Employment Leave Decision Tree for Employers: A Yes/No Guide to Managing Employee Absences

When an employee goes on leave, employers often face multiple decision points—each with compliance requirements and benefits implications. This guide is structured as a yes/no, if–then reference to help you navigate those situations clearly and consistently.

Step 1: Determine “Will the Employee Be Returning?”

If YES (e.g., maternity leave, surgery recovery, other temporary leave)

  • Do you have Short-Term Disability (STD) or Long-Term Disability (LTD) coverage?

    • YES:

      • Provide the STD claim packet.

      • Discuss internal leave policies and the impact on benefits.

    • NO:

      • Treat as unpaid leave (no disability coverage).

      • If FMLA-eligible company: Review leave timelines, internal policies, and benefits impact.

      • If Non-FMLA-eligible company: Discuss internal leave policy and benefits impact.

If UNSURE (no clear return-to-work date)

  • Do you have STD/LTD coverage?

    • YES:

      • Provide the STD claim packet and discuss internal leave policies and benefits impact.

      • If leave extends past STD with no expected return date:

        • Transition to LTD.

        • Terminate benefits.

        • Provide COBRA paperwork and life insurance portability/conversion options.

    • NO:

      • If FMLA-eligible company:

        • Once FMLA is exhausted and no return date is set, employment should be terminated.

        • Provide COBRA paperwork and life insurance portability/conversion options.

      • If Non-FMLA-eligible company:

        • Terminate benefits.

        • Provide COBRA paperwork and life insurance portability/conversion options.

Step 2: Filing a Short-Term Disability Claim

  • Paperwork can be submitted up to 30 days in advance of a planned leave.

  • Claim form includes:

    1. Employer statement

    2. Employee statement

    3. Attending physician statement

  • Employer and employee complete their sections first.

  • Physician completes and submits the full claim to the insurance carrier.

  • Accurate, timely completion of all parts avoids processing delays.

Step 3: Consider State-Specific Paid Leave Laws

If your employee is in a Paid Family Leave (PFL) or Paid Family and Medical Leave (PFML) state, you must follow that state’s laws. This currently applies to:

California, Colorado, Connecticut, Delaware, Washington, D.C., Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington

Step 4: Understanding FMLA Eligibility

  • Applies to employers with 50+ employees.

  • Provides up to 12 weeks of unpaid, job-protected leave per year.

  • Benefits must be maintained during leave.

  • Employee eligibility requires:

    • 12 months of employment, and

    • At least 1,250 hours worked in the past 12 months.

Step 5: Premium Collection During Leave

  • Have a written agreement on how benefit premiums will be handled during leave.

  • Document the arrangement in the employee handbook to ensure consistency.

Step 6: When to Terminate Benefits

  • If an employee transitions to LTD and has no return date, and FMLA is exhausted (if applicable), termination is generally appropriate.

  • If an employee is working fewer than 30 hours per week, reassess benefit eligibility.

Step 7: Paying for COBRA Coverage

If you decide to pay COBRA premiums as part of a severance package:

  • Notify your COBRA Third Party Administrator (TPA).

  • Document the arrangement internally.

  • Ensure the TPA processes payments to avoid unintended coverage termination.

Consult your legal counsel or utilize your Mineral account for unique situations.

Alyssa Johnson