How Do I Manage Payroll During Extended Leave?

Navigating payroll when employees are on extended leave, such as FMLA or maternity leave, can be challenging for employers. Understanding key responsibilities and compliance steps is important, especially for businesses required to follow the Family and Medical Leave Act (FMLA). For employers with 50 or more employees within a 75-mile radius, FMLA mandates that employees on approved leave have a job or an equivalent position to return to. Smaller businesses aren’t legally required to hold positions open but may choose to provide similar support.

Health insurance and other deductions add more complexity. Employers must decide how to handle contributions during the leave period, with options like upfront payments, reimbursement plans, or covering premiums temporarily. Proper documentation of these arrangements is essential, as they affect payroll records and taxable income. Employers should also track FMLA documentation carefully to ensure they can protect their privacy and so that records are complete according to HIPAA guidelines.

Payroll management during extended leave involves attention to both federal and state rules. For any questions, please don’t hesitate to reach out to our team. Let us help with keeping your payroll compliance accurate so that you can focus on the success of your business.