Human Resources (HR) is an essential component of the workplace that shapes our daily professional lives. From entry-level employees to top executives and decision-makers, we all need to understand matters like leave options, benefits, and workplace policies, and how those function. Yet, the language of HR can be complex and confusing, and many terms that appear similar or even identical are in fact not. As a people-oriented team, we want to make the HR world easier to navigate for all – this is why we’ve compiled our extensive, hands-on knowledge to bring you The HR Glossary, our latest blog series where we break down the most popular HR terminology professionally and accessibly.
This edition is dedicated to distinguishing between PTO (Paid Time Off, or Paid Leave) and UTO (Unpaid Time Off, or Unpaid Leave), and covers the following terms:
- Holidays (also known as Vacation or Annual Leave)
- Maternity/Paternity Leave
- Sick Leave
- Family/Caregiver Leave
- Personal/Special Leave
- Bereavement Leave
- Study/Educational Leave
- Creative Leave
- Social Leave
What is Paid Leave?
Paid Leave, also referred to as PTO (Paid Time Off), is typically, but not necessarily, a part of an employee’s benefits package. The term refers to time off from work that an employee is entitled to while still receiving their regular salary or wages. In many countries, a minimum PTO entitlement is regulated by law, with specifics such as amount and types varying greatly.
What is Unpaid Leave?
Unpaid Leave, also referred to as UTO (Unpaid Time Off), is time off from work that an employee can take without being financially compensated for it by the employer. It is not typically included in a standard benefits package but enables employees to address personal needs or pursuits. Their job may be secured or not during this time, depending on organizational policies and local labor laws.
What are the types of Paid Leave?
Paid Holidays (also known as Vacation or Annual Leave) – a period of paid time off from work granted to employees as an opportunity to rest, recharge, and pursue personal interests. A certain number of paid leave days is typically allotted per calendar year and can be used throughout that year. However, some employers assign paid leave days based on the fiscal year or the employee’s work anniversary.
Many countries have a legally established minimum for paid annual leave, e.g. at least 20 working days within the EU (with additional days varying country to country) and at least 10 working days after the first year of employment in Canada.
Maternity/Paternity Leave – a period of paid time off from work granted to new mothers and fathers to care for their newborn or newly adopted child. During this period, employees on their maternity/paternity leave typically receive a percentage of their regular salary. This can be fully covered by a national social security system, shared between the government and the employer, or fully covered by the employer.
In many countries, female employees are allowed to begin maternity leave several weeks before expected childbirth (this is known as Prenatal Leave). The remaining portion of maternity leave is taken after the birth of the child (known as Postpartum Leave). Places like Sweden, Norway, and Iceland are known for their progressive paternity leave policies, with legally established time periods reserved for each parent and additional transferable periods.
Sick Leave – a period of paid time off from work granted to employees who are ill, need to attend medical appointments, or undergo medical procedures. The amount of paid sick leave days is often specified in national labor laws, with employees’ salaries covered by employers or national social security systems. However, in some countries sick leaves can be unpaid or paid only after a certain number of days.
A proof of illness, such as a doctor’s note or a medical certificate, is typically requested by employers in order to provide paid sick leave. For more serious and long-lasting medical issues, a comprehensive medical report may be required. The jobs of employees on extended sick leave are protected by law in many countries.
Family/Caregiver Leave – a period of paid OR unpaid time off from work granted to employees to care for a sick/dependent child, spouse, or relative. The duration of family/caregiver leave, job protection during the period of leave, and whether it is paid or unpaid varies widely across countries.
Personal/Special Leave – a period of paid OR unpaid time off from work granted to employees for personal reasons or special circumstances, such as weddings, important family events, or personal emergencies.
Bereavement Leave, which is paid OR unpaid time off after the death of a close family member, is a type of personal leave. Whether this time off is protected, fully/partially paid, or unpaid depends on local labor laws and employer policies and should be explicitly stated in employment contracts.
Are there any types of Leave for professional and personal development?
In addition to the previously mentioned types of leave for rest, recovery, parental or caregiver duties, and special family circumstances, some employers also offer the types of leave that are designed to support professional and personal development or enable employees to engage in community roles. Among these are:
Study/Educational Leave – a period of paid time off from work granted to employees to pursue education directly related to professional roles or career development. This may include training courses, degree programs, and professional certifications. For broader education pursuits, this type of leave can be granted on an unpaid basis.
Language courses outside of working hours can also count as a type of study/educational leave if the language skills are necessary for the job and the company compensates for the time and costs associated with the learning.
Creative Leave – a period of paid OR unpaid time off from work granted to employees who want to pursue innovative projects or engage in creative activities outside of their professional duties. This type of leave is more likely to be paid if its outcomes directly benefit the organization, and short-term leave is more often paid than long-term.
Companies that prioritize employee wellbeing tend to implement more flexible Creative Leave policies to promote personal growth and enhance job satisfaction among their team members.
Social Leave – a period of time off from work, granted to employees who want to engage in community service or volunteer work not directly related to their professional duties. This type of leave is typically unpaid, with the exception of companies with strong corporate social responsibility (CSR) programs.
How can Acvian help?
Are you representing an international business in need of an outsourced expansion of the in-house HR department or a completely outsourced HR team? As your EOR provider, we can take over tasks related to international HR, leaving you with more resources and headspace to focus on core business priorities. To get started, contact us via submitting your request here or scheduling an immediate meeting.
