Leave of absence policies are essential, but even the best-written policies often leave employees confused. A common misconception is that issuing a handbook or sending a notice is enough. In reality, most employees do not fully understand their leave rights or responsibilities, leading to frustration, delayed paperwork, and compliance risks for employers.

Where the Communication Breaks Down

• Legal Language: Required notices are filled with technical terms and compliance language. While necessary, they aren’t always easy to understand.

• Timing: Information is often given at a stressful time — right when employees are dealing with a medical issue, family emergency, or new child.

• One-Size-Fits-All Policies: Standard policies don’t always cover unique situations like overlapping FMLA and ADA rights, state-specific leaves, or company-offered benefits.

Why It Matters

When employees don’t understand their leave, it leads to:

• Incomplete or delayed paperwork

• Missed deadlines that could impact job protection

• Misuse of leave time

• Inconsistent application for all employees

• Decreased trust in HR and management

• Higher risk of legal disputes

How Employers Can Improve Leave Communication

• Simplify Explanations: Pair legal notices with a clear, plain-language guide that outlines what the employee needs to do and what to expect.

• Provide a Step-by-Step Timeline: Visual timelines or simple checklists can make the process feel more manageable.

• Offer a Point of Contact: Assign a consistent person employees can call or email for questions — not just a generic inbox or helpline.

• Train Managers Carefully: Frontline managers are often the first to hear about a leave request. Training them to direct employees properly is essential.

• Check for Understanding: Encourage employees to ask questions and confirm key details in writing.

Clear, consistent communication creates smoother leave experiences for both employees and businesses — reducing risk and strengthening trust.

Leave management often gets treated as a back-office task — until something goes wrong. Mishandling a leave request can cost far more than most businesses realize, even if a lawsuit never happens.  According to the Equal Employment Opportunity Commission (EEOC) and other employment law sources like Fisher Phillips LLP and SHRM, the average settlement cost for FMLA lawsuits tends to fall around $90,000 when cases are settled early - and much high if they go to trial. A 2017 study cited by Business Management Daily said that companies lose on average $78,000 per lawsuit when mishandling FMLA claims.  

Even if a business could absorb a $78,000 to $90,000 settlement, the impact doesn't stop there. There are several hits a company can take beyond just financial when leave claims are mishandled that are not always so apparent. 

The Hidden Costs of Poor Leave Management

• Productivity Loss: Mismanaged leave often leads to unclear return dates or unexpected absences, disrupting workflow and team productivity.

• Employee Turnover: Employees who feel unsupported during leave are more likely to resign, creating costly turnover and rehiring expenses.

• Compliance Penalties: Failure to meet FMLA, ADA, or state leave requirements can trigger audits, fines, and legal fees.

• Reputation Damage: Word travels fast — both internally and externally. Poor leave handling can hurt employer branding and make it harder to attract talent.

• Managerial Burnout: Managers left to “figure it out” without proper leave guidance face frustration and increased workload, leading to burnout.

Common Missteps That Lead to Costly Outcomes

• Ignoring or delaying responses to leave requests

• Inconsistent application of leave policies across departments

• Poor documentation or missing required notices

• Mishandling return-to-work transitions

• Overlooking obligations under ADA when FMLA ends

How to Protect the Business

• Establish Clear Procedures: Set up a consistent process for intake, tracking, and follow-up.

• Document Everything: From initial requests to final return-to-work confirmations, keep clear records.

• Stay Educated: Laws change, and multi-state operations add layers of complexity. Regular training and updates are essential.

• Centralize Leave Management: Centralized processes (even when outsourced) help ensure consistency and compliance.

Preventing missteps in leave management saves more than time — it protects the company’s resources, reputation, and long-term success.

Staying compliant with leave of absence laws has never been more challenging. What once felt like a stable set of rules has turned into a constantly shifting landscape. From new federal protections like the Pregnant Workers Fairness Act (PWFA) to expanded state-specific leave programs, the expectations placed on employers are growing — and so are the risks of falling behind.

For many businesses, especially small to mid-sized companies without in-house counsel, keeping up can seem overwhelming. Yet the consequences of non-compliance — fines, lawsuits, and damaged employee trust — make it critical to stay informed and proactive.

The Fast Pace of Change

Recent years have seen a wave of new leave-related legislation. At the federal level, the Pregnant Workers Fairness Act (effective June 2023) requires covered employers to provide reasonable accommodations for pregnancy, childbirth, and related medical conditions. This marks a major shift by extending protections that go beyond the Family and Medical Leave Act (FMLA).

Meanwhile, the PUMP Act now mandates that employers provide reasonable break time and private spaces for nursing employees, expanding rights that previously applied only to certain sectors. These laws build on an already complex framework of federal and state requirements, adding new layers of obligations for businesses of all sizes.

State legislatures have been equally active. Programs like Colorado’s FAMLI, Oregon Paid Leave, and Maryland’s Family and Medical Leave Insurance create new benefits with their own notice, eligibility, and administration rules. Even employers operating in a single state may find that rapidly evolving state laws require updates to leave policies and employee communications.

In a world where remote work is common, these challenges multiply. Employees working in different states bring a patchwork of laws into play, meaning a one-size-fits-all leave policy may no longer be enough.

Why Smaller Businesses Are at Greater Risk

Large companies often have internal legal teams or outside counsel on retainer, but small and mid-sized businesses usually don’t. Without dedicated resources, it’s easy to overlook small but significant legal changes. Relying on outdated policies or assuming previous practices are still compliant can expose businesses to audits, penalties, and employee claims.

Missteps are rarely isolated to legal risks alone. Confusion around leave can hurt morale, erode trust, and make it harder to retain employees — outcomes that are particularly painful for smaller organizations with tight margins and lean teams.

Staying Ahead Without a Legal Team

Fortunately, staying ahead doesn’t have to require a full legal department. A few key strategies can help businesses remain compliant and protect their operations:

First, subscribe to reliable compliance updates. Government agencies like the U.S. Department of Labor (DOL) and the Equal Employment Opportunity Commission (EEOC) provide regular updates, and reputable employment law firms often share free alerts and newsletters summarizing changes.

Second, conduct regular policy reviews. Leave policies and procedures should be reviewed at least annually — and more often when major new laws are enacted. Even simple updates, like adding references to the PWFA or new state leave programs, can help maintain compliance and demonstrate good faith efforts if questions arise.

Training is equally important. Managers and HR personnel should be regularly trained not only on the basics of FMLA and ADA, but also on how to spot evolving obligations, like pregnancy accommodations or new parental leave requirements. Since managers are often the first point of contact for leave requests, their knowledge can make the difference between smooth handling and costly mistakes.

Finally, partnering with leave management professionals can provide the expertise of a legal team without the overhead. External specialists can offer compliant processes, stay on top of legal updates, and support consistent handling of leave cases — a critical safeguard for businesses that want to focus on operations without sacrificing compliance.

Proactive Steps Make a Difference

The leave landscape will only continue to evolve. Businesses that stay proactive — keeping policies updated, educating teams, and seeking expert support — will be best positioned to adapt. Even without a dedicated legal team, it’s possible to stay ahead of changing laws, reduce risk, and maintain a workplace where employees feel supported and protected.