Everything you need to know about leave management in 2025

Effective leave management isn’t just about compliance with labor laws (though that’s one of the reasons it’s so important)—it also helps keep employees engaged and productive and plays a huge role in boosting employee satisfaction by helping them feel supported and valued. When organizations set up efficient leave management processes, they improve attendance, reduce absences, and keep overall operations running smoothly.

In this guide, we’ll outline all the essentials of staff leave management, from defining leave and explaining key policies to introducing some of the best management systems and software in 2025. We’ll also walk through how to manage different types of leave requests, make sure your organization is compliant with federal requirements and other labor laws, and align your HR strategies to your organization’s specific needs.

By outlining best practices for time off policies, this guide will help HR teams (and the employees they support) manage PTO, vacations, sick leave, FMLA leave, and more in a smarter, more structured way. Let’s dive in.

What is leave management?

Leave management refers to the management processes an organization puts in place to handle leave requests, track leave time, and make employees adhere to company policies when they take time off. 

When done correctly, leave management helps employees and HR teams navigate accruals, balances of unused leave, and approval workflows in a transparent, compliant manner. You can define leave as any authorized absence—paid leave, unpaid leave, or special categories—granted to employees who need to step away from work.

Within leave management, there are various types of leaves (also known as absences) that employees may need. Some common ones include:

PTO

Paid time off (PTO) often combines vacations, personal days, and sometimes sick leave into one bucket of paid time that employees can use at their discretion. PTO structures can vary widely; some organizations use accrual systems where employees earn more paid leave the longer they work. Others might grant a fixed number of PTO days each year.

Sick leave

Sick leave exists specifically for employees to use when they cannot work due to illness, injury, or medical appointments. Many states and other jurisdictions have labor laws that require businesses to provide their employees with sick leave. Therefore, proper management processes for sick leave typically include approval workflows and documentation to ensure compliance with both labor laws and internal policies. Some organizations incorporate sick leave into their PTO structures, while others keep it separate.

Vacation days

Many organizations define vacation days as a standalone type of paid time off work for rest or leisure. Whether vacation days are separate from PTO or combined, HR teams need clear policies so employees understand how they can request vacation, how accruals work, and what happens with any unused vacation days at the end of the year.

Parental leave

Parental leave is for new parents—mothers, fathers, and sometimes adoptive parents. It may include FMLA leave (under the Family and Medical Leave Act) if the employer is covered by federal law and the employees meet eligibility. Whether new parents have access to paid leave or unpaid leave generally depends on the organization’s policies and relevant labor laws.

Bereavement leave

Bereavement leave gives employees the ability to take time off to grieve or handle matters related to the death of a loved one. If your organization’s policies include bereavement leave, you might extend either paid time or unpaid leave for this period. Just be sure to make your bereavement policy clear—such as including it in your employee handbook, where employees can review it as needed.

Leave management process

Building and maintaining a leave management process involves several steps that help HR teams manage leave requests efficiently while staying on top of compliance. Below is a quick look at how you can set up a typical leave management process:

Step 1: Establish the scope for creating a leave management system

Determine which types of leave will be included (for example, PTO, sick leave, vacation days, FMLA leave, military leave, etc.) and outline the objectives of your leave policy. Are you focusing on reducing absences, or are you more concerned about documenting approval workflows? By clarifying the scope of the policy, the HR team can build targeted management processes that fit your organization’s policies and goals.

Step 2: Identify relevant laws and regulations

Check federal labor laws such as the Family and Medical Leave Act, as well as state or local regulations that apply to your organization and its employees based on where they live and work. If employees are entitled to certain types of paid leave or unpaid leave, make sure your company policies reflect those obligations. Compliance is critical to avoid legal risks and maintain trust with your employees.

Step 3: Create and share clear leave policies

When you define leave in your official policies and documents like your employee handbook, make sure to specify how leave requests should be submitted, what approval steps are required, how many days of PTO or vacation each person is entitled to, and whether accrual or rollover rules apply for any unused days. Communicate these details effectively so all employees know what to expect and how to handle time off requests.

Step 4: Deploy or upgrade leave management software

Consider investing in a reliable leave management system. The right tool can automate approval workflows, help HR keep track of absences, manage PTO accruals, and make sure time off requests don’t slip through the cracks. An automated approach not only saves HR time and effort, but also improves compliance and clarity around leave balances, especially when dealing with FMLA leave, military leave, or other special categories.

5 tips for efficient leave management

Optimizing leave management can help your organization reduce administrative headaches and improve employee satisfaction. Below are five tips to help you streamline your HR leave management processes:

1. Familiarize yourself with legal requirements

Understanding federal labor laws like the FMLA, Military Leave Act, and other relevant regulations is essential. Knowing which employees are entitled to FMLA leave or paid or unpaid leave helps ensure that your approval workflows and policies remain in strict compliance.

2. Align with your business’s strategies and objectives

Your leave management process should reflect your organization’s priorities. For example, if productivity spikes in certain seasons, you might consider structuring your PTO policies and approvals accordingly to avoid gaps in your workforce that affect output. This approach supports employees while meeting key business goals.

3. Develop clear leave policy guidelines

Include definitions of PTO, vacations, sick leave, parental leave, bereavement leave, and other relevant categories in your employee handbook. Outline all policies regarding accruals, unpaid leave, time off requests, and how employees can escalate issues. Having clear guidelines will reduce confusion and promote consistency.

4. Integrate leave options into standard procedures

Communicate your leave procedures across all departments so that HR, managers, and employees understand how to submit and/or approve leave requests. Using a centralized management system that integrates with payroll and attendance tracking tools can also help your team manage everything in one place.

5. Adapt leave policies for continuous improvement

Regularly review your leave management metrics (such as absences, unused leave, or leave requests that pile up) and ask employees and your HR team for feedback to make any needed changes. By communicating openly and checking whether your policies remain in line with updated labor laws or best practices, you’ll keep improving your management processes over time and make sure they stay effective in the long run.

Benefits of employee leave management

An effective leave management process delivers tangible benefits for employees and organizations, such as:

Ensures compliance with employment laws and regulations

By adhering to federal mandates like the Family and Medical Leave Act and other labor laws, you can protect your organization from lawsuits and penalties. Proper management processes also clarify which employees are entitled to FMLA leave and other types of legally mandated leave options.

Creates a uniform and consistent process across the organization

Centralizing your leave management approach reduces confusion. It helps make sure all employees know how leave requests are managed, promoting fairness and transparency. A single management system or set of policies improves consistency and confidence in HR decisions.

Increases overall employee satisfaction and retention

When employees can take time off without jumping through unorganized hoops, their well-being improves. They know that PTO, sick leave, or FMLA leave are there if they need them, increasing trust in HR and the organization as a whole.

Increases productivity and efficiency

A streamlined leave management process reduces administrative overhead and keeps HR from drowning in paperwork or manual errors. This frees them up to work on strategic initiatives and boost productivity across teams.

Challenges of employee leave management

While beneficial, leave management can also pose several challenges:

Inaccurate tracking of leave

If employees submit leave requests in scattered ways or if HR keeps track of absences manually, data can easily get lost. Inaccurate accrual counts or missed approvals are common when there’s no centralized management system.

Payroll errors and delays

If your payroll software isn’t integrated with your leave management system, issues can easily arise. For example, miscalculations of paid leave or unused vacation days can lead to delayed or incorrect payments, frustrating employees and consuming HR’s time.

Disruption within the workplace

Uncoordinated absences can put a strain on workloads. For example, if an employee takes extended medical leave without proper notice or approval, the rest of the team may be left scrambling to cover their responsibilities. That’s why consistent management processes and policies for advanced leave requests and approvals are crucial.

What is a leave management system?

A leave management system is software designed to centralize and automate the management processes for leave requests, approval workflows, accruals, and unused balances. HR professionals use these tools to keep track of how much leave each employee has and what type of leave it is. A robust management system also integrates with payroll and time and attendance tools, which allows for a seamless flow of data without manual errors.

Benefits of leave management software tools 

The right leave management system delivers multiple advantages, such as:

Eliminates paperwork

An automated tool can replace paper forms or endless spreadsheets. Employees submit leave requests digitally, and HR manages approvals in one centralized dashboard. This cuts clutter and time spent on data entry.

Removes manual interventions

By integrating with HR records, payroll, time and attendance, and scheduling systems, modern leave management systems reduce human error and busywork. Approvals are routed automatically, and accrual balances update in real time.

Improves communication

A leave effective management system helps everyone communicate more efficiently. Employees can often self-serve to see their own leave balance, managers get notifications for leave requests, and other features that keep everyone informed and in the loop. HR also has full visibility into leave statuses.

Offers real-time visibility of data

Real-time dashboards allow HR and other managers and stakeholders to see who’s taking time off and when. This allows for better resource planning, prevents scheduling conflicts, and keeps absences from derailing projects.

Best leave management software

Looking for the software to manage leave requests and accruals for your employees? Here are four top contenders you might want to consider:

1. Rippling 

Rippling is an all-in-one HR platform that simplifies and automates leave management processes, payroll, time off requests, and other aspects of human capital management (HCM). It automatically tracks different leave categories, such as PTO, sick leave, FMLA leave, and more. Key features include automated approvals, real-time analytics, and robust policy customization.

2. Gusto

Gusto is aimed at small to mid-sized organizations looking for an easy-to-use management system that integrates leave tracking and payroll. It supports accruals and direct communication with employees through a unified dashboard.

3. Bamboo HR

BambooHR offers a suite of HR tools to manage leave requests, track PTO accrual, and manage compliance with FMLA and other labor laws. It integrates with modules like recruiting and performance management, but for companies looking for an all-in-one HR tool, essential features like payroll have to be added on.

4. Deel 

Deel offers payroll and other HR tools for distributed teams—especially those with international employees. Its global HR and payroll capabilities often appeal to businesses seeking help managing compliance with labor laws across multiple countries.

Automate employee leave management with Rippling

For employee leave management without the manual, time-consuming busywork, you need Rippling.

Rippling offers Time & Attendance that automatically syncs to Payroll, saving you from hours of manual, error-prone reconciliation—and Scheduling that allows you to create and enforce custom policies to fit your company’s precise needs, for leave management and more.

But what really makes Rippling stand apart from other leave management systems is that it’s a human capital management solution natively built on a single source of truth for employee data—meaning that unlike the modules in a traditional HCM, every Rippling app is built to help you automate processes. 

For example, employees’ leave requests can be automatically approved or denied based on your company’s policies, or attributes like their role or location. They can also be routed to specific employees for approvals—then synced with Scheduling to make sure you never end up with coverage gaps.

From routine changes like onboarding to complex, custom automations built to meet your organization’s needs, Rippling helps you automate every step of the employee lifecycle.

Leave management FAQs

What does a leave management specialist do?

A leave management specialist handles employees’ leave requests, makes sure approval workflows follow company policies and labor laws, and maintains records for FMLA leave, military leave, and other specialized types of leave. They communicate with employees, managers, and HR leadership to guarantee a smooth, compliant management process.

What is the meaning of annual leave management?

Annual leave management involves tracking and handling vacation days or general PTO allocated to employees each year. It includes accrual calculations, making sure unused vacation days roll over (if the company’s policies allow), and approval workflows to confirm employees can take time off without disrupting operations.

How do you manage leave effectively?

To effectively manage leave, adopt a robust leave management system, communicate clear policies, integrate leave management software with payroll to accurately calculate compensation, and make sure employees understand time off requests and approval steps. Keeping an updated employee handbook and referencing federal labor laws (like the Family and Medical Leave Act) will also help maintain compliance.

This blog is based on information available to Rippling as of February 27, 2025.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.