{"id":20779,"date":"2020-06-17T10:59:28","date_gmt":"2020-06-17T08:59:28","guid":{"rendered":"https:\/\/factorialhr.com\/blog\/?p=20779"},"modified":"2025-05-17T04:22:05","modified_gmt":"2025-05-17T02:22:05","slug":"unpaid-time-off","status":"publish","type":"post","link":"https:\/\/factorialhr.com\/blog\/unpaid-time-off\/","title":{"rendered":"Employee Unpaid Time Off: Tips, Facts &#038; Legal Obligations"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Unpaid time off can be tough to manage. It includes any absence from work not covered by existing employee benefits such as sick leave, paid vacations, and paid time off. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although outside of FMLA, there is not necessarily any legal obligation to agree to unpaid leave, many companies offer a leave of absence in the event of exceptional circumstances such as moving house or attending a funeral.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In this post, we will discuss<strong> what an unpaid leave of absence is, and how offering it to employees could benefit your company<\/strong>. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Also, we will look at <strong>employee eligibility, legal issues, and unpaid time off laws<\/strong>. We will also share a few tips for creating an effective absence management policy and answer a few frequently asked questions.<\/span><!-- end HubSpot Call-to-Action Code --><\/p>\n<ul>\n<li><a href=\"#Definition\">What is Unpaid Leave?<\/a><\/li>\n<li><a href=\"#Personal\">PTO vs. Unpaid Time Off<\/a><\/li>\n<li><a href=\"#Comparison\">Part Time vs Full Time<\/a><\/li>\n<li><a href=\"#Calculations\">Time Off Calculations<\/a><\/li>\n<li><a href=\"#Requests\">Applying For Unpaid Leave<\/a><\/li>\n<li><a href=\"#Exempt\">Exempt Employees<\/a><\/li>\n<li><a href=\"#Furlough\">Unpaid Leave and Employee Furlough<\/a><\/li>\n<li><a href=\"https:\/\/factorialhr.com\/holidays-leaves-software\">\u2705 Time off Management Software<\/a><\/li>\n<li><a href=\"#Laws\">Requesting Time Off from Work Laws<\/a><\/li>\n<li><a href=\"#Policy\">Unpaid Time Off Policy Samples<\/a><\/li>\n<li><a href=\"#FAQ\">UTO Essential FAQs<\/a><\/li>\n<\/ul>\n<h2><b><a name=\"Definition\"><\/a>What is Unpaid Time Off?<\/b><\/h2>\n<p><iframe title=\"What is Un-Paid Time Off? EVERYTHING TO KNOW\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/Z6MPINX1YsQ?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p><span style=\"font-weight: 400;\">Employers may pay employees for time off taken as part of their <a href=\"https:\/\/factorialhr.com\/blog\/managing-paid-time-off\/\" target=\"_blank\" rel=\"noopener\">paid time off (PTO) policy<\/a>. Many organizations will offer accrued or lump sum paid leave for vacation, sickness, or medical leave. <\/span><span style=\"font-weight: 400;\">If an employee is absent for any other reason, it is often up to the company to decide whether the time will be paid or not.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Employers may offer <strong>unpaid time off<\/strong> (UTO) in addition to paid time off. There are three main avenues through which employees receive unpaid time off:<\/span><\/p>\n<h3><strong>Unpaid time off policy<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Employers may develop an unpaid time off policy to support employees with more flexibility. They may offer UTO to hourly workers, part-time employees, or the entire staff.<\/span><\/p>\n<p>Each organization&#8217;s UTO policy may differ. Some may stipulate that employees must use all of their paid time off before they can start to use unpaid time off. Some may insist that employees seek coverage from FMLA in order to be eligible for UTO.<\/p>\n<h3><strong>Family and Medical Leave Act<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Even if a business does not offer unpaid time off, employees will be able to claim unpaid leave through the <a href=\"https:\/\/www.dol.gov\/general\/topic\/benefits-leave\/fmla\" target=\"_blank\" rel=\"noopener\">Family and Medical Leave Act (FMLA)<\/a>. First passed in 1993, this law provides certain employees up to 12 weeks of unpaid, job-protected leave a year, with preserved medical benefits. This time off can be used:<\/span><\/p>\n<ul>\n<li>for the birth of a child<\/li>\n<li>in the case of the placement an adoption or foster child<\/li>\n<li>to care for an immediate family member with a health condition<\/li>\n<li>in the case of serious health condition on the part of the employee<\/li>\n<\/ul>\n<p>In order to qualify for this leave, employees must have worked for their employer for at least 12 months, at least 1,250 hours over the past 12 months, and work at a location where the company employs 50 or more employees within 75 miles.<\/p>\n<p>Various states, such as California, Connecticut, Hawaii, Maine, Minnesota, New Jersey, Oregon, Rhode Island, Vermont, Washington and Wisconsin, as well as Washington, D.C. also have their own versions of FMLA. These laws may offer more UTO for employees residing there.<\/p>\n<h3><strong>Furlough<\/strong><\/h3>\n<p>A furlough is a mandatory leave of absence and is usually expected to be temporary. Furloughs may be used when an employer does not have enough cash for payroll (for example, government shutdowns due to lack of budget approval) or when there is not enough work for all employees. Employers may reduce employee hours in order to avoid terminating employees.<\/p>\n<h2><b><a name=\"Personal\"><\/a>Paid Time Off vs. Unpaid Time Off<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Personal time off or Paid time off (PTO) refers to time away from work that is compensated by the employer. A <strong>PTO policy<\/strong> clearly outlines guidelines for requesting time off. <\/span><span style=\"font-weight: 400;\">It details when employees can request PTO, what the process is, and if there is a limit (such as a maximum of two days per year for moving house).\u00a0<\/span><\/p>\n<p><strong>Employees may request unpaid time off (UTO) for the following reasons:<\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">To care for dependents<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">As an extension of parental leave<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">To attend a course\/professional development<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">As a career break<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">For voluntary work<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">To carry out public duties such as jury service<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">New employee relocations, or time off to move house<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Leave related to domestic violence<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Jury duty in certain states (although most require it to be paid time off)<\/span><\/li>\n<\/ul>\n<p>Employees may also use <a href=\"https:\/\/factorialhr.com\/blog\/time-in-lieu-explained\/\">time in lieu<\/a>, and use extra hours to make up for time off taken.<\/p>\n<p><a href=\"https:\/\/factorialhr.com\/request-demo\"><img decoding=\"async\" class=\"alignnone wp-image-120292\" src=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2023\/11\/06173050\/PTO-demo-banner-click-300x103.png\" alt=\"pto requests software demo\" width=\"801\" height=\"275\" srcset=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2023\/11\/06173050\/PTO-demo-banner-click-300x103.png 300w, https:\/\/factorialhr.com\/wp-content\/uploads\/2023\/11\/06173050\/PTO-demo-banner-click-768x263.png 768w, https:\/\/factorialhr.com\/wp-content\/uploads\/2023\/11\/06173050\/PTO-demo-banner-click.png 900w\" sizes=\"(max-width: 801px) 100vw, 801px\" \/><\/a><\/p>\n<h2><b><a name=\"Comparison\"><\/a>How Does Unpaid Time Off Work?<\/b><\/h2>\n<p>Unpaid time off works differently depending on your company&#8217;s policies and the type of contract that an employee has.<\/p>\n<p><span style=\"font-weight: 400;\">However, the <\/span><a href=\"https:\/\/www.healthcare.gov\/glossary\/affordable-care-act\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Affordable Care Act<\/span><\/a><span style=\"font-weight: 400;\"> (ACA) defines part-time workers as employees who work fewer than 30 hours per week. Part-time positions usually consist of fewer responsibilities, and more limited benefits, including paid time off, although this can vary by company. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Generally speaking, distinguishing full-time vs. part-time employees comes down to the benefits you offer.\u00a0<\/span><\/p>\n<p><strong>Full-time employees are more likely to <a href=\"https:\/\/factorialhr.com\/blog\/guide-to-employee-benefits-and-compensation\/\" target=\"_blank\" rel=\"noopener\">receive the following benefits<\/a>:<\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Vacation time<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Paid Time Off<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Unpaid Time Off benefits<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Health insurance<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Employer retirement plans<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Overtime pay for non-exempt employees<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">As a company, you may decide to limit your PTO policy to full-time staff. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">If that is the case, then you need to outline this in your time off policy. You also need to clarify whether part-time employees are entitled to request unpaid time off work, or whether this benefit will be limited to full-time staff only, too.\u00a0<\/span><\/p>\n<h3><strong><span style=\"font-size: 18pt;\"><a href=\"https:\/\/factorialhr.com\/templates\/pto-accrual-calculator\">\u2705 Download our PTO accrual calculator<\/a><\/span><\/strong><\/h3>\n<h2><b><a name=\"Calculations\"><\/a>How to Calculate Paid and Unpaid Time Off for Salaried Employees<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Payroll calculations for time off paid and unpaid can be confusing. As a company, you need to establish calculations for all absences, including sickness, vacations, UTO, and PTO.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If a non-exempt employee takes an unpaid leave of absence, the number of days they are absent from work needs to be reflected on their payslip. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">As non-exempt employees work on an hourly basis, usually managed with timesheets, and they are usually not entitled to PTO, then adjusting their wages and payslip for unpaid time away from work should be pretty straightforward.<\/span><\/p>\n<h3><strong>Time Off Calculations for Exempt Employees<\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">In the case of exempt employees, this can be a little more complicated. If your company has a PTO policy that covers the absence, then no adjustments need to be made. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, if you decide that time off will not be paid by your company then you have a few options. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You might decide to enforce the use of <strong>accrued time<\/strong> or vacation days for absences due to personal reasons, or you might decide that absences of this type will be classes as Unpaid Time Off.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In this case, in the event of an absence, you would need to calculate the employee\u2019s hourly rate by dividing their gross salary by the number of hours worked each month. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">You would then need to calculate the actual hours worked in that specific month, then multiply it by the employee\u2019s calculated \u201chourly rate\u201d. This adjusted gross amount would then be subject to the usual tax deductions. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Keep in mind that when an employee works fewer hours and earns lower wages, their tax liability decreases.<\/span><\/p>\n<p><span data-sheets-root=\"1\">Say goodbye to chaos with smarter <a href=\"https:\/\/factorialhr.com\/\">Business Management Software.\ud83d\udc47<\/a><\/span><br \/>\n<a href=\"https:\/\/factorialhr.com\/\"><img decoding=\"async\" class=\"alignnone wp-image-158812 size-full\" src=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2024\/02\/15165042\/Banner-Demo-Factorial-All-in-One-English.png\" alt=\"Business Management Software\" width=\"1212\" height=\"500\" srcset=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2024\/02\/15165042\/Banner-Demo-Factorial-All-in-One-English.png 1212w, https:\/\/factorialhr.com\/wp-content\/uploads\/2024\/02\/15165042\/Banner-Demo-Factorial-All-in-One-English-300x124.png 300w, https:\/\/factorialhr.com\/wp-content\/uploads\/2024\/02\/15165042\/Banner-Demo-Factorial-All-in-One-English-1024x422.png 1024w, https:\/\/factorialhr.com\/wp-content\/uploads\/2024\/02\/15165042\/Banner-Demo-Factorial-All-in-One-English-768x317.png 768w\" sizes=\"(max-width: 1212px) 100vw, 1212px\" \/><\/a><\/p>\n<p><!-- end HubSpot Call-to-Action Code --><\/p>\n<h2><b><a name=\"Requests\"><\/a>How Can Employees Apply for Unpaid Time Off?\u00a0<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">If you have decided to include an unpaid leave policy in your internal procedures then you need to clearly define the process for applying for unpaid time off. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Your policy should address how employees can request time off, how much notice they need to give, how many days they are entitled to in a given period, and what happens if two people from the same department request UTO at the same time.<\/span><\/p>\n<p><strong>As a guide, the general process should be as follows:<\/strong><\/p>\n<ol>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">An employee submits a written request for unpaid time off, within the required notice period. This would usually be done through a direct manager or supervisor and using the process or a system defined in the absence or time off policy.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The manager or supervisor consults with HR and\/or department heads. The impact of the absence is assessed (will it cause staffing or production issues?)<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The manager or HR approves or denies the request. Requests are prioritized based on a first-come, first-served basis.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The employee ensures all their duties will be covered during their absence, arranging cover and\/or training if necessary.<\/span><\/li>\n<\/ol>\n<p>Want an easier option? Use <a href=\"https:\/\/factorialhr.com\/holidays-leaves-software\" target=\"_blank\" rel=\"noopener\">HR software with time off management features<\/a>. Approving or denying time off requests will be a single click, and calculating wages and hours worked will be much easier.<\/p>\n<h2>Can an Employer Deny Unpaid Time Off?<\/h2>\n<p><strong>In many cases, unpaid time off will only be granted if all accrued time has been used up. Exceptions to this can include:<\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Disability leave<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Parental leave<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Leave related to domestic violence, sexual assault, or stalking<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Leave designated as FMLA<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A PFML leave of absence (Paid Family and Medical Leave)<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Make sure you clearly define all this information in your internal policy.<\/span><\/p>\n<h2><b><a name=\"Exempt\"><\/a>Unpaid Time off for Exempt Employees<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Before you write your policy, you also need to establish if your employees are exempt or non-exempt. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Asking the question of whether unpaid time off for exempt employees is going to be key. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Under the FLSA, an employee is considered exempt if they are paid a salary and receive a minimum of $455 per week. An employee is also considered exempt if they perform executive, administrative, or professional duties.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Whilst exempt employees receive a full salary for any week in which they work regardless of the hours or days worked, non-exempt employees receive an hourly wage so they only get paid when they work. This means that any time off should, theoretically, be paid for exempt employees. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">If time off is not paid, a company runs the risk of contravening paid time off laws such as the FLSA. Often, a company will insist that exempt employees used accrued time and vacation days to get around this problem. The <\/span><a href=\"https:\/\/www.dol.gov\/\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">Department of Labor<\/span><\/a><span style=\"font-weight: 400;\"> (DOL) favors this option.\u00a0<\/span><\/p>\n<h2><b><a name=\"Furlough\"><\/a>Unpaid Leave and Employee Furlough<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Employee furlough is a temporary, involuntary leave of absence. Furloughs are most commonly used in the seasonal industry to allow a company to close business during quiet periods. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, they have become common practice in many other sectors around the world since the start of the current Covid-19 pandemic.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A company can furlough its employees for days, weeks, or months, and employees usually return to their positions after the furlough period has ended. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Most employees that are furloughed do not get paid, but they do keep employment benefits such as health insurance. Many companies use furloughs as temporary cost-saving solutions that are an alternative to permanently <a href=\"https:\/\/factorialhr.com\/blog\/laying-off-employees\/\" target=\"_blank\" rel=\"noopener noreferrer\">laying off employees<\/a>.<\/span><\/p>\n<p><a href=\"https:\/\/factorialhr.com\/templates\/download-free-hr-audit-checklist\"><img decoding=\"async\" class=\"alignnone wp-image-114865\" src=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2019\/08\/23152335\/hr-audit-checklist-banner-300x103.png\" alt=\"hr-audit-checklist-download\" width=\"807\" height=\"277\" srcset=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2019\/08\/23152335\/hr-audit-checklist-banner-300x103.png 300w, https:\/\/factorialhr.com\/wp-content\/uploads\/2019\/08\/23152335\/hr-audit-checklist-banner-1024x350.png 1024w, https:\/\/factorialhr.com\/wp-content\/uploads\/2019\/08\/23152335\/hr-audit-checklist-banner-768x263.png 768w, https:\/\/factorialhr.com\/wp-content\/uploads\/2019\/08\/23152335\/hr-audit-checklist-banner.png 1350w\" sizes=\"(max-width: 807px) 100vw, 807px\" \/><\/a><\/p>\n<h2><b><a name=\"Laws\"><\/a>Requesting Time Off from Work Laws<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Generally speaking, it is up to you as the employer to decide whether employees are offered paid and\/or unpaid time off. However, there are certain situations where a company is legally required to abide by the employment laws, at a state or federal level, to authorize time off.\u00a0<\/span><\/p>\n<p><strong>Here are a few examples of employment and <a href=\"https:\/\/factorialhr.com\/blog\/wage-and-hour-laws\/\" target=\"_blank\" rel=\"noopener noreferrer\">wage and hour laws<\/a>:<\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Fair Labor Standards Act (FLSA) does not require payment for time not worked in the private sector, such as vacations, sick leave or federal holidays. These benefits are provided at the discretion of each company.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The<\/span><a href=\"https:\/\/www.dol.gov\/agencies\/whd\/fmla\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\"> Family and Medical Leave Act<\/span><\/a><span style=\"font-weight: 400;\"> (FMLA) requires companies with a staff of over 50 to give employees unpaid time off for <a href=\"https:\/\/factorialhr.com\/blog\/intermittent-leave\/\" target=\"_blank\" rel=\"noopener noreferrer\">intermittent leave<\/a>, or to care for a family member. If an employer qualifies for FMLA, employees can take up to 12 weeks of unpaid time off work.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Federal law requires federal government employers to allow their employees to take paid\/unpaid time off on designated holidays such as New Year\u2019s Day and Memorial Day.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Employees that attend jury duty are protected by most states. And in states such as\u00a0 Massachusetts, Nebraska, and New York, employees must be paid for their time off.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Maine passed a new sick leave policy in 2019 to cover paid sick leave and other personal time off. It will require companies with a staff of over 10 to provide employees with paid time off for any reason. The new law takes effect on January 1, 2021, and it means employers in Maine may no longer be able to offer unpaid time off to employees.\u00a0\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 18pt;\"><strong><span style=\"font-size: 12pt;\"><a href=\"https:\/\/factorialhr.com\/blog\/legal-issues-hr-law\/\" target=\"_blank\" rel=\"noopener noreferrer\">Learn more about HR Legal Issues &amp; HR Law<\/a><\/span><\/strong><\/span><br \/>\n<!-- end HubSpot Call-to-Action Code --><\/p>\n<h2><b><a name=\"Policy\"><\/a>Unpaid Time off Policy Sample for Small Business<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Research has shown that employers with detailed time off policies experience lower levels of employee absence from sickness, vacation, and personal days.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In a nutshell, company culture with clear guidelines for taking time off, whether paid or unpaid, fosters an environment with increased employee motivation, wellness, and loyalty. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Using unpaid time off policy samples to get you started is a great way to speed up the process of managing these requests.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, before offering employees unpaid time off, you need to know if you legally can. And whether you decide to offer employees UTO, PTO, or both, you need to have a clear absence policy in place.\u00a0<\/span><\/p>\n<h3><strong>The unpaid time off policy should specify:<\/strong><\/h3>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">If you offer paid and unpaid leave. If you offer both, you need a separate policy for each category.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Which employees have access to paid and unpaid time off. For example, if you are offering PTO to some employees (full-time employees) and UTO to others (part-time employees).<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The number of unpaid days employees can take.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How employees can request time off.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Whether there is a cap for paid and unpaid days away from work.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">What happens when an employee reaches that cap (for example, if an employee uses up their allocated PTO, are they entitled to UTO?).<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">How employee hours and absences will be tracked (access cards, timesheets, <\/span><a href=\"https:\/\/factorialhr.com\/time-attendance-signing\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"font-weight: 400;\">attendance software<\/span><\/a><span style=\"font-weight: 400;\">, etc.).<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">If PTO and UTO will affect an employee\u2019s attendance record.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If you use <a href=\"https:\/\/factorialhr.com\/time-attendance-signing\" target=\"_blank\" rel=\"noopener noreferrer\">employee attendance tracker software<\/a> you can integrate your policy to help streamline your processes. It is important that you choose <a href=\"https:\/\/factorialhr.com\/blog\/pto-tracking-software\/\">the best PTO Tracking Software<\/a>.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, if your policy defines how many days off can be taken each year (paid and\/or unpaid) then you can share this information with employees through the software. This could reduce potential conflict and make employees accountable for their absences.<\/span><\/p>\n<h3><a href=\"https:\/\/factorialhr.com\/templates\/2024-time-off-tracker-template\" target=\"_blank\" rel=\"noopener\"><strong><span style=\"font-size: 18pt;\">\u2705 Download our time off tracker template<\/span><\/strong><\/a><\/h3>\n<h2><b><a name=\"FAQ\"><\/a>Essential Unpaid Time Off FAQs\u00a0<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Here are a few answers to common questions. Let us know in the comments if you have any other questions.<\/span><\/p>\n<h3><b>Do I need an unpaid time off policy in my company?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Whether you decide to pay employees for time off is up to your company. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although there is no legal obligation, many companies decide it is good practice under certain conditions. If you do decide to offer unpaid time off, then you need a clear UTO policy that sets out your internal guidelines and procedures.<\/span><\/p>\n<h3><b>How much time off should new employees receive?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">In the U.S., most employers give new employees an average of ten paid days of time off per year (once they have completed their probationary period). If you offer PTO, you need to establish whether you will allocate days at the start of each year, or if employees must accrue them.<\/span><br \/>\n<!-- end HubSpot Call-to-Action Code --><\/p>\n<h3><b>How far in advance should employees request time off?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Again, this will depend on your company\u2019s time-off policy and the process for requesting time off. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Keep in mind that the more notice you require, the longer your managers will have to assess the impact of the absence and approve or refuse the request.\u00a0<\/span><\/p>\n<h3><b>What if an employee reaches the cap for paid time off?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">If you have a PTO policy then you need to decide if there is a limit to how many days off an employee can request. And if they reach their PTO cap, will they be entitled to UTO? Or will they have to take it from their vacation days or accrued time?\u00a0<\/span><\/p>\n<h3><b>What is the best way to manage time-off requests?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">You can significantly improve how you manage employee <a href=\"https:\/\/factorialhr.com\/blog\/types-of-time-off-requests\/\" target=\"_blank\" rel=\"noopener\">time off requests<\/a> by using either <a href=\"https:\/\/factorialhr.com\/resources\" target=\"_blank\" rel=\"noopener noreferrer\">free human resources templates<\/a> or with a <a href=\"https:\/\/factorialhr.com\/holidays-leaves-software\">time off management software<\/a>. <\/span><strong>Simplify paid and unpaid time off management with Factorial.<\/strong><\/p>\n<h3><a href=\"https:\/\/factorialhr.com\/request-demo\"><img decoding=\"async\" class=\"alignnone wp-image-98430 size-full\" src=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2020\/06\/06113934\/pto-software.jpg\" alt=\"pto software\" width=\"900\" height=\"110\" srcset=\"https:\/\/factorialhr.com\/wp-content\/uploads\/2020\/06\/06113934\/pto-software.jpg 900w, https:\/\/factorialhr.com\/wp-content\/uploads\/2020\/06\/06113934\/pto-software-300x37.jpg 300w, https:\/\/factorialhr.com\/wp-content\/uploads\/2020\/06\/06113934\/pto-software-768x94.jpg 768w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><\/a><\/h3>\n<p><i>Written by <\/i>Cat Symonds.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Unpaid time off can be tough to manage. It includes any absence from work not covered by existing employee benefits such as sick leave, paid vacations, and paid time off. Although outside of FMLA, there is not necessarily any legal obligation to agree to unpaid leave, many companies offer a leave of absence in the<a href=\"https:\/\/factorialhr.com\/blog\/unpaid-time-off\/\" class=\"read-more\"> [&#8230;]<\/a><\/p>\n","protected":false},"author":136,"featured_media":20792,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[146],"tags":[],"class_list":["post-20779","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal-hr"],"acf":{"topics":"time-time-off"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.5 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Employee Unpaid Time Off: Tips, Facts &amp; Legal Obligations<\/title>\n<meta name=\"description\" content=\"Want to know more about unpaid time off? 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