Paid and Unpaid Leave: What You Need to Know (And How You Can Be Protected Without It)
Benefit packages can be confusing to understand, and – it’s sad but true – many times are forgotten the minute the onboarding paperwork is signed. Unfortunately that leaves many employees not fully understanding their benefits package, and one area of frequent confusion is what their “paid” and “unpaid” leave options are. Not being clear on what you can collect can either lead you not to take advantage of benefits you are due, or could lull you into thinking you are going to get paid more than you actually are.
Let’s break down the difference and share some insight into figuring out how you can make sure you have access to these important benefits.
Getting paid when you’re not working? Sounds like a dream, right? In actuality, though, it’s a benefit that you earn through your service. At most workplaces, you are probably most familiar with paid leave as it applies to major holidays, vacation time, sick time, etc. In some cases, you let your HR department know how you are using your paid leave (“I’m sick!”), and in other cases, it’s all lumped together as “Paid Time Off” that you use at your discretion (“I’m sick of work!”)
But paid leave is also a benefit that allows workers to take part of their pay while you take more of an extended time away from work. This comes into play when you are dealing with a serious health condition — one that needs either inpatient care or ongoing treatment from a provider (including pregnancy) — caring for a family member with a serious health condition or caring for a newborn or newly adopted child or new foster child.
Paid leave is also offered to military personnel, under the Uniformed Services Employment and Reemployment Rights Act (USERRA) if your military compensation is less than what you would be being paid at your company.
Note that only a few states have laws requiring paid leave for various circumstances. And while many companies have their own, more generous policies, the benefit is not as widespread as you might imagine: The National Partnership for Women and Families, a non-profit, non-partisan advocacy group, estimates that only 17 percent of workers in the United States have access to paid family leave through their employers.
This is just what it sounds like – leave that is unpaid, but is designed to protect your job (and status and benefits) so you don’t have to quit in the event you need time off for a health situation.
The most well-known source of unpaid time off is the Family and Medical Leave Act (FMLA), which offers 12 weeks of unpaid leave to care for newborns or seriously ill family members for employees who have worked at least 1,250 hours in the prior year for a company that has 50 or more employees. Typically you will exhaust your paid leave first and then you can begin collecting these benefits.
Some military leave, such as deploying with the National Guard, also typically qualifies as unpaid leave.
Remember that companies may offer an extended unpaid leave of absence or other time off that may protect your job even above and beyond what they have to by law. It’s vital to talk to your HR department and get all the particulars in writing before taking leave.
How Disability Policies Can Keep Your Paycheck Intact
Whether or not your state or company offers ample paid leave, disability insurance (or, as we like to call it, “income insurance”) is a smart addition to your benefits package. Although fewer than 40 percent have access to personal medical leave through short-term disability insurance that is provided by their employer, most workplaces offer you the option of purchasing more. It’s a decision that can save your finances should the unexpected happen.
Check into both short-term policies, which typically run from 13 to 26 weeks, and long-term policies, which kick in when you have exhausted your short-term benefits. These policies cover a percentage of your pay up to your full pay depending on their conditions.
While most workers believe they will never need disability insurance, statistics show that nearly one-quarter of the 20-year-olds in today’s workforce will miss at least a year of work due to a health condition before they reach retirement age.
Disability coverage is an important benefit every worker should be well aware of to augment your existing paid and unpaid leave.