Everything You Need to Know About Leave of Absence Management

by claudia
7 minutes
November 27, 2024

Last updated on March 20, 2025

Everything You Need to Know About Leave of Absence Management

📸 Lights, Camera… HR? Not Exactly.

HR and leave management tend to be more behind-the-scenes tasks. But that doesn’t mean it’s not important. Proper leave of absence management is at the heart of a productive, compliant, and happy workforce. It requires a precise system that supports employees and promotes productivity.

Managing leaves of absence is no small task, requiring careful navigation of legal technicalities, government communications, document handling, and compliance monitoring. But, not to worry, we’re here to guide you through the process. Keep reading to learn all you’ll need to know to manage leaves of absence effectively.

What is a Leave of Absence?

A Leave of Absence (LOA) is extended time off work to allow employees to address personal, medical, or other critical situations without losing their jobs. This type of leave is often used for reasons that go beyond standard vacation or sick days. Depending on a company’s policy and the country the business operates in, leaves of absence can be paid or unpaid. Often, in situations when they are unpaid, employees can continue to access their benefits and accrue vacation, so long as they can justify the reason for the leave and provide proof when necessary.

Types of Leave of Absence

Voluntary and mandatory leave

Voluntary leave: This type of time off is requested by the employee for personal or professional reasons and is typically granted at the employer’s discretion, as long as it aligns with company policies. Common reasons include personal health issues, family responsibilities, educational opportunities, or sabbaticals.

Mandatory leave: This type of time off is initiated by the employer. It may include government-mandated leave, such as jury duty, or administrative leave to ensure workplace security or address organizational needs.

Paid and unpaid leave

A leave of absence can be classified based on whether the employee receives compensation during their time away from work. The distinction between paid and unpaid leave often depends on the trigger, company policies, and applicable labor laws.

Paid leave: Employees earn their regular salary while they are away from work. This type of leave is commonly offered for situations such as parental leave, bereavement, short-term disability, or other absences covered by company benefits or government-mandated policies. Paid leave reflects an employer’s commitment to supporting their team during important or challenging life events.

Unpaid leave: Employees take time off without receiving compensation. Unpaid leave often guarantees job protection, enabling employees to address personal, family, or medical needs without the risk of losing their job. Examples include leave under the Family and Medical Leave Act (FMLA), extended personal leave, or situations where paid leave entitlements have been used up.

How to Manage Leave of Absence Effectively

Create a leave policy

A detailed leave policy is crucial for supporting employees, ensuring they can address personal matters without fear of unemployment.

A leave of absence policy should outline:

Eligibility and duration: Define who can take this type of time off and for how long.

Process and requirements to request leave: Inform your employees as to how they can request a leave of absence and what type of supporting documentation or proof they might need.

Compensation: Outline whether the leave is paid or unpaid for each circumstance so employees know what to anticipate when making the request. Make it clear if they still can access things like their employee health benefits while on leave. Lastly, specify whether compensation is provided by the company or through government programs and detail the steps required to access any applicable payments.

Return to work program: Create guidelines for a reintegration plan to ensure the transition back into the workplace is smooth. Address how employees can request reasonable accommodation prior to their return and what certifications are required to validate this request.

It’s also useful to include an FAQ policy to easily answer some common questions, like:

Is there a waiting period to be eligible for a leave of absence?
Will I get paid through my regular payroll?
Do I keep my benefits while on leave?
Who will see my medical records?

This helps your team get quick access to the questions they’ll likely have rather than coming to you for answers. Win, win!

Document and track absences with leave management tools

Leave of Absence management can be tricky because there are so many factors to ensure compliance. Proper documentation and tracking are essential for successful leave of absence management. Depending on the size of your organization, sometimes a leave tracking template in Excel is sufficient.

However, if your company is growing and keeping track of your employees’ leave is becoming increasingly time-consuming, complex, and worrisome, we recommend a leave management software. Automating the process keeps a proper document trace, ensures there are no errors in calculations, and makes compliance effortless. Plus, these systems make it easy to request leave, reducing unexpected absences and making workforce planning simple and effective.

Comply with laws and regulations

When managing leaves of absence, it’s essential to be familiar with the laws where your business operates. These laws are often regional, with Boston having different policies than Texas, for example. They also tend to change, some places more frequently than others. Los Angeles and New York are known for continuously updating their policies, so make sure to create a system to stay on top of these updates.

Consider a quarterly review of your policies to ensure everything is up to date and determine a way to share these updates with your team. A HR newsletter is a fun way to keep everyone in the know.

Provide support for your team

Leaves of absence are complex for management teams, but they’re also not easy for those who need them. Employees might be requesting this time off due to unfortunate circumstances, like illness or personal struggles. In these moments, employees need more than just policy compliance; they need compassion, understanding, and reassurance from their employer.

In 2024, 55% of leave requests were mental-health related. This highlights the growing importance of creating a supportive and empathetic workplace environment. Providing clear communication, flexible solutions, and access to resources can make a significant difference in helping employees navigate these challenging moments.

Benefits of Effective Leave of Absence Management

Improve employee satisfaction and retention

A well-managed business means happy employees. Teams need clarity about their benefits and leave entitlements to feel secure about their job standing. Feeling supported during critical personal or professional situations tends to reduce stress and improve well-being. Research shows that this results in a sentiment of loyalty to their organization and a desire to stay within the company, improving overall retention and creating a more stable workplace environment for all.

Transparent leave policies help employees understand their rights and entitlements, fostering trust and job satisfaction. A company that values employee well-being demonstrates its commitment to a positive workplace culture, leading to higher morale and lower turnover.

Ensure compliance

Proper management ensures adherence to leave laws and regulations, which vary by location and industry. Staying compliant reduces the risk of fines, legal disputes, and reputational damage while also demonstrating the organization’s integrity and commitment to fairness.

Proactively monitoring and updating leave policies based on evolving legislation helps businesses maintain compliance effortlessly, which not only benefits employees but also businesses’ bottom line.

Reduce administrative burden

In 2024, HR managers report a rise in leave requests, with the majority seeing increases of 20% or more. This is only adding to their growing workload. Streamlining leave processes reduces the time and effort required to manage requests, approvals, and tracking, allowing HR teams to focus on strategic initiatives instead of manual calculations and paperwork.

Effective management of leaves of absence often requires tools like Vacation Tracker. This helps teams avoid errors in payroll adjustments, leave balances, and scheduling, not only reducing the time spent managing the leaves but also the time spent fixing time-consuming errors. Overall, having an effective system in place to manage leaves of absence will result in less busy work and improved productivity.

Enhance workforce planning

When managing leaves of absence, HRs need to have a good understanding of their team's availability to ensure coverage for an absent employee’s responsibilities. Efficient leave tracking offers a better understanding of staff availability, allowing managers to address staffing gaps.

A leave management system provides detailed insights into your team's leave usage and, at-a-glance access to who’s away, makes it easier to allocate resources properly and meet project deadlines to maintain team productivity.

How Technology Supports Leave of Absence Management

Technology has become an essential tool for HR teams. In fact, in 2024, 66% of employers cited improving leave management as one of their top three concerns, reflecting the increasing demand for efficient solutions.

A leave of absence management software streamlines this process. Vacation Tracker is the go-to tool for all your managing everything from PTO and vacation to short-term disability and military leave. Our all-in-one solution is easy to use and makes managing leaves of absence effortless by: