More than 20 states and municipalities have enacted paid family and medical leave laws in recent years, and the list is growing. A recent DOL advisory opinion clarifies how employer-provided paid leave is managed under the Family and Medical Leave Act (FLMA) when the employee is also entitled to paid leave under a state-mandated or local program. Employers should note the opinion letter references state paid leave plans, which are different from commercial disability plans that could have different requirements on how employer paid leave programs are addressed.
The FMLA provides up to 12 weeks (26 weeks in limited cases) of unpaid, job-protected leave in certain personal and family medical situations. Employers can require and employees may request to “substitute” the unpaid leave with available employer-provided paid leave during that time period to mitigate loss of wages. However, if an employee receives disability or workers’ compensation benefits during any part of FMLA leave, neither the employer nor employee can require substitution of paid leave because the time off is not unpaid due to the benefit payments. The employer and employee can mutually agree (where allowed by state law) to use employer-paid leave to cover any wage shortfall.
Addressing leave under new state paid leave laws
Given the relative recency of the paid state leave laws, FMLA regulations haven’t addressed how paid state and local leave are managed. The advisory letter makes it clear the long-held practice that applies to disability and workers’ compensation programs will extend to state and local paid leave. The opinion letter clarifies:
- First, where an employee takes leave under a state or local paid family or medical leave program, if the leave is covered by the FMLA, it must be designated as FMLA leave and the employee must be given notice of the designation, which should include the amount of leave to be counted against the employee’s FMLA leave entitlement.
- Second, where an employee, during leave covered by the FMLA, receives compensation from a state or local family or medical leave program, the FMLA substitution provision does not apply to the portion of leave that is compensated.
- Finally, if the employee is receiving compensation through state or local paid family or medical leave that does not fully compensate the employee for their FMLA covered leave, and the employee also has available employer-provided paid leave, the employer and the employee may agree, where state law permits, to use the employee’s employer-provided accrued paid leave to supplement the payments under a state or local leave program.
In the event the paid state or local leave is exhausted, but additional unpaid, job-protected FMLA leave remains, the employer-provided paid leave can be substituted by the employer or employee. The opinion letter provides an example that illustrates the principles:
- Yvette takes eight weeks of continuous FMLA leave to care for her mother following her mother’s inpatient surgery. Yvette’s employer notifies her that the eight weeks are designated as FMLA leave. Caring for a parent with a serious health condition is also a qualifying reason under her state’s family leave program, and she applies for and receives benefits that replace two-thirds of her normal income each week that she is on leave, for up to six weeks.
- During the six weeks that Yvette is receiving paid leave benefits under the state program, under the FMLA, her employer cannot require, and she cannot unilaterally elect, to substitute her accrued vacation under her employer’s leave plan and thereby receive full pay from her employer in addition to the state-paid benefit. However, if Yvette’s state permits an employee to use accrued paid leave concurrently with the state’s paid leave, the FMLA permits Yvette and her employer to agree that Yvette will use one-third of a week of her vacation time each week to supplement the portion of her full pay that is not provided by the state’s paid leave benefit.
- During the final two weeks of Yvette’s FMLA leave, she will have exhausted her state program’s paid leave. At that point, her leave becomes unpaid leave, and the FMLA substitution provision applies. Yvette elects to use her employer-provided accrued paid vacation time to receive pay during the final two weeks of her FMLA leave.
While a DOL opinion letter is not legally binding, it does give insight to help employers and employees understand their rights and responsibilities under the law.
For additional information contact Bukaty’s HR consulting team.
