The Costs of Miscalculating Paid Leave Laws

By GovDocs
Updated May 9, 2024

Creating new processes to remain compliant with this ever-changing landscape will be paramount for large employers whose at-home workforce will likely alter their employment law compliance efforts.

The proliferation of paid leave laws in recent years has created a complex web for employers to unravel. But in addition to the challenges of complying with the laws themselves, there are other costs beyond the time of deciphering the laws and paying out leave benefits to employees. 

Employers, especially those with locations spread across the country, may consider looking beyond the basics of applying paid leave laws to the hidden costs that could arise. 

Here, we will examine miscalculating and misusing paid leave laws, which can lead to legal repercussions such as fines, lawsuits, and damage to reputation. It may also result in disgruntled employees and decreased morale, impacting productivity and retention. 

Fines for Noncompliance: Miscalculating Paid Leave Laws 

While news headlines and press releases from the U.S. Department of Labor involving noncompliance often involve wage issues, paid leave has become more prevalent of late. 

Penalties for violations of paid leave laws vary, with fines of up to $15,000. The specific amount depends on the jurisdiction and severity of the violation and repeat offenders may face higher fines or additional penalties for noncompliance. It is essential for employers to understand the specific regulations in place at each of their locations to avoid potential fines. 

The increasing complexity of leave-based laws increases the number of reasons employers could face fines, including:  

  • Failure to provide required paid leave benefits to eligible employees. 
  • Improperly calculating or denying paid leave entitlements. 
  • Retaliating against employees for using paid leave. 
  • Failing to provide adequate notice or documentation related to paid leave policies. 
  • Violating recordkeeping or reporting requirements related to paid leave. 

These are just a few examples, and the violations and fines can vary depending on the jurisdiction and the laws in place. It’s crucial for organizations to stay informed and compliant with all relevant regulations. Partnering with GovDocs Paid Leave gives organizations access to a centralized dashboard to help avoid noncompliance across all locations. 

Applying Paid Leave Laws Too Broadly 

Large employers understand the difficulties of applying paid leave laws to their specific locations. Sometimes, for the sake of simplicity, businesses will adopt a single paid leave policy for all employees, regardless of where they work and live.  By taking this regional approach to paid leave, employers may be providing more benefits than they would otherwise. While this approach may save time and energy at headquarters, it can add up quickly. 

Though this is not necessarily a miscalculation, the cost of being too generous with paid leave could be a pitfall for multilocation employers. Important factors to consider when analyzing your regional paid leave policy include accrual rates, date accrual begins, max use per year, and carryover requirements. 

Did you know these requirements are clearly defined for every jurisdiction inside GovDocs’ Paid Leave solution? Quickly access a summary grid or export requirement data as a CSV to sort and analyze your regional and state policies.  


Not Fully Vetting Employee Leave 

Can employees use paid leave to care for their sister’s sick service dog? In one jurisdiction they can. 

Employers must know the differences between all the requirements within each jurisdiction’s paid leave laws. The vagaries of these laws are what make managing paid leave such a challenge. 

Differing requirements might include: 

  • Eligible Reasons 
  • Covered Family Member 
  • Notice to Employer 
  • Rules if Replacement Worker Needed 
  • Posting Requirement 

In addition to understanding the requirements, employers need to ensure that employees have used their leave time appropriately, and if not, to know the right course of disciplinary action to take. 

Learn more ways that GovDocs Paid Leave can streamline your essential paid leave tasks. 

Bad Press 

Lastly, we have the potential for bad press. 

Stories about noncompliance with paid leave don’t come across your news feed as often as wage theft, but company’s public images have grown in importance in recent years, and complying with employment laws is a major component of how people view a business. 

Companies with hundreds or even thousands of locations across the country don’t want their name to be at the top of a Google search followed by the term “paid leave.” Bad press can cause lost funding through lawsuits, large-scale public relations efforts, and more generally through a loss of reputation. 


In conclusion, the costs of miscalculating paid leave laws extend beyond mere financial penalties. Employers face potential legal consequences, damage to employee morale, and reputational harm. Moreover, rectifying errors often requires significant administrative resources and may disrupt business operations.  

To mitigate these challenges, organizations must navigate the complexities of paid leave law compliance effectively with proactive measures such as partnering with GovDocs Paid Leave.

This Employment Law News blog is intended for market awareness only, it is not to be used for legal advice or counsel.

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GovDocs simplifies employment law compliance for large, multi-jurisdiction employers in the U.S. and Canada. The GovDocs software platform integrates three solutions in one convenient place to help you master the employment laws impacting your business. Whether you manage a postings, minimum wage or paid leave program, our products cut through research time, provide proactive insights into the everchanging landscape of employment laws and reduce the risk of noncompliance. The company is headquartered in St. Paul, Minn.

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