In 2009, the US Department of Labor released revised regulations clarifying the rules for substitution of leave under the FMLA. These regulations allowed employers to require that employees use their paid time off (PTO) concurrently with FMLA leave. The regulations call this “substitution of paid leave.” The new regulations also limit how employers may require employees to use any workers’ compensation time or disability leave concurrently with FMLA leave.
Substitution of leave does not apply to either workers’ compensation or leave under a disability plan. 29 C.F.R. § 825.207. If permitted by state law, employer and employee may agree to use PTO as a supplement to the employee’s workers’ compensation or disability benefits. In no circumstance, however, may either the employee or the employer force this arrangement. The supplement is capped at the difference between the employee’s regular salary and the amount of the benefit.
For example, if Emily Employee is diagnosed with chronic migraines which qualify her for FMLA leave and disability plan benefits, she would be able to take both and may be able to supplement her unpaid time with PTO. If she usually makes $4,000 per month and disability plan benefits pay her $2,660, she may use PTO time for the remaining $1,340.
Any time substitution of paid leave is used, however, the FMLA requires certain notifications to employees. It is important to speak with an attorney to be sure you are compliant with the FMLA rules.
For more information about FMLA compliance, see the US Department of Labor’s website at www.dol.gov/whd/fmla.
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