An Employer’s Guide to Unpaid Time Off

Time off is an intrinsic part of every employee’s professional life. When managed well, it can produce plenty of benefits for both the employers and their teams.

Companies handle their staff members’ leave time differently, depending on the legal environment where they operate, their workplace culture and corporate values. But in general, leave benefits across businesses are a combination of paid and unpaid time off (UTO).

In this piece, we will discuss every aspect of UTO management from the employers’ perspective. Here, you will learn what UTO is and how to create an efficient UTO policy. You will also read about some relevant laws, the benefits of UTO and the best leave management practices.

What Is UTO?

Basically, there are two major types of employee leave — paid and unpaid. Both of them can be taken to indulge in a short break from work, recover from a disease and attend to some personal needs or the needs of the loved ones. The main difference between the two is that UTO is not compensated by an employer — an employee has to pay for it from their own pocket.

Most of the companies don’t let their staff members make use of UTO that freely and prefer to apply specific rules on how and when a person can request UTO:

  • It’s not uncommon for employers to limit the number of paid and unpaid days off a worker is allowed to take a year to avoid problems with workload distribution.

The latter rule implies that some companies offer UTO in addition to PTO. But many organizations provide it instead of PTO, which is particularly frequent in such countries as the United States, where employers have no legal obligations to pay for their workers’ vacation.

Let’s take a look at some legal issues related to UTO.

Relevant Labor Laws

In the United States, employers are generally left to decide whether to offer PTO or UTO to their employees since there are no federal laws mandating to give any sort of vacation time to workers. However, under the Family and Medical Leave Act (FMLA), companies with over fifty staff members are required to provide up to twelve weeks of UTO a year in case an employee needs to:

  • Recover from a serious health condition,

Besides, employers have no right to fire or discipline an employee who wants to take a break from work in order to perform jury service. It means that a person must be able to procure enough UTO (or PTO) for that specific occasion.

State laws are worth employers’ close attention too:

  • Thirteen states and Washington D.C. have recently enacted the paid sick leave regulations requiring private-sector employers to pay for workers’ sick days.

Still, companies across the United States are generally not required to give either paid or unpaid vacation to their workers.

Main Benefits of Providing UTO to Employees

A decent UTO policy produces plenty of advantages for an employer, regardless of whether they grant unpaid leave allowances in addition to PTO or not:

By affording more opportunities for team members to have a break from work and focus on personal matters, an employer helps them to better cope with job-related stress, improve work-life balance and enhance their health condition. These effects, in turn, are bound to promote organizational productivity and reduce business costs.

What to Cover in a UTO Policy?

If you want to offer a UTO package to your team members, you need to develop a policy that outlines all the rules and procedures you plan to apply. This document will protect the company from productivity drops, as well as the immense costs of uncontrolled employee absenteeism and time off abuse.

Here are four primary points your policy must specify:

  • Is there also a PTO package in your company? If so, you should create a separate PTO policy. Plus, you need to clarify if your workers have to use up their accrued PTO prior to requesting unpaid days off. Note that on some occasions it’s appropriate to let your team members take UTO even with an unused PTO balance. Disability leave, parental leave, leave due to domestic violence and bereavement leave are just a few examples.

Key Rules of Successful UTO Management

Leave request processing, time off accrual, absence tracking and data analysis are the four core components of successful UTO management. For better results, do the following:

  • Use a straightforward calendar for scheduling and absence tracking. Digital calendars are a better option — they allow users to add, edit and review necessary data easily and, thus, save a ton of time.

If you’re looking for a smart time off management system that incorporates many valuable features, consider actiPLANS. This tool streamlines time off accrual, leave planning and request approval. Besides, it fosters an easy overview of available resources and an intelligent analysis of the company’s leave time statistics.

Sign up for a free 30-day trial today and improve your UTO management experience with actiPLANS.

Originally published at

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