Five Key Components of an Effective Leave of Absence Policy

by | Sep 8, 2010 | Blog, FMLA

  • Amy Letke

    Amy Newbanks Letke, SPHR, GPHR, is the Founder of Integrity HR, Inc. Amy provides workplace solutions to improve performance, reduce liability and increase profits. She is passionate about helping other entrepreneurs and business owners achieve success. Contact us for more insights - 502-753-0970 or

In the spirit of keeping our readers out of trouble (a common theme of our business), we’d like to talk a bit about policy development. One of the biggest things that gets employers in trouble from an employee relations standpoint is poor use (or no use) of formal internal policies. Many companies don’t even have an employee handbook, which obviously completely negates any sort of “that’s our policy” defense in case of legal issues.

The development of an effective leave of absence policy in a small employer company requires many considerations. Here are the five key components of an effective leave of absence policy:

  1. Legal Compliance
  2. Organizational Culture
  3. Cost
  4. Administrative Burden
  5. Workforce Demographics

Legal Compliance

Ensuring the company is in legal compliance is the highest priority for any employer.  Some leaves are legally required, depending on the size of the organization.  For instance, the Family Medical Leave Act (FMLA) is primarily concerned with companies of 50 or more employees.

The HR professional needs a thorough understanding of required state and federal leaves before developing a leave of absence policy.  Consideration should also be given to the future.  For example, a company with 45 employees with solid growth may want to go ahead and implement an FMLA policy.

Organizational Culture

The desired culture of the organization is also an important piece for the HR professional to understand.  This involves understanding the company’s strategic and philosophical tendencies. The company should consider how it wants to be viewed internally and externally.  A proper leave of absence policy may help a company that is concerned with attraction and retention issues.


With any organization, large or small, cost is going to be a crucial consideration.  A leave of absence policy can have direct and indirect costs to a company.  A direct cost would be the actual cost of having an employee gone (vacation pay, for instance).  An indirect cost may be the morale cost of those still at work.

Administrative Burden

Don’t forget about those who are left to keep track of everything. The administrative burden of this policy needs to be considered, as this can have a significant impact on smaller companies’ administrative staffs who are probably already stretched paper thin.  Complex leave policies require more administrative work to keep records accurate and policies current.

Workforce Demographics

Finally, an HR professional must understand the demographics of the workforce.  This allows a better understanding of what types of leaves will have the most impact.

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