Leave of Absence Policy Template for Small Business
Quick Answer
A leave of absence policy explains when employees can take extended time away from work, how to request it, whether it's paid and what happens to their job and benefits. Federal law requires some types of leave: the FMLA covers private employers with 50 or more employees, the ADA can require unpaid leave as an accommodation at employers with 15 or more, and USERRA protects military service at employers of all sizes. Many states add their own leave laws.
Sooner or later, an employee will need more time off than a sick day or a week of vacation can cover. A new baby. Surgery and recovery. A parent who needs care. Military duty. A personal crisis. When that happens, both you and the employee need to know what to expect: Will their job be there? Will they be paid? What happens to their health insurance?
A clear leave of absence policy answers those questions before they come up. It helps you treat everyone consistently, follow the laws that apply to your business and plan coverage while someone is out. This guide covers the main types of leave, the federal laws small businesses should know, how to handle requests and a free policy template.
Note: This is general information, not legal advice. Leave laws are complex, depend on your business size and location, and many states and cities have their own leave requirements. Have an employment attorney review your policy.
What Is a Leave of Absence?
A leave of absence is an extended period of approved time away from work, usually longer than normal PTO or sick leave, after which the employee is expected to return. It can be paid or unpaid, required by law or offered voluntarily by the employer.
| Type of leave | Common reasons | Required by law? |
|---|---|---|
| Medical leave | Employee's own serious health condition, surgery, recovery | Sometimes (FMLA, ADA, state laws) |
| Family leave | Birth, adoption, caring for a family member | Sometimes (FMLA, state laws) |
| Military leave | Service in the armed forces or reserves | Yes, under USERRA |
| Jury duty | Serving on a jury | Depends on state law |
| Bereavement leave | Death of a family member | Depends on state law |
| Personal leave | Education, travel, personal matters | Usually voluntary |
See jury duty pay and the bereavement policy creator for those specific types.
Federal Laws Small Businesses Should Know
Family and Medical Leave Act (FMLA)
According to the Department of Labor, the FMLA applies to private employers with 50 or more employees in 20 or more workweeks, as well as public agencies and schools regardless of size.
An employee is eligible if they have worked for the employer for at least 12 months, have at least 1,250 hours of service in the 12 months before leave, and work at a location where the employer has at least 50 employees within 75 miles.
| FMLA rule | What it means |
|---|---|
| Amount of leave | Up to 12 workweeks in a 12-month period for most reasons |
| Military caregiver leave | Up to 26 workweeks in a single 12-month period |
| Reasons | Birth or placement of a child; caring for a spouse, child or parent with a serious health condition; the employee's own serious health condition; certain military family needs |
| Pay | Unpaid, though employees may use paid leave, and employers may require it, under the rules |
| Health insurance | Group health coverage continues on the same terms as if the employee had not taken leave |
| Job protection | Employee is restored to the same or a virtually identical position |
| Intermittent leave | Allowed when medically necessary; for bonding with a new child, only if employer and employee agree |
| Employee notice | As soon as possible and practical |
| Medical certification | Employers may request it and must allow 15 calendar days to provide it |
If your business has fewer than 50 employees, the FMLA probably doesn't apply to you, but state leave laws and the ADA still might.
Americans with Disabilities Act (ADA)
The ADA applies to employers with 15 or more employees. According to the EEOC, employers generally must consider unpaid leave as a reasonable accommodation for an employee with a disability, even if the employer doesn't offer leave as a benefit, the employee isn't eligible under the leave policy or the employee has used up the leave available. Employers can deny leave that would cause undue hardship.
The EEOC also says:
- Employers can have maximum leave policies, but may need to make exceptions for disability-related leave.
- Going beyond the amount of leave the FMLA would allow is not, by itself, enough to show undue hardship.
- Indefinite leave, with no estimated return date, can be an undue hardship.
- Policies requiring employees to be "100%" healed before returning can violate the ADA if the employee can do the job with or without reasonable accommodation.
- When leave isn't available under another program, employers should start an "interactive process" with the employee to discuss the need.
Uniformed Services Employment and Reemployment Rights Act (USERRA)
The Department of Labor says USERRA applies to all employers in the public and private sectors. It requires that returning service members be promptly reemployed in the same position, with the same seniority, status and pay, and it protects them from discrimination because of their service. Details on notice, length of service and benefits are in the Department of Labor's USERRA resources.
State and Local Leave Laws
Many states and some cities have their own laws on family leave, medical leave, paid sick leave, pregnancy leave, domestic violence leave, voting, jury duty and more. These laws may cover smaller employers than the FMLA, and some may provide paid leave. Check your state labor department for the rules that apply where your employees work.
What to Include in a Leave of Absence Policy
| Section | What it covers |
|---|---|
| Purpose | Why the policy exists and who it covers |
| Types of leave | Medical, family, military, personal and any others you offer |
| Legal leave | A statement that you follow the FMLA, ADA, USERRA and state laws where they apply |
| Eligibility | Who can take each type of leave, such as length of service |
| How to request | Notice, written request, who to contact |
| Documentation | When medical or other certification may be requested |
| Pay | Whether leave is paid or unpaid; use of PTO |
| Benefits | What happens to health insurance and other benefits |
| Job protection | What job the employee returns to |
| Length | Maximum length for voluntary leave; extensions |
| Staying in touch | Check-ins during leave, if appropriate |
| Return to work | Notice of return, fitness-for-duty requirements where lawful |
Free Leave of Absence Policy Template
Leave of Absence Policy
Purpose: [Company] recognizes that employees may need extended time away from work. This policy explains the types of leave available, how to request leave and what to expect during and after leave.
Legally required leave: [Company] provides leave as required by applicable federal, state and local laws, which may include the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), the Uniformed Services Employment and Reemployment Rights Act (USERRA) and state leave laws. Where this policy and the law differ, we follow the law.
Personal leave: Employees with at least [X months] of service may request unpaid personal leave of up to [X weeks]. Personal leave is approved at the company's discretion based on business needs.
Requesting leave: When the need for leave is foreseeable, submit a written request to [HR contact or manager] as early as possible, ideally [30 days] in advance. When it isn't foreseeable, notify us as soon as possible and practical.
Documentation: We may request documentation, such as medical certification, where permitted by law. All medical information is kept confidential and separate from personnel files.
Pay: Leave is unpaid unless paid leave is required by law or you choose to use available PTO [or: you are required to use available PTO, where permitted].
Benefits: [Describe what happens to health insurance and other benefits during leave, and any employee premium payments.]
Returning to work: Please confirm your return date at least [X days] before returning. [Describe job restoration for personal leave.]
Questions: Contact [name] at [contact information].
Have an employment attorney review the template before you use it, especially the pay, benefits and job restoration sections, which depend on the laws that apply to your business.
How to Handle a Leave Request
- Listen and gather basic information: the reason in general terms, expected start date and length.
- Figure out which laws may apply. Consider your business size, the employee's eligibility and the reason for leave.
- Respond promptly and in writing. Explain what the employee can expect.
- Request documentation only where allowed and keep medical information confidential.
- Plan coverage for the employee's work. See cross-training employees.
- Agree on how to stay in touch, if at all.
- Prepare for the return: confirm the date and any adjustments needed.
- Document everything and apply the same process to everyone.
Planning Coverage While Someone Is Out
For a small business, the hardest part of a leave is often covering the work. A few steps help:
- Document key tasks before leave begins, when possible. See how to keep knowledge from walking out the door.
- Assign each responsibility to a named person.
- Tell customers and vendors who to contact, where appropriate.
- Adjust schedules and priorities so the team isn't overloaded.
- Consider temporary help for longer leaves.
- Thank the people covering.
Welcoming Employees Back
- Confirm the return date and schedule ahead of time.
- Update them on changes while they were away.
- Restore access to systems and tools before day one.
- Discuss any approved accommodations.
- Schedule a check-in after the first week.
Common Leave of Absence Mistakes
- Assuming small businesses have no leave obligations. The ADA, USERRA and state laws can apply even if the FMLA doesn't.
- Applying rigid maximum leave rules without considering disability accommodation.
- Requiring employees to be 100% healed before returning.
- Asking for more medical information than needed or not keeping it confidential.
- Treating similar requests differently.
- Forgetting about benefits during leave.
- Penalizing employees for protected leave.
- No written policy, so decisions are made case by case.
Leave of Absence Checklist
| Step | Done? |
|---|---|
| Identify which federal laws apply based on employee count | |
| Check state and local leave laws | |
| Write and share the leave policy | |
| Set up a written request process | |
| Train managers on how to respond | |
| Keep medical information confidential | |
| Plan coverage for key roles | |
| Have the policy reviewed by an employment attorney |
Which Laws Might Apply? A Quick Guide by Size
| Employees | Federal laws to consider |
|---|---|
| Any size | USERRA (military service); state and local leave laws |
| 15 or more | ADA (leave as a reasonable accommodation), plus the above |
| 50 or more | FMLA, plus the above |
This is a starting point, not a complete list. State and local laws may apply at any size, so check where your employees work.
Leave Request Form
| Field | Entry |
|---|---|
| Employee name | |
| Type of leave requested | |
| Start date | |
| Expected return date | |
| Continuous or intermittent? | |
| Use PTO during leave? (if allowed) | |
| Contact preference during leave | |
| Manager or HR received (name and date) |
Keep medical details out of the general request form. If medical certification is needed, collect it separately and store it confidentially.
Questions Managers Often Ask
"Can I ask why the employee needs leave?" You can ask for enough information to understand what kind of leave may apply, but avoid asking for medical details beyond what's needed. When in doubt, route the request to whoever handles HR.
"Can I contact an employee on leave?" Brief, respectful check-ins can be fine if agreed in advance. Don't ask them to work while on leave.
Rolling Out Your Leave Policy
Add the policy to your handbook, share it in a team meeting and make sure managers know who handles leave requests. Review the policy at least once a year, and whenever your employee count crosses a threshold such as 15 or 50, since different laws may start to apply.
Manage Leave With Updoot
Updoot's PTO software tracks time-off requests, approvals and balances in one place, so managers can see who's out and plan coverage. The PTO calendar shows upcoming leave across the team, and SOP management keeps key procedures documented so work keeps moving while someone is away.
Sources
- U.S. DOL: Fact Sheet #28, The Family and Medical Leave Act
- EEOC: Employer-Provided Leave and the Americans with Disabilities Act
- U.S. DOL VETS: USERRA
- U.S. DOL: USERRA Advisor