Imagine you’re an employee who’s on leave. You’re resting at home, recovering from a hip replacement, a car accident, or a nasty bout of influenza. You check your bank account because you’re worried about the unexpected expenses coming your way. That’s when you realize: You haven’t been paid.
Simple mistakes in leave of absence pay put employees in situations like these all the time. According to our 2026 State of Leave and Accommodations report, 44% of employees reported issues or confusion with pay and benefits during leave.
For employees, a missing paycheck is more than an inconvenience. It’s the difference between paying bills on time and getting late fees. It’s an additional worry during a stressful season. It’s the loss of trust in an employer.
Leave of absence pay is something that affects employee morale and company loyalty, while also impacting compliance and leave management processes. In this article, we’ll identify the leave of absence pay mistakes to avoid and show you how to set up payment processes that you and your employees can rely on.
Why Leave of Absence Pay Gets Complicated
There’s a reason why employees on leave experience problems with their pay so frequently. It comes down to complexity. When HR needs to determine how an employee is paid during their leave of absence, they have to consider many layers of information. Company policy, insurance, state law, and federal statutes all factor in.
Let’s start with the broadest layer: the Family and Medical Leave Act (FMLA). On its own, FMLA pay calculation is easy. This federal law provides unpaid, job-protected leave. That means that employers may not need to pay employees who take FMLA leave.
In the absence of a federal paid leave law, many employers have created their own leave policies that come with a paycheck. The U.S. Department of Labor states that while the FMLA provides unpaid leave, employees can choose (and the law allows) to use accrued paid vacation leave, paid sick leave, or paid family leave for some or all of their time away.
Employers can even require employees to stack their leave this way. And when employees use paid leave for an FMLA covered reason, the leave is FMLA protected. This effort has created complex stacking scenarios for HR and leave managers to navigate.
As if that’s not enough to sort through, there’s also state paid leave coordination. Employers must also consider paid leave programs at the state level. States like California, Washington, and Massachusetts maintain their own laws that come with eligibility rules, waiting periods, wage replacement formulas, and benefit caps.
Details surrounding an employee’s leave will also factor into leave of absence pay. Short-term disability coordination may come into play if an employee has opted into such a policy and qualifies for benefits. Depending on the type of leave the employee needs, HR may have to administer intermittent leave pay. This is one of the most challenging situations, as HR must carefully track partial days against entitlements and payroll cycles.
Common Leave of Absence Pay Mistakes to Avoid
When you’re determining how much an employee should be paid while they’re on a leave of absence, there are a few common mistakes to avoid. They range from manual errors to missed deadlines. While common, most of these problems are avoidable, especially with the help of technology.
- Manual Errors
When HR teams use spreadsheets to manage leave of absence pay, small errors compound quickly. A transposed number, a missed formula update, or a miscommunication between the leave team and payroll can result in an employee receiving the wrong amount or nothing at all.
- Coordination Problems
When you’re determining an employee’s pay during their leave, you must consider how state benefits interact with company paid leave. The wrong calculation can result in overpayment or underpayment. Neither situation is ideal, since it shortchanges your organization or your employee.
- Missed Deadlines
As you consider how state laws affect wage replacement rates, remember that these statutes come with timelines too. Be sure to meet deadlines for state benefit filings, since missing one can affect the benefits employees receive.
How Leave of Absence Pay Impacts the Employee Experience
It’s all too easy to mess up an employee’s pay while they’re out on leave. Most of the time, you can correct your mistakes by issuing a late payment or adjusting a future check. Employees will appreciate your effort to make things right, but it won’t erase their frustration.
Pay issues are incredibly stressful for employees. Among employees in an AbsenceSoft survey who said they had a negative experience taking leave, nearly a third said pay mistakes were at fault. Survey respondents shared what it was like to experience pay issues while on leave:
- “My pay was miscalculated not by a small amount, but oh so large.”
- “I was not paid for three days of my leave due to miscalculation.”
You can create the opposite effect for employees by getting leave of absence pay right. When we asked employees to tell us why they had a good leave experience, “I was paid the correct amount” was the second most popular factor.
Of course, employers can go beyond minimizing errors. A supportive experience is one where employees can go on leave knowing what to expect financially. They know what they’ll be paid and when. And they should be able to come back without having to fight for what they’re owed.
Why Leave of Absence Pay Accuracy Matters Now More Than Ever
You could argue that it’s always important to get payroll right. We agree. But accuracy is harder to achieve these days. Here are a few reasons why.
First, HR is dealing with more leave requests than ever. Leave volume has increased for three years in a row, according to our 2026 report. For teams that reported increases each year, the cumulative growth could be more than 125%. That’s a lot of leave.
Despite this growth, many teams are still using manual processes to administer leave and payroll changes. Manual processes at this scale are an accident waiting to happen. One mistake can leave an employee without the pay they were expecting. Your error is their emergency. There’s no good time to have a financial crisis, but it’s especially damaging when you’re on leave recovering from surgery, healing from an accident, dealing with an illness, or bonding with a baby.
If your team is still calculating leave of absence pay the old-fashioned way, it’s worth considering what automation can do. The right tools can transform your processes, making leave of absence easier for your team and less stressful for employees.
A Better Way to Manage Leave of Absence Pay
When you use a platform like AbsenceSoft, it’s easy to calculate leave of absence pay accurately. Paying employees the right amount at the right time is foundational for a positive employee experience. By providing paychecks without errors, you’ll build trust between your organization and its employees.
If you’d like to learn more about how AbsenceSoft can support your employees, your team, and your leave management program, book a demo with one of our CLMS-certified specialists today.
FAQ on leave of absence pay
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Leave of absence pay is the process of determining how much an employee should be paid while they’re out on a leave of absence. It accounts for company policy, state paid leave programs, short-term disability benefits, and federal law like the FMLA, since FMLA itself does not require employers to pay employees during leave.
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States like California, Washington, and Massachusetts run their own paid leave programs with their own eligibility rules, waiting periods, wage replacement formulas, and benefit caps. When an employee qualifies for both a state benefit and a company-paid policy, HR typically needs to calculate the state amount first, then determine what the company should pay to fill any gap. Getting this coordination wrong can lead to overpayment or underpayment.
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The most frequent issues are manual data entry errors, tracking mishaps with intermittent leave, miscoordination between state and company-paid benefits, and missed deadlines for state benefit filings. Most of these stem from relying on spreadsheets and manual handoffs between the leave team and payroll rather than a centralized system.
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According to AbsenceSoft’s 2026 research, 44% of employees reported issues or confusion with pay and benefits during their leave. Pay mistakes were also cited as a leading cause of poor leave experiences overall.
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Moving away from manual, spreadsheet-based processes is the biggest lever. Purpose-built leave management software, like AbsenceSoft’s payroll calculations module can estimate payments using actual pay history and leave policy rules, coordinate state and company-paid benefits automatically, and generate payroll export files, all within the same case file used to manage the leave itself.
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Yes. In AbsenceSoft’s research, being paid the correct amount was the second most-cited reason employees reported a positive leave experience. Pay accuracy is one of the more controllable ways employers can build trust with employees during an already stressful time.