources or are a manager of a department or team, you likely encounter a regular number of questions on at least one of six things: 1) compensation 2) work schedule and hours 3) employee benefits 4) vacation/time off 5) advancement opportunities and 6) work culture or environment. I always like to guess which question of these six will be asked first when I’m interacting with new hires. I find that it’s almost certainly number 4 – the subject of vacation and time off.
Most Commonly Asked Question at Work Is About Time Off, Paid and Unpaid
People love their time off work – at least in theory. It’s certainly an important question of new hires, job candidates or employees; whether paid or unpaid is a common one especially if your organization has some crazy time off calculation or policy on allowing employees to borrow hours before they’ve been earned. Unfortunately, U.S. employees typically leave about 429 million paid vacation days on the table every year.
Employment Laws, Policies and Time Off Calculations Are Confusing
There are only a few things I enjoyed less in HR than sitting down with employees who had questions about their paid time off calculation and why they were in the negative by several hundred hours. They are complicated, confusing and remind me a lot of my MBA advanced finance class.
I had one employee who hadn’t been able to take a paid vacation in over three years because she hadn’t worked enough hours in the previous three years due to being on an extended medical and FMLA leave. So she just kept taking unpaid time off until she had her 2,040 hours for the year and qualified for FMLA. We finally compromised with the corporate benefits department and crafted a way, over a period of 10 months, for her to pay back the already used unearned vacation so that she could start earning vacation again normally.
I don’t think we can communicate about the types of time off for employees enough, whether paid or unpaid. Time off is one of the most popular topics on the blog as it’s related to time off for exempt or non-exempt workers. Blog readers have all kinds of questions from questions about exempt level workers using partial vacation days, vacation earnings calculations to when employees become eligible and protected under FMLA. Judging by the traffic of our series of articles on time off, it’s likely members of your staff have Googled for time off guidance at some point while working for your company.
States That Require Employers to Provide Paid Leave
A growing number of states in the United States and cities, I might add require employers to offer paid time off. The requirements for each state are different, however, I see more of this trend continuing with states like California, Connecticut, and New York leading the way. Currently, 11 states and Washington, D.C. as well as over 30 localities require paid sick leave.
Types of Paid Time Off
– Vacation (Includes unlimited vacation and regulated vacation). Depending on how your vacation is calculated, employees can either earn that vacation after one year and immediately use it after it has been earned. Vacation earning was my most popular employee question. Our HR staff went so far as to develop individual Excel spreadsheets that allowed employees to forecast their vacation hours for use in the future.
– Parental Leave (Maternity and Parental Leave). Paid leave for new parents for an extended period of time that is specific to the organization. Many organizations are now offering paid parental leave like Netflix and Amazon. There are now a number of states and cities that also require employers to offer paid parental leave. I expect the number of laws providing protection to grow over the next 10 years significantly. See the graphic above.
– Sick Leave. Time off exclusively for when you or a family member you care for are sick and unable to work. Employees typically accumulate this time by pay period or month.
– Paid Time Off (PTO). Companies often use PTO which combines sick leave and vacation time in one.
– Bereavement Leave (funeral leave). Leave for grieving and taking care of personal matters after a close family member passes away.
– Leave of Absence (Paid). Depending on what your company’s policy is, some organization’s allow for paid leave of absence and time off work for situations that don’t qualify for disability insurance or are in lieu of. I once worked for a company that provided a paid leave of absence policy of up to 12 weeks before employees were required to take time off according to FMLA.
– Military Leave (Paid). Employees are entitled to paid military leave if, while on leave of absence, their military compensation is less than the employee’s pay with your organization under an employment law called USERRA. Please note that USERRA (The Uniformed Services Employment and Reemployment Rights Act) does not have an employee threshold. All employers are obligated to comply.
– Holiday Pay. Holiday pay using happens during normal holidays including Christmas, Thanksgiving, New Year’s and so on. Employees should check their company’s policy on what holidays are included and if there are policies for full time versus part time workers in relation to holiday pay. Having worked in retail for many years, these were some of the most common questions I encountered.
– Sabbatical. Traditionally offered in the education sector, sabbaticals are increasingly common in the private sector. Employers allow employees paid time off to explore their passions, interests, education or to do research. The length of a sabbatical and its availability is up to your employer.
Types of Unpaid Time Off
– Leave of Absence (Unpaid). Time off that is unpaid when an employee has used all of their paid time off and vacation. Employers who offer unpaid LOA and are not required to follow the FMLA and will adhere to different rules and requirements.
– Parental Leave. (Unpaid). Unless you live in California, New Jersey or Rhode Island, or your company offers paid parental leave, you will be taking unpaid time off as a new parent. Pro tip: new birth mothers can qualify for disability insurance and receive a percentage of your pay while out on leave so check to see the benefits you’ve signed up for before talking with your boss or HR at the company.
– Military Leave (Unpaid). Employees who are National Guard and become active duty military are allowed to maintain their employment while they are active duty military for an extended time, regardless of the size of employer. Employers should educate themselves on USERRA as outlined above.
– Unpaid Personal Time Off. In the form of reduced hours of taking an unpaid day. This could be for intermittent FMLA, personal, sick or vacation time off. The employee will not be compensated for this unpaid time.
– Medical Leave (FMLA). If an employer qualifies for FMLA, employees can take up to 12 weeks of unpaid time off work to care for themselves, a family member as well as caring for military. Employees must have been employed for 12 months and have worked 2,040 for that 12 month period. There are some additional specifications which you can read about in your company handbook or by clicking here. If you are eligible to extend your leave beyond the 12 weeks of FMLA, is dictated by the policies outlined by your employer.
– Medical Leave (Non FMLA). Medical leave for an employee who doesn’t either qualify for FMLA or if an employer isn’t required to offer FMLA. You should visit your company handbook to understand how much medical leave you are entitled and also click here for specifics on the Family Medical Leave Act.
– Furlough. These are employer alternatives to layoffs where you are not working but have access to employer benefits. In the past these have been common with government employees, but in 2020 have become more common as a layoff alternative during the COVID-19 pandemic.
Why Is Paid Time Off So Elusive?
Most employers offer time off. That’s standard across the board. What’s not so standards is the subject of paid time off. Many employers still do not offer paid options mostly in part due to two areas: full time vs. part time employment and size of company. A 2020, report from Pew Research found that paid time off is a perk and benefit that predominantly large employers over 500 offer with 91 percent of employers with 500 or more employees offering some form of paid time off as a benefit to their employees. A 2021 report by Development Academy found that feeling appreciated is the number 2 reason employees give for being happy at work so perhaps this is something smaller companies should be thinking about more as well.