Sabbaticals have been traditionally used in the academic setting to give university teachers one year of paid leave to study or travel for every seven years worked. Now some private, nonacademic employers—particularly in the “new economy”—are grabbing onto the idea as yet another creative perk for employees.
Employers are increasingly implementing leave programs that they call sabbaticals. These programs often allow for shorter periods of leave, i.e., less than a year, but allow eligible employees to use the leaves more frequently than traditional sabbatical programs.
More significantly, employers often provide sabbatical leave without any requirement that the employee have any particular purpose or account for the time spent on leave. This creates a big risk for employers: It can render a sabbatical program indistinguishable from paid vacation, prompting claims for payment of unused sabbatical leave at termination. See Paton v Advanced Micro Devices, Inc. (2011) 197 CA4th 1505, 1515.
Employers who want to offer sabbatical leave and not be on the hook for vacation payout need to consider to following 4 factors that distinguish sabbatical leave from vacation leave, as discussed in Paton:
- Sabbaticals are granted infrequently to retain experienced employees, typically every 7 years, although a greater or lesser period may be appropriate depending on the employer or industry;
- Sabbaticals are longer than a typical vacation;
- Sabbaticals must be in addition to the regular vacation entitlement offered by the employer, which entitlement may be judged against the average vacation benefit offered in the relevant market; and
- Sabbaticals include a feature showing that employees are expected to return to work for the employer after the sabbatical ends.
California’s Department of Labor Standards Enforcement incorporates these four factors into its Enforcement Manual but suggests a presumption that sabbatical leave programs will generally qualify as vacation under California law. See DLSE Enforcement Manual §15.1.13 (“Under limited circumstances sabbatical leave programs, which are in addition to the normal vacation available to an individual, will not be considered vacation subject to [Lab C §227.3]”).
Because sabbatical programs typically offer extended periods of leave—often to more highly compensated upper-level employees—a determination that a program doesn’t meet the requirements of this 4-factor test can prove very costly.
That’s why it’s so important that employers with sabbatical leave programs carefully review the 4-factor test and develop clearly worded written policies delineating applicable requirements or restrictions.
For suggestions on what to include in a sabbatical leave policy, as well as the implications of it being considered vacation leave, turn to CEB’s Employee Leave Laws: Compliance and Litigation, chap 3.
Other CEBblog™ posts you may find useful:
- Give Paid Time Off or Sick and Vacation Leave?
- Get Your Vacation Policy Right, and Then Relax!
- Employee Leave Law F.A.Q.s
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