Leave vs. Pay: What You Need To Know
I have lost count as to how often this question comes up. Or, how often I have to point out that there’s a gigantic difference between an employee on an approved, job-protected leave of absence, and someone out on an unapproved leave just collecting short term disability or long term disability pay.
You REALLY want to avoid the latter of those two unless you plan to set a horrible precedent across your company, and unintentionally open yourself up to lawsuits.
So? What’s the difference?
To be clear: a leave of absence is the actual, approved leave that’s either federally job-protected (think: FMLA), job-protected at the state level, or a discretionary leave by your company. This is usually given to employees in the form of an approval letter, notifying them of the laws covering their leave of absence, as well as dates of approval and when the employee can be expected back to work.
Short term disability and long term disability are examples of wage replacement that occur during a leave. These on their own are not a leave of absence at all. So when employers reach out to me telling me “my employee is out on long term disability and we don’t know how long they’ll be out…what do I do??” My first question to them is always “well, when did their leave of absence expire? What type of leave are they on?” And this is usually enough to make them stop and think about that.
And let me tell you, 99% of the time, the employers tell me that their FMLA or state-level leave expired MONTHS prior!
This sets me on a path of damage control with the employer. Letters need to be sent, communication needs to happen, and I have to get the employer back on the right track.
What do I do??
When handling an employee going out on leave, the first thing in your mind has to be the leave itself. The leave will always fall into one (or maybe all) of these categories:
FMLA
State PFML or other leave laws
Company-sponsored leave plans
So, look at these, and you can figure out what your employee needs. Are they needing to go out on medical leave? Then if your company fits the bill to offer FMLA, offer that. They have up to 12 weeks for their medical condition. Are you in a PFML state? Offer them that as well. FMLA and state laws for PFML and job-protected leave will run concurrently (there are a few exceptions, but we can dive into that in another post). Do you have a company leave that also fits their situation? Run that too. Make sure all leave clocks are starting at the same time, so your employee doesn’t come back to you and say “HA! YOU forgot to offer me FMLA!” And BAM - that employee gets a bonus, extra 12 weeks off because of unintentional negligence.
We don’t want that, do we?
If you’ve followed the above, your next thoughts should be how the employee will be compensated during the leave. That usually falls into these categories (again, multiple may apply):
Short term disability
Long term disability
Accrued time
Paid time off (PTO)
State PFML pay
The mistake I see made is that employers completely skip the first part of this (the leave) and go straight to the pay, thinking they’re covering their bases.
Nope!
If you keep the leave and the pay separate in your head, it should be smooth sailing!
Do you still have questions or need more information on your specific situation? I’m here to help! Reach out to me or book some time with me!
