What Is Unpaid Time Off?

Unpaid time off (UTO) is the time an employee spends away from work without being compensated for it. Employees can request unpaid time off work if they want to take a vacation, they’re sick or have any other personal reasons. Other reasons may be as follows:

  • For a medical appointment
  • To take care of a dependant
  • In case a closed one passes
  • To be on a career break
  • To carry out services like jury service
  • In case an employee shifts their home  
  • For voluntary work
  • Recovering from an illness 

Establishing a UTO Policy

Some companies have unpaid time off instead of or in addition to paid time off. In the former case, companies are not legally bound to pay for the leave taken. However, it is up to employers to decide whether the leave will be paid or unpaid. Having a UTO policy can help in such cases. An unpaid time off policy clearly outlines guidelines for requesting time off. It details when employees can request unpaid time off, what the process is, and if there is a limit to how many days employees can request time off. 

What to Include in UTO Policy?

  • Mention whether full-time or half-time employees can avail this leave.
  • What procedure should your employees follow to avail themselves of the unpaid leave?
  • The number of days they can avail UTO for.
  • How your employees’ time off will be tracked.

Rules for UTO

Before offering unpaid leaves to the employees it is important to understand the legal obligations surrounding it. 

  • In the United States, paid time off is a benefit linked to tenure while UTO in certain cases needs to be provided due to federal laws. 
  • The federal law requires employers to give unpaid time off on designated holidays such as Memorial Day or New Year’s. 
  • Employees who attend jury duty have to be given unpaid leaves. Some states such as Massachusetts, Nebraska, and New York require employers to give paid time off in this case. 
  • The Family and Medical Leave Act state that employers with more than 50 employees should give unpaid leaves.

Technology has graced employers with various ways they can manage their employees’ unpaid or paid time off. Using software that is meant for this purpose can make things easier for you. Consider using software like AttendanceBot that simplifies the process of creating and approving leaves, along with keeping track of employees’ time off.