The U.S. Department of Labor (DOL) Wage and Hour Division (WHD) has issued an opinion letter addressing how employers must handle accrued paid time off (PTO) when employees take leave under the Family and Medical Leave Act (FMLA) while also receiving state or local paid leave benefits. The key clarification: employers cannot require employees to substitute PTO for FMLA leave if the employee is already receiving payments from a state or local paid leave program.
FMLA vs. State and Local Paid Leave
- FMLA Leave: Provides eligible employees up to 12 weeks of unpaid, job-protected leave (or 26 weeks in certain cases) for qualifying reasons, such as a serious health condition, childbirth, adoption, or caregiving.
- State/Local Paid Leave: Some states (e.g., New York, California, Massachusetts, Connecticut) and localities have paid family and medical leave programs, often for similar reasons, but with differing benefits and durations.
New Clarifications on PTO Substitution
- FMLA Leave Must Be Designated – If an employee takes state/local paid leave for an FMLA-covered reason, the employer must designate the leave as FMLA.
- No Forced PTO Use – If an employee receives state/local paid leave benefits, employers cannot force PTO use during that period.
- Supplementing Partial Pay – If state/local benefits only cover part of an employee’s wages, employers and employees may agree to use PTO to supplement the income.
- PTO Use for Unpaid Leave – If an employee exhausts state/local benefits but still has FMLA time remaining, the employer may require PTO use for the unpaid portion.
Employer Action Steps
Employers should review leave policies to ensure compliance with this interpretation, especially in states with paid leave laws. Policies requiring mandatory PTO use alongside paid state/local leave should be revised, and HR teams must ensure correct FMLA designations.
Employers must act promptly to align policies with the WHD’s guidance to avoid compliance risks and maintain employee protections.