 Court Rules Benefit Payment Illegal: Why Businesses Should Reconsider Their Unpaid Leave Policy Imagine this: an employee takes unpaid leave for family reasons, periodically interrupts it with sick leave — and this goes on for over a year and a half. Then the Pension and Social Insurance Fund comes to you with a complaint: the temporary disability benefit payment has been ruled illegal. This is exactly the precedent recently examined by a court, and the decision is important for every employer. What happened. An employee was on unpaid leave for over 1 year and 8 months. During this time, she took sick leave several times — formally due to illness. The Social Fund considered this scheme artificial: the person is essentially not working but periodically receives benefits. The court agreed — the payments were deemed unjustified. Why this concerns your business. For small and medium-sized enterprises, every benefit payment is a direct expense. If you have employees on long-term unpaid leave who periodically open sick leave, you risk being denied reimbursement from the Social Fund. This means not only unreimbursed amounts but also potential fines, penalties, and legal costs. How to protect yourself. First, limit the maximum duration of continuous unpaid leave through internal local regulations. Second, if an employee is absent for more than a month, request supporting documents about the real reasons. Third, if you suspect systematic use of sick leave as a way to extend leave, document it and prepare a position for the Social Fund in advance. What to do now. Review your HR records: do you have employees who are on unpaid leave for a total of more than 2-3 months per year with breaks for sick leave? If so, reconsider your policy on such leave or prepare documentary justification for the Social Fund in case of an audit. ASI Biont helps businesses automate HR record-keeping and risk management: AI agents analyze HR data and identify contentious scenarios before they become a problem with funds. Try it for free at asibiont.com