Leave of Absence Management Strategies for HR Professionals

A leave of absence is an approved, extended period away from work that allows an employee to take time off without changing their employment status. Managing that process well means balancing employee support, business continuity, and compliance with federal, state, and local requirements. And the need is growing: 57% of organizations reported that more workers requested extended time off in 2024, with illness, injury, and mental health among the most common reasons, according to data from AbsenceSoft. For HR teams, the challenge is creating a process that employees can understand, managers can follow, and the organization can apply consistently.

What are the types of leave of absence?

Leaves of absence fall into two categories: mandatory and voluntary. What distinguishes them from one another is whether the leave is required by law or offered at the employer’s discretion. Mandatory leaves typically include family, medical, or military leave, while voluntary leaves may cover personal time off, sabbaticals, or educational opportunities.

• Mandatory leave — This type of leave is governed by local, state, or federal laws like the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA). Employees don’t typically choose whether mandatory leave applies; eligibility depends on the situation and the applicable law. Examples may include military service, jury duty, disciplinary leave, short-term disability, administrative leave, and maternity or parental leave covered under the FMLA. Some states have also introduced paid family leave programs, increasing complexity for multi-state employers.
• Voluntary leave — This type of leave is taken at the employee’s discretion and often with employer approval. Employers aren’t legally required to provide voluntary leave, and employees aren’t required to take it, although it can support morale and retention when handled consistently. Criteria for voluntary leave should be set in an employer’s leave management policy. Examples of voluntary leave include medical leave, mental health leave, bereavement leave, educational leave, and sabbaticals. Mental health is a major factor in workplace absence: depression and anxiety account for about 12 billion lost working days each year, according to the World Health Organization.

Are leaves of absence paid or unpaid?

Leaves of absence are typically unpaid, but it’s ultimately up to the employer and any applicable laws. Employers should confirm whether any federal, state, or local requirements affect pay during leave. Some organizations require employees to use remaining paid leave first, such as sick days or PTO. Occasionally, an employer may place an employee on paid leave during an investigation. Accurate tracking of paid and unpaid leave helps HR coordinate payroll, benefits, and budgeting without creating downstream errors.

How do you build a leave of absence policy?

A leave of absence policy gives HR, managers, and employees a shared framework for requesting, approving, documenting, and returning from leave. It should explain which leave types are available, how eligibility is determined, what documentation is required, and how leave affects pay, benefits, and job status. Technology can support that policy, but the policy itself should define the rules your organization follows. If you’re evaluating software specifically, see OSV’s companion guide to leave management systems.

Here are some guidelines for building a leave of absence policy tailored to your organization’s needs:

1. Research your area’s laws and requirements — Compliance with local, state, and federal labor regulations is one of the most important responsibilities in leave of absence management. Because the rules change often, HR teams need a reliable process for monitoring requirements and updating policies when needed.
2. Establish clear policies — When you define the rules for taking leave, you create a level playing field for all your employees, ensuring they’re treated equally and in accordance with the law. This process covers the types of leave, eligibility rules, approval steps, and compensation (if applicable). Documenting the reason for leave is particularly important for managing leaves of absence.
3. Use technology — Manual HR processes are easy targets for errors and can pull your team away from higher-value work. Automated leave tools can make leave of absence management more accurate by tracking requests, balances, approvals, documents, and status changes in one place. They can also help HR share absence data with payroll and benefits teams, giving everyone a clearer view of leave activity and reducing the risk of missed updates. Some platforms also offer reporting that helps HR teams spot leave patterns and plan coverage in advance.
4. Work with an experienced leave administration partner — Outsourcing can help when leave administration has become too complex or time-consuming to manage in-house. A partner can support eligibility reviews, documentation, employee communication, case updates, and return-to-work coordination while helping your team stay aligned with applicable requirements. For Workday customers, OneSource Virtual (OSV) supports leave administration through a dedicated leave platform connected to Workday. Depending on the contracted scope, OSV can determine eligibility, manage case updates, coordinate concurrent leaves, review return-to-work documentation, and store leave certifications and return-to-work documents in Workday Worker Documents.
5. Communicate proactively — One of the most important ways to earn employee trust is to put your organization’s leave policies in writing and include them in your employee handbook or HR portal. A clearly communicated leave policy can help employees understand what to expect, reduce confusion during stressful moments, and support a more consistent experience across the organization.
6. Regularly review your policies — Leave policies should evolve as your workforce, locations, and legal obligations change. Reporting can show whether employees are using available leave, which leave types are most common, and where the process may need more clarity. Regular reviews help keep your policy accurate, usable, and aligned with your current business needs.

What happens when a leave of absence ends?

Depending on the terms of an employer’s leave of absence policy, once an employee returns to work, the employer can either return them to their former position or transfer them to an equivalent role. It’s best to seek legal advice to confirm that any regulations related to the employee’s leave are followed.

Returning to work can be stressful for both employees and employers. The decision to take leave may have been difficult for the employee, especially when 64% of workers report stress, anxiety, guilt, or fear when requesting sick leave. A return-to-work plan can help the employee move back into their former role or an equivalent one with clearer expectations. Before the leave ends, consider whether the employee needs flexible hours, a phased return, regular check-ins with their manager, or referrals to available resources. Clear communication about timing, documentation, and next steps helps reduce uncertainty for everyone involved.

Want to learn more about leave of absence management?

Leave of absence management helps employees take the time they need while giving HR a consistent process for eligibility, documentation, communication, and return-to-work coordination. For Workday customers, OSV can add capacity through leave administration support that connects a dedicated leave platform to Workday, helping HR maintain visibility into leave activity and related documents without having to manage every case manually. To learn more, contact us or explore our leave administration services or benefits administration services.