Leave of Absence Agreement

A Leave of Absence Agreement is a written agreement between an employer and an employee. It documents the terms and conditions of an employee’s leave of absence from a business. A leave of absence agreement grants an employee an absence from their job for a specific length of time, so they may attend to other matters. The employer agrees to hold the employee’s job (or, in some cases, a similar position) for the employee upon return from leave. The employee agrees to return at a specified time.

Depending on the facts and circumstances of an individual case, a leave of absence agreement may include additional requirements that are fact-specific. Some examples include:

A requirement the employee document job-specific training while on leave;
Documentation of a medical need; or
Regular updates regarding the purpose of the leave.

Table of Contents

When a Leave of Absence Agreement is Needed
Consequences of Not Having a Leave of Absence Agreement
Most Common Uses for a Leave of Absence Agreement
What Should be Included
Leave of Absence Agreement Sample
Frequently Asked Questions

Different Types of Leave

There are generally two different types of leaves of absence contemplated by a leave of absence agreement. These include extended leave and intermittent leave.

Extended Leave

Extended leave refers to a leave of absence for several weeks or months to address a life situation, such as the birth of a child, the need to settle the estate after the loss of a parent, dealing with illness, or other situation approved by the employer.

Intermittent Leave

*Please note that Intermittent Leave is not covered under the scope of our LegalTemplates document.

On the other hand, intermittent leave requests either a reduction in hours per day or a reduction of days worked for reasons such as ongoing education or training. For example, an employee may request intermittent leave where they work 6 hours, instead of 8, each day for the next two months.

In the case of medically related intermittent leave, the request may involve attending a standing medical appointment or a shorter workday while recovering from an illness, such as cancer. [1]

When a Leave of Absence Agreement is Needed

Leave of absence agreements benefits both employer and employee in different ways.

When Employers Need a Leave of Absence Agreement

When a valued employee indicates a desire to leave employment for personal reasons, you as an employer may wish to execute a leave of absence agreement. This agreement offers the employee assurances you will hold their job for them while they are away. You can set the terms and conditions, including, for example:

The length of time the agreement is valid;

Your expectations about employee conduct during the leave (for example, if the employee requests intermittent leave to attend a college class, you may require the employee to participate in class, and/or hand in assignments on time, and/or receive a passing grade);

Documentation required if any;

Any competency testing or proficiency testing to be performed upon return from leave; and,

The conditions which convert a voluntary leave to a termination.

Incorporating the above definitions and parameters will help protect your business by clearly defining the obligations and responsibilities of both parties.

Defining the nature and length of a leave of absence is an excellent first step when creating a leave of absence agreement. Keep in mind that the more detailed you are, the more effective and comprehensive it will be.

When Employees Need a Leave of Absence Agreement

If you plan to take a leave from employment, a leave of absence agreement protects you and your position in the company. Leave of absence agreements is contracts. They are a written guarantee you won’t lose your job, your seniority, or your place in the company due to your leave.

It also details expectations about benefits, conditions that must be met during the leave and immediately before return from leave, and how an employee’s leave may transform into a termination.

For Both Employers and Employees

A leave of absence agreement defines the terms and conditions of leave. Any time an employee takes a leave of absence, a written agreement defining the terms of the leave and the expectations of both parties protects the rights of both.

Consequences of Not Having a Leave of Absence Agreement

Without a Leave of Absence Agreement, employees have no guarantee that their job or a similar position will be available for them when they are ready to return. Employers face uncertainty about when or whether an employee will return.

Without reducing the agreement to writing, unintended consequences often present themselves. Failing to use a written document detailing the terms of the leave leaves the initial intentions, and agreed-upon obligations, to one’s memory, making it highly susceptible to change or breach.

For example, miscommunication may result in the loss of benefits if the employee fails to pay an employer their agreed-upon share. Alternatively, an employee may not understand a doctor’s note is required to return to work, resulting in unexpected delays.

Disputes regarding the terms of the leave may result in unhappy employees, employers short of staff they need to complete the work, and, in some cases, lawsuits.

The time it takes to execute a leave of absence agreement is significantly less than the time and heartache (not to mention cost) of litigating an issue that could have been addressed in an executed written agreement.

Most Common Uses for a Leave of Absence Agreement

An employer can use a leave of absence agreement in any situation they believe merits granting a leave of absence. However, the most common reasons for using this document include the same reasons listed under the Family and Medical Leave Act (FMLA). Of course, the FMLA only covers employers and employees who meet specific criteria. [2]

Reasons for a leave of absence include:

The birth of a child;
The adoption of a child;
A child placed in the home in foster care;
An employee dealing with a serious health condition; or
A situation arises from an emergency related to a spouse, child, or parent on active duty status.

Other situations where an employer may but is not legally required to agree to a leave of absence include:

A leave to provide time to handle the estate after the death of a parent;
A leave to spend time with and care for small children during the summer months;
Taking a class or training to advance their career;
Attending school abroad for a semester;
Care for a loved one not covered under the FMLA, such as for a roommate or dear friend; or
Extended bereavement leave.

Keep in mind that an employer is not required to offer extended bereavement leave. However, if an employee wants to provide this type of leave, they are free to do so.

In addition to federal law, all states have state-specific leave laws. [3] These laws provide various situations, such as leave for parents to attend school-related activities or recovery time for bone marrow donors.

What Should be Included

Dates of the Leave

For extended leave, a leave of absence agreement should include both the start date and the anticipated end date of the leave. If the leave length is uncertain, such as when dealing with a health condition, the end date should still be included, along with any language detailing extensions.

Extension Details of the Leave

In situations where an extension may be required, such as when dealing with an illness, extension details should be addressed comprehensively, including:

How: how an extension should be requested (including whether the request must be in writing);

Timeframe: the date of the extension request about the anticipated end date of the leave;

Parties to the extension: identify all contacts who must receive notification regarding any requested extension;

Other terms: whether other terms and conditions of the leave (such as who pays for benefits, the accrual of vacation, etc.) change or remain the same in the event of an extension;

Resignation: if the extension request does or may constitute a resignation; and

Modifications: the circumstances under which an extension request modifies the employer’s obligation to hold the same position as opposed to another position within the company.

Other Details Regarding Leave

Additionally, you should include the following details about the leave of absence:

Whether the employer expects reports about the status of the leave on an ongoing basis;

If the employer expects a physician’s statement, either during ongoing leave or as a condition of returning to work, as well as the contents of the statement (i.e. “released back to work,” “no longer contagious,” etc.); and

The consequences if the employee doesn’t meet the terms and conditions of the agreement.

Details about Benefits (If Any)

The agreement should address and delineate all details about job benefits during the leave. Such benefits include:

Whether the employee must exhaust paid vacation and sick time before taking unpaid leave;

Whether vacation and ill time still accrue during the absence;

If vacation and sick time still accrue, and if they do, whether the rate is the same or different than accrual during full-time employment;

Whether the employee still qualifies for health, dental, life, and disability insurance;

Who pays for the benefits such as health, dental, life, and disability, and in what proportion;

Whether the leave impacts any pension plan contributions made by the employer;

How the employer expects employees to pay their portion of the benefits (if applicable); and,

The consequences of the employee not paying their portion of the benefits.

Details about the Job Position

A leave of absence agreement should specify whether an employer anticipates holding the employee’s current job. Additionally, the agreement should detail whether there is a possibility that no position will be available when the employee is ready to return.

If this is a possibility, the agreement should address alternatives. Will the employer offer them the next available position? Will the employer consider them for the next open position without application? Both the employer and the employee should know the benefits and the potential risks involved.

Sometimes, a given benefit or condition does not apply. Addressing the issue is the best approach, rather than remaining silent on any issue where the parties may disagree.