Guidelines for the Use of Administrative Leave

A recent consulting activity raised the question of the appropriate use of administrative leave. Sometimes it may be necessary to place one of your employees on leave. The most common reason for doing this is to safeguard the employer during an investigation into allegations of misconduct. Administrative leave includes both the temporary removal of the employee from all job duties or the temporary re-assignment of an employee to a different job pending an investigation. Administrative leave is not a disciplinary action, and it should not harm the employee’s record or performance appraisal. If the investigation confirms wrongdoing on behalf of the employee, disciplinary action should be imposed following the investigation.

You, as the employer, may question whether the nature of the alleged infraction is significant enough to warrant placing the employee on administrative leave. The critical question is not the seriousness of the infraction, but rather the vulnerability of the employer. If the nature of the infraction is such as to create a potential liability for the employer if the employee continues to perform his or her duties during the investigation, then administrative leave is appropriate. For example, if you believe an employee is embezzling money from the organization, the minimum prudent response is to remove that employee from a position where he or she can continue to take money. Similarly, an employer would not allow an employee to continue to drive a school bus during an investigation into a drunk driving charge. Were an accident to happen, the liability would be enormous.

In implementing an administrative leave, there are a few basic rules to follow:

1. Your actions must be consistent with your personnel policies and/or your labor contract.

2. You should have a consistent policy. Paying one employee who is on administrative leave and not another could lead to legal action or allegations of disparate treatment. Also the employer should be clear about whether an employee can use any accumulated vacation or other paid leave to compensate for an unpaid administrative leave.

3. In making a determination of whether administrative leave is appropriate, you should consider the potential legal liability of allowing the employee to remain at work, the state of mind of the employee, and whether the employee could potentially cause more harm or disruption if he or she remains at work during the investigation.

4. The law does not require that you pay an employee when they perform no work. Most employers, however, find it wise to, at minimum, reimburse an employee for lost wages if he or she is exonerated. Otherwise you may find yourself dealing with a bitter employee.

5. If you call the employee in for an investigative interview, you must pay the employee for this time. I recommend a full day’s pay as an incentive for cooperation.

6. If an incident occurs during the workday, you should send the employee home with pay for the remainder of the day. If the employee is exempt from overtime, you should always pay the employee for a full day when they are sent home, regardless of whether the remainder of the leave will be without pay. Exempt employees by definition are not “hourly”, and employers should not dock their pay in any increment less than a full workday. Doing so may lead to challenges of the employee’s exempt status.

7. Be sure the employee is aware of how they will be kept informed of the status of the investigation. Employees should be told that they must be available during working hours to attend conferences or interviews related to the investigation. Also it’s a good idea to designate days and/or times that the employee should contact their supervisor or Human Resources to check in.

8. An administrative leave may be turned into a suspension without pay if the investigation establishes charges sufficient to justify a suspension but not sufficient to terminate the employee. “Time served” thus becomes the discipline and gets the employee back to work.

9. To avoid disputes later, always follow up with the employee in writing. Send a memo to the employee notifying them that they have been placed on administrative leave, the reason for the leave, whether the leave will be paid or unpaid, and how contact will be maintained during the leave. Also, if your labor contract or organizational policies provide for a hearing or conference with the employee, the memo should state the process and timelines for requesting such a process. Keep a copy of the memo in the employee’s file.

10. It is in your best interest, and the employee’s, to conduct the investigation as expediently as possible. Remember, you are either losing money to pay an employee to stay home, or creating a financial hardship for an employee who is home without pay.

The time to create a policy on administrative leave is not when an incident occurs. If you do not have a policy developed, you should consider creating one. Be sure that your policy is clear and utilized consistently and that your managerial staff are trained on the use of administrative leave for investigation of wrongdoing. Hopefully, you won’t need to use your policy, but it’s best to be prepared.