Navigating Employer Leave under Federal FMLA and State Family and Medical Leave Programs - Bim Group

Navigating Employer Leave under Federal FMLA and State Family and Medical Leave Programs

Employers are increasingly faced with the challenge of managing time-off policies amid a complex web of state, local, and federal laws – specifically the interplay between state paid family and medical leave (PFML) programs and the federal Family and Medical Leave Act (FMLA). An opinion letter issued by the U.S. Department of Labor’s (DOL) Wage and Hour Division (WHD) on January 14, 2025, offers crucial guidance on these overlapping requirements.

Background

The FMLA grants eligible employees of covered employers up to 12 weeks of unpaid, job-protected leave per year for specified family and medical reasons, with an extended entitlement of up to 26 weeks for employees caring for a covered servicemember with a serious illness or injury. FMLA leave is unpaid, but the statute permits employees to elect—or employers to require—the substitution of accrued employer-provided paid leave, such as vacation or sick leave, to run concurrently with FMLA leave, thereby mitigating financial hardship.

However, when an employee is receiving payments under a disability benefit plan or workers’ compensation program while on FMLA leave, the leave must be designated as FMLA leave, but neither the employer nor the employee can require the substitution of employer-provided paid leave. Employers and employees may mutually agree, where state law permits, to supplement disability or workers’ compensation benefits with employer-provided paid leave to bridge income gaps. This aligns with the FMLA’s statutory purpose, which ensures minimum protections while encouraging employers to offer more generous leave policies.

Key Takeaways

State PFML Programs and FMLA

Thirteen states and the District of Columbia have mandatory PFML programs, which provide income replacement for employees absent for family or medical reasons. These programs often overlap with the unpaid leave provisions of the FMLA, creating administrative challenges for employers.

Employers must carefully assess whether an employee’s leave qualifies under both PFML and FMLA. If the leave is covered by FMLA,

  • It must be designated as FMLA
  • Notice must be given to the employee of this
  • The leave should be counted against the employee’s FMLA leave

If an employee’s leave under a PFML program does not qualify for FMLA, the employer cannot count it against the employee’s FMLA entitlement.

Substitution of Paid Leave Under FMLA

FMLA regulations allow employees to elect—or employers to require—the use of accrued employer-provided paid leave (e.g., vacation or sick leave) during unpaid FMLA leave.

However, when an employee receives compensation through a state PFML program or other benefit programs, employers cannot require the concurrent use of employer-provided paid leave. Where state law permits, the employer and employee may agree to the use of accrued paid leave to supplement PFML payment.

If PFML benefits are exhausted before the employee’s FMLA leave entitlement is fully used, the remaining FMLA leave can be unpaid or supplemented by accrued paid leave under the FMLA substitution rules.

Practical Application

The DOL provides the following example to illustrate these principles.

Scenario: Yvette takes eight weeks of FMLA leave to care for her mother following surgery. Her employer designates the full eight weeks as FMLA leave. Yvette also qualifies for her state’s PFML program, which pays two-thirds of her salary for up to six weeks.

During the First Six Weeks: Yvette cannot be required to use her accrued vacation or other paid leave to supplement her state-paid PFML benefits unless state law permits, and Yvette agrees. If allowed, she could use one-third of her vacation time weekly to make up the remaining one-third of her salary.

During the Final Two Weeks: After Yvette exhausts her state PFML benefits, her leave becomes unpaid. Under FMLA, she can elect—or her employer can require—the use of her accrued paid leave to receive compensation for this period.

Employer Action Items

  • Understand state PFML laws: Familiarize yourself with PFML programs in the states where you operate, as they vary widely in eligibility, payment structures, and coordination with FMLA.
  • Review leave policies: Ensure your leave policies are compliant with both state PFML and federal FMLA requirements, particularly concerning the substitution of paid leave.
  • Communicate with employees: Provide clear, timely notices to employees about FMLA leave designations and how their leave interacts with state or local PFML
  • Train HR and managers: Equip your HR teams and managers with the latest DOL guidance to handle leave requests

 

This information has been prepared for UBA by Fisher & Phillips LLP. It is general information and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors.

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