The Importance of Paid Leave Policies for Remote Workers

Managing a remote workforce has many benefits for employers. It allows them to hire the best global talent and save on overhead costs. The latter is often one of the main reasons employers switch to a fully remote model.

While saving on costs is an understandable priority for businesses, offering paid leave policies is another aspect remote employers should consider.

It may seem like an unnecessary expense initially. However, research shows that these policies will pay off for employers.

Here is what you should know about paid leave policies if you are wondering whether you should offer sick paid leave or parental leave to your employees.

What is paid leave?

Paid leave is when employees take time off work, while still being compensated for it. Whether or not the employee is eligible for paid time off depends on the labor law in the country. In some countries, the decision on paid leave is left to the employer’s discretion.

The laws on paid leave become blurry if the team is fully remote, so finding the right amount of paid leave can be tricky for employers. But, many remote employees also decide to power through on sick days while working from home. The recent survey showed that two-thirds of Americans worked while sick, simply because they were working from home.

Employers should set up policies around paid leave for remote employees, as it will allow more transparency in the company. It will also set up procedures for mandatory paid leave if there are any.

What types of paid leave are there?

Depending on their home country, your employees may be entitled to different types of leaves under their labor laws. For example, your employees may be eligible for:

1. Sick leave

2. Marriage leave

3. Maternity, paternity, or parental leave

4. Annual leave

5. Bereavement leave

When hiring a global remote team employers should get familiar with the types of leaves available to the employees in their home country. Some countries have mandatory paid leaves written in their labor law you need to meet to maintain compliance.

Paid leave and time off are one of the reasons why companies looking to hire global employees partner with an EOR. These organizations have the experience and expertise needed to navigate different labor laws and policies surrounding your global team.

Is paid leave mandatory?

Whether paid leave is mandatory or not depends on the country. Some countries mandate paid time off by law. Others leave time off benefits to the employers’ discretion.

For example, many European countries mandate paid sick leave for employees. Canada also mandated paid time off, as well as some of the states in the US. However, the specific terms of paid sick leave vary among states.

Employers should get familiar with some specific terms regarding sick leave. These may revolve around accrual rates, eligibility criteria, and a mandatory number of days. This will be helpful when navigating labor laws.

On the other hand, paid sick leave is not as prevalent or regulated in less developed countries. These workers may not have access to paid sick leave or limited opportunities for paid time off.

What are the benefits of offering paid leave for an employer?

While it may seem counterintuitive to pay your employees while they are not working, paid leave comes with many benefits for the employer. It improves employment and retention rates, morale, and productivity. Let’s get into the details.

1. Improved employment rates

Hiring a remote team globally also means competing with other companies for the best talent. Paid time off work could be one of the perks you may offer in your job position to make your company more appealing to the top talent.

For example, 70% of remote workers consider unlimited paid time off as one of the best job perks. However, only 4% of employers offer it. It could be the reason why your job post stands out among others.

If you, as an employer, worry that unlimited time off will be abused, it’s good to know that the managers still need to approve time off requests. Also, recent research shows that employees who have the option of unlimited time off use it much less than they would if they had a limited time off available.

2. Improved retention rates

It is well known that not being able to take time off from work for medical or family reasons creates a lot of stress for the employees. Research shows that new mothers who are offered paid time off to spend with their babies are more likely to return to the office than the ones who don’t.

Allowing employees to take time off and recover from an illness, spend time with their loved ones on a vacation, or enjoy a new family may seem expensive. However, when compared to the hiring costs of a new employee and training them, it is a much cheaper option.

3. Improved employee morale

Employees’ morale is highly susceptible to different factors. Some employees leave because they feel they are not compensated well, or because they are in disagreement with their managers. However, one of the main causes for leaving the company is work-life balance.

Employers expecting sick employees to show up for work even when working remotely shows that companies don’t appreciate them. It shows they may be worried about losing their job, or other repercussions of taking sick time off. It speaks volumes of company culture and employee appreciation, not only to the employee in question but to the whole team.

Where some companies focus on team building activities or creating an inclusive workplace, offering your employees paid time off when they are sick will have a more positive impact on their morale.

How does leave management differ for remote teams?

Leave management, especially in large companies, can be tricky even with an in-house team. With an in-house team, an empty chair helps with remembering someone is on leave. It is slightly more complex when managing leaves for your remote employees.

Managing leave requirements

As mentioned above, different countries have different minimum leave requirements. While in some countries each employee is entitled to at least 30 days of paid annual leave, in others employees get only five days.

When writing your paid leave policies, you must meet legal requirements. It is one of the essential aspects of maintaining compliance.

Ensuring cross-team fairness

From another perspective, meeting statutory requirements might not be enough when managing global remote teams. Your company needs to establish a strong balance between different statutory requirements to promote equality and fairness. Consider both longer and shorter requirements when crafting your paid leave policy.

Tips for effective leave management of remote teams

Apart from being mindful of what the different labor laws state, there are additional considerations when managing remote employees’ time off. Here are some effective ways to make leave management as simple as possible:

1. Set up a detailed leave policy

Cultural differences may affect how your employees see their time off. With a diverse workforce, inclusivity is the key, so it is important to craft a leave policy that everyone can follow when requesting time off.

Your leave policy should outline the procedures for leave requests, approval, and other leave management requirements.

At least, it should outline how far in advance your employees must submit their requests. It should also include circumstances under which requests may be denied. Make sure to note all the considerations employees should go through before requesting leave.

Since the laws and regulations differ, employers should note in their leave policies whether the company strategy allows only statutory time off, or it follows the idea of universal leave entitlement. The latter allows the same number of paid days off for all employees.

The more detailed the policy, the easier leave management will be. A detailed leave policy will streamline the time off procedures as all of your remote employees know which procedures to follow.

2. Use leave management software

When operating a fully remote business, relying on adequate software can be a key to a successful business. Many leave management software is available online, and it can help you stay informed and on top of time off requests.

3. Create an OOO guideline for employees

With remote work and asynchronous communication, it is important to set guidelines for employees to let the whole team know about their time off. Sending an email to their manager may be a required process, but it leaves the information in the hands of the manager.

The rest of the team should be informed as well. This can help with project planning, knowing who to contact, and avoiding a backlog of tasks on a project.

For example, you may instruct your employees to set up automatic mail replies that notify the senders that the person is on leave until a specified date. Most remote teams also use online communication apps, so they may be instructed to update their status there.

4. Create a company-wide PTO calendar

Some remote companies opt to create a company-wide calendar. This allows employees to mark the dates they will be unavailable, keeping everyone informed. This centralized calendar will help with project planning and prioritization.

5. Include different public holidays

Another important aspect of creating an inclusive workplace is to ensure the company respects the employees’ public holidays. Different countries have different public holidays, and it is a good idea to include them in the company’s PTO calendar.

This shows employees they are appreciated, provides them with time off to spend with their families, and maintains compliance with local laws and regulations.

FAQ

Do remote workers get paid time off?

Whether or not your remote team is eligible for the paid time off depends on both the country they come from and the company policy. Some countries mandate that remote employees have the same rights as in-house employees, while others don’t. Make sure to check the local labor laws to find out whether you are eligible for paid time off.

Does FMLA cover remote workers?

Whether the FMLA covers remote workers depends on where they live. If the employee lives within 75 miles or more from the employer’s office, they are covered under the FMLA. However, the employer must also have at least 50 employees working within the 75 miles.

Can I use sick leave if I am fully remote?

Whether you can use sick leave depends on your employer and labor laws in your home country or state. Make sure to inform yourself of relevant laws to see whether or not you are eligible for sick days under labor law.