From the Hotline: Requiring Paid Leave Use Before FMLA Leave

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 relevant portions are set forth below.

  • a. Generally, FMLA leave is unpaid leave. However, under the circumstances described in this section, FMLA permits an eligible employee to choose to substitute accrued paid leave for FMLA leave. If an employee does not choose to substitute accrued paid leave, the employer may require the employee to substitute accrued paid leave for unpaid FMLA leave. The term substitute means that the paid leave provided by the employer, and accrued pursuant to established policies of the employer, will run concurrently with the unpaid FMLA leave. Accordingly, the employee receives pay pursuant to the employer’s applicable paid leave policy during the period of otherwise unpaid FMLA leave. An employee’s ability to substitute accrued paid leave is determined by the terms and conditions of the employer’s normal leave policy. When an employee chooses, or an employer requires, substitution of accrued paid leave, the employer must inform the employee that the employee must satisfy any procedural requirements of the paid leave policy only in connection with the receipt of such payment. See §825.300(c). If an employee does not comply with the additional requirements in an employer’s paid leave policy, the employee is not entitled to substitute accrued paid leave, but the employee remains entitled to take 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 and circumstances, the employee will remain entitled to all the paid leave which is earned or accrued under the terms of the employer’s plan.
  • c. If an employee uses paid leave under circumstances which do not qualify as FMLA leave, the leave will not count against the employee’s FMLA leave entitlement. For example, paid sick leave used for a medical condition which is not a serious health condition or serious injury or illness does not count against the employee’s FMLA leave entitlement.
  • d. Leave taken pursuant to a disability leave plan would be considered FMLA leave for a serious health condition and counted in the leave entitlement permitted under FMLA if it meets the criteria set forth in §825.112 through 825.115. In such cases, the employer may designate the leave as FMLA leave and count the leave against the employee’s FMLA leave entitlement. Because leave pursuant to a disability benefit plan is not unpaid, the provision for substitution of the employee’s accrued paid leave is inapplicable, and neither the employee nor the employer may require the substitution of paid leave. However, employers and employees may agree, where state law permits, to have paid leave supplement the disability plan benefits, such as in the case where a plan only provides replacement income for two-thirds of an employee’s salary.

When examining an employee’s need for leave under the FMLA, employers should also do a simultaneous assessment of the employer’s obligations, if any, under the Americans with Disabilities Act (ADA). For additional information, see the Equal Employment Opportunity Commission’s Enforcement Guidance: Reasonable Accommodation and Undue Hardship Under the Americans with Disabilities Act.