Employee leave compliance 101 (with checklist)

Each year, 20 million Americans file for leave with the Family Medical Leave Act (FMLA), and on any given week, 5% of the workforce is taking a leave of absence. With more than 100 leave laws in the U.S., even if you master your employee leave laws in California, you’ll find that adding New York’s means starting from scratch. These intricacies become a drain on your time and open you and your company up to unnecessary risk — which is why we created this guide, and why Cocoon takes on the task of sending eligibility and designation notices.

Read on for the basics of managing compliant leaves in every state and download our FMLA leave compliance notice checklist for notices you’re required to send employees when they request leave.

Checklist: FMLA leave compliance notices

Use this checklist to keep track of notices you're required to send employees when they request leave.

The three layers of FMLA and leave compliance

To break down the complexity of leave compliance, we find it helpful to discuss in terms of the “three layers”: entitlements, commitments, and accommodations. Which are then followed by required compliance communications.

1. Leave entitlements

A leave entitlement is a law that provides job protection for a leave of absence. Job protection is a benefit where the employee has a right to keep their job if they miss work for a qualifying reason (like bonding with a child) specified under the law. 

There are leave entitlements at the federal, state, and local levels. These laws are typically clear-cut, black-and-white, and include certain employer and employee obligations. For instance, Family and Medical Leave Act (FMLA) covered employers are required to send their employees compliance notices at different points throughout their leave. 

Note that leave entitlements are different from statutory pay entitlements. A leave entitlement protects your job, while statutory pay provides partial to full salary replacement while on leave. Examples of state or local pay entitlements are SF PPLO, CA PFL, and CA SDI. There are some laws that provide both job protection and pay like Washington’s PFML. 

The graphic below illustrates many, but not all, of the state leave and pay entitlements that employers operating in multiple states might need to consider.

There are typically four main components to laws that fall under the umbrella of leave entitlements: 

1. Employer coverage requirements
2. Employee eligibility requirements
3. Qualifying leave reasons
4. Benefit-related details

Here’s what it looks like for FMLA, as an example:

Employer coverage requirements

FMLA covers your company if one of the following applies:

• Your company has employed 50 or more employees for at least 20 workweeks in the current or previous calendar year – including employees who your company jointly employs as a “joint employer”
• Your company is a successor in interest to a covered employer (described in Section 825.107 of the FMLA regulations)

Employee eligibility requirements

Employees of covered employers are eligible to take leave under FMLA if they:

• Have worked for your company for at least 12 months. The 12 months of employment are not required to be consecutive and the look-back period is generally 7 years from the date an employee seeks leave (or longer if breaks in service were due to active military service);
• Have worked at least 1,250 hours during the 12 months leading up to the start of leave; (special hours of service rules apply to airline flight crew members); and
• Are employed at a location where your company employs 50 or more employees within 75 miles of the employee’s worksite

Qualifying leave reasons

Covered employers must grant eligible employees up to 12 workweeks of unpaid, job-protected leave in a 12-month period for one or more of the following reasons:

• The birth of a child, and to bond with the newborn child;
• The placement of a child for adoption or foster care, and to bond with that child;
• To care for an immediate family member (spouse, child, or parent – but not a parent “in-law”) with a serious health condition;
• To take medical leave when the employee is unable to work because of a serious health condition; or
• For qualifying reasons due to the employee’s spouse, child, or parent being on covered active duty or call to covered active duty status as a member of the National Guard, Reserves, or Regular Armed Forces.

The benefit and related details

• The Family and Medical Leave Act (FMLA) provides eligible employees up to 12 workweeks of unpaid leave a year, and requires group health benefits to be maintained during the leave as if employees continued to work instead of taking leave. Employees are also entitled to return to their same or an equivalent job at the end of their FMLA leave.
• The FMLA also provides certain military family leave entitlements. Eligible employees may take FMLA leave for specified reasons related to certain military deployments of their family members. Additionally, they may take up to 26 weeks of FMLA leave in a single 12-month period to care for a covered servicemember with a serious injury or illness.

While it’s clear from the above that FMLA includes a lot of specific details for employers to keep top of mind, the same is true for all state and local laws governing employee leave that overlap, add on to each other, and occasionally conflict.

2. Leave commitments

Leave commitments are voluntary leave policies and benefits, like an employer’s parental or medical leave policy and disability insurance. 

Like leave entitlements, employers generally impose employee eligibility criteria for leave commitments, and offer a certain amount of time and pay for a leave through their policy. Some components of a typical leave policy are:

• Qualifying reasons
• Leave time & pay
• Tenure requirements
• Covered employee types
• Permitted leave increments
• Coordination with other benefits

Keep in mind that employees covered under entitlements like FMLA or CFRA can legally take leave whether or not you have a policy in place, and regardless of how much time you offer.

3. Leave accommodations

Finally, leave accommodations typically come into play when employees seek to take medical leave but are not eligible and/or have exhausted any leave entitlements or commitments. This happens because employers may be legally obligated under the Americans with Disabilities Act to provide job-protected leave as a reasonable accommodation to employees with qualifying disabilities. 

4. Compliance notices

When an employee requests leave, there are several notices employers covered by FMLA must send to employees. These include: 

• Notices telling employees whether they are eligible under FMLA
• Their rights and responsibilities if they are eligible employees
• A designation notice telling employees whether their request for FMLA leave has been approved or denied 

Notice of Eligibility example

This notice must tell an employee whether they are an eligible employee under FMLA. As a reminder, an employee of a covered employer is eligible to take leave under FMLA if they meet all three of the criteria in the “employee eligibility requirements” list in section one above.

The notice must be executed carefully and fulfill the following:

• You must notify employees of eligibility within 5 business days either orally or in writing of the initial leave request or when you discover an employee may need leave for an FMLA-qualifying reason.
• If an employee is not an eligible employee, you must state at least one reason why they fail to meet the FMLA’s eligibility criteria. If the reason for ineligibility is the employee’s failure to satisfy FMLA’s length of service or hours of service requirements, you must also tell the employee, as applicable, the number of months the employee has been employed by the employer and/or the hours of service with the employer during the 12-month period.

Other notices required include a Notice of Rights and Responsibilities, a Designation Notice, and much more. To see all notices, download our full FMLA leave compliance notice checklist.

Don’t compromise on compliance: Cocoon’s technology codifies ever-changing federal, state, and local leave laws and automatically sends required compliance notices, eliminating human error and legal risk across geographies. 

Key takeaways

With ever-changing leave laws and variances across state lines, it can be time-intensive to ensure your organization is always compliant. 

• Leave entitlements are clearly defined laws that provide job protection for a leave of absence. 
• Leave entitlements are different from statutory pay entitlements.
• Leave commitments are voluntary; they are the time off and pay you (as the employer) commit to your employees when it comes to leave. 
• Leave accommodations are made when an employee requests a leave of absence but is not eligible and/or has exhausted any leave entitlements or commitments.
• If you are covered by FMLA or other state laws, there are certain things you are obligated to tell employees and notices you are required to send. 
• Download our compliance notice checklist to make sure your People team knows what these are—and become a Cocoon customer so we can help you.