Requiring Employees to Use Paid Leave During FMLA Leave
November 12, 2018
Family and Medical Leave Act (FMLA) leave is generally unpaid. During unpaid FMLA leave an employer can require that employees use paid time off (PTO) or other types of employer- provided paid leave such as vacation or sick leave. The FMLA regulations provide, however, that if during FMLA leave an employee also receives benefits, in any amount, from a disability plan or workers’ compensation, the FMLA leave is not unpaid. Because the FMLA’s general rule permitting employers to require employee substitution of paid leave only applies tounpaidFMLA, during periods of FMLA when any income replacement is received, employers cannot require employees to substitute paid leave. This exception to the FMLA general rule applies regardless of the amount of income replacement received. For example, if an employee taking FMLA is also receiving disability benefits or workers' compensation benefits that replace two-thirds of their income, the employer may not require that the employee use PTO (or other paid leave) to make up for the one-third of income not covered by the disability or workers' compensation benefits. The employee can, however, be required to use paid leave during a waiting period before benefits are received, because the limitation is triggered by the receipt of income replacement benefits. Employers should review their FMLA policies and practices to ensure they properly administer the substitution of paid leave. We recommend all employers have their Employee Handbook reviewed on an annual basis by SESCO to ensure compliance.
This issue was at the center ofRepa v. Roadway Express, Inc., 477 F.3d 938. In that case, Alice Repa suffered an injury that required surgery and a six-week absence from work. During the leave Repa received a weekly $300 disability benefit through a third-party disability plan. While she was on FMLA, her employer required her to use vacation and sick leave. Repa sued seeking to have her sick leave and vacation benefits restored. Repa was awarded summary judgment as the Court held that an employer’s ability to require an employee to substitute paid leave during FMLA is limited if, during FMLA leave, the employee also received disability benefits. While Repa, during her FMLAleave, could have been provided the opportunity to elect to substitute paid leave at the time she was also receiving disability benefits, it was unlawful for her employer to require the substitution of her vacation and sick time.
