Ask the Experts: Unpaid Time Off, Background Checks & Employment Laws

On Aug 13, 2024

If an employee runs out of paid time off, do we have to allow them to take unpaid time off? It depends on why your employee needs the unpaid time off and what you’ve done in the past.

In some situations, such as those that would be covered by the Family and Medical Leave Act, Americans with Disabilities Act, Pregnant Workers Fairness Act, or a similar state law, the employee may be legally entitled to unpaid leave. In those cases, you would need to approve the unpaid leave at least to the extent required by the applicable laws.

In the absence of any legal requirements, if you’ve historically granted similarly situated employees unpaid time off, you should continue to do so. Inconsistency can lead to discrimination claims. (You can make a permanent change in policy and stop granting unpaid time off when it’s not required by law, but that’s the kind of policy shift you’d want to share widely, and if possible, with some advance notice.) If neither of the above situations apply, you could deny a request for unpaid time off, but be sure to let the employee know why. People appreciate transparency, especially when being told “no.”

Do we have to get permission to run a background check? You certainly do! The Fair Credit Reporting Act (FCRA) requires you to get permission from an applicant or employee before conducting a background check. It also has specific notice requirements, such as providing the applicant or employee with a summary of their FCRA rights and the appropriate adverse action letters if you decide not to hire them or terminate their employment because of the background check. Many state laws also have background check requirements.

Legal requirements aside, telling applicants what to expect as part of the selection process is considered professional courtesy, especially if you’ll conduct background checks or any other kind of screening that digs into history that may not be directly related to the work they will be doing.

Do we need to tell employees when employment laws change? Possibly. As the employer, you need to stay up to date on legal changes that affect your organization, and your leadership team, managers, human resources, and payroll departments should be kept aware of any new legal requirements or rights that will apply to them or their employees.

On the other hand, non-managerial employees only need to be informed about changes to the law when notice is legally required. If there’s no requirement, whether to update employees is up to you. Still, making employees aware of their rights is usually best practice. If they’re aware of what they’re entitled to, they’ll often keep their manager or employer honest by demanding it, which could ultimately save you from a lawsuit down the road.

Finally, if a change in the law impacts your policies, be sure to update your handbook and have your employees sign off on it. More widespread understanding of the new law will help foster compliance, and employee signatures will help show that they were made aware of the policy change and any new rights or responsibilities.

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