Understanding how FMLA and PTO works
May employees use accrued paid time off (PTO) and leave under the federal Family and Medical Leave Act (FMLA) concurrently? A customer asked us that question during a recent webcast.
Employees who receive PTO as a company benefit have the right to use it while on unpaid FMLA leave. Since FMLA leave is unpaid, being able to use PTO at the same time helps employees cover expenses while off work.
In other words, PTO and FMLA leave can run concurrently (i.e., together), when applicable. Even though they might seem similar on the surface, there are differences:
- FMLA: employee entitlement that provides job-protected, unpaid leave for qualifying events.
- PTO: employee benefit that provides income replacement when off work.
It’s important to note that employers have the right to mandate that employees use PTO and unpaid FMLA leave concurrently. This practice helps employers manage the amount of time that employees are off work.
PTO can’t be “used up” first
Sometimes employers trip up by requiring employees to use their PTO first, and then applying FMLA leave afterwards. Decisions like this could land an employer in front of a judge with an FMLA interference claim.
FMLA is an employee entitlement law, NOT an optional benefit. This means that if an employee is eligible for FMLA leave and the reason qualifies, employers must designate the time off as FMLA. Employers may not delay the FMLA leave if an employee is also using PTO.
PTO and workers’ compensation or short-term disability
Employers may not require, and an employee may not choose, to use accrued PTO during any FMLA leave when the employee is receiving wage replacement, such as through a disability benefit plan (e.g., short- or long-term disability) or through a workers' compensation program.
Where state law permits, however, employers and employees may agree to have accrued PTO supplement workers' compensation or disability plan benefits, which generally only replace a portion of the employee's normal wages.
PTO and FMLA in short increments
Generally, an employee may choose to substitute accrued PTO for unpaid FMLA leave if the employee complies with the terms and conditions of an employer’s paid leave policy.
If a paid leave policy requires paid leave to be used in certain increments (e.g., four hours), and the employee wants to use paid leave, then FMLA leave will be used in the same increment of time as required by the paid leave policy (i.e., four hours).
As an example, if an employee needs to take two hours of FMLA leave for an appointment, an employee may either choose to comply with the paid leave policy by taking four hours of PTO for the doctor’s appointment (while using four hours of FMLA leave), or the employee may ask the employer to waive the requirement that PTO be used in four-hour increments and, instead, only use two hours of PTO (i.e., a policy exception). The employee may also take unpaid FMLA leave for the two hours.
If the employee wants to take unpaid FMLA leave for the two-hour appointment, an employer must allow them to take just two hours of leave. In this situation, the employer would count only two hours of FMLA leave against the employee’s 12 weeks of FMLA leave.
Key to remember: The intersection of FMLA leave and PTO can be tricky. Knowing how to apply both can help employers stay compliant.
