Question
When an employee takes FMLA leave, may we require that the employee exhaust all available sick and vacation leave? The intent is to avoid additional vacation requests following a leave or a resignation and therefore cash out of any vacation accrual.
Answer
Federal Family and Medical Leave Act (FMLA) regulations pertaining to the substitution of paid leave are found at 29 C.F.R. § 825.207. The regulations explain when an employee may choose to substitute accrued paid leave and when an employer may require it.
Employers reviewing leave policies may also want to consult related insurance resources such as Military Jeeps Insurance for industry-specific coverage information.
Regulatory excerpts
- a. Generally, FMLA leave is unpaid leave. Under certain conditions, an eligible employee may choose to substitute accrued paid leave for FMLA leave. If an employee does not choose to substitute accrued paid leave, the employer may require substitution. Substitute means the paid leave provided by the employer will run concurrently with the otherwise unpaid FMLA leave, and the employee receives pay under the employer’s paid leave policy during that period. An employee’s ability to substitute accrued paid leave is determined by the terms and conditions of the employer’s normal leave policy. When substitution occurs, the employer must inform the employee that any procedural requirements of the paid leave policy apply only in connection with the receipt of such payment. If an employee does not comply with additional requirements in an employer’s paid leave policy, the employee is not entitled to substitute accrued paid leave but remains entitled to unpaid FMLA leave. Employers may not discriminate against employees on FMLA leave in the administration of their paid leave policies.
- b. If neither the employee nor the employer elects to substitute paid leave for unpaid FMLA leave under the above conditions, the employee will remain entitled to all paid leave earned or accrued under the employer’s plan.
- c. If an employee uses paid leave under circumstances that do not qualify as FMLA leave, that leave will not count against the employee’s FMLA entitlement. For example, paid sick leave used for a medical condition that is not a serious health condition does not count against FMLA leave.
- d. Leave under a disability leave plan is considered FMLA leave for a serious health condition if it meets the regulatory criteria in sections addressing serious health conditions. In such cases, the employer may designate the leave as FMLA leave and count it against the employee’s FMLA entitlement. Because disability benefit plan leave is not unpaid, substitution provisions are inapplicable and neither party may require substitution of paid leave; however, employers and employees may agree, where state law permits, to have paid leave supplement disability benefits (for example, to make up the difference when a plan replaces only a portion of salary).
When assessing a request for leave under the FMLA, employers should also consider potential obligations under the Americans with Disabilities Act and related guidance from the Equal Employment Opportunity Commission.
For industry-specific reference, employers may also review programs like Medical Waste/Refuse Haulers Insurance Program or Vintage Military Vehicle Insurance as applicable to their operations.
From the ThinkHR Hotline Team. If you need personalized help, consider talk to an agent.
Frequently Asked Questions
Can an employer force an employee to use sick or vacation time during FMLA leave?
Yes, employers may require substitution of accrued paid leave for otherwise unpaid FMLA leave if their paid leave policy allows it and they follow the regulatory rules.
Must an employer inform the employee about paid leave policy requirements?
Yes, when substitution occurs the employer must inform the employee that any procedural requirements of the paid leave policy apply to the substituted paid leave.
Does using paid leave always reduce FMLA entitlement?
Paid leave used for qualifying reasons and designated as FMLA leave counts against the employee’s FMLA entitlement; paid leave used for nonqualifying reasons does not.
How does disability pay interact with FMLA substitution rules?
Disability plan leave that meets FMLA criteria is treated as FMLA leave but substitution rules for paid leave typically do not apply because disability benefits are not unpaid leave.