Couple talking to doctor before surgery

May an employee who is unable to work for an FMLA-qualifying reason choose to use paid time off without having it designated as FMLA leave? The U.S. Department of Labor (DOL) says, “No.”

In a March 14, 2019 opinion letter, the DOL made two significant clarifications on FMLA designations. First, the DOL declared that employers cannot delay designating time off as FMLA leave if the reason for leave is FMLA-qualifying. Second, the DOL stated that employers may not provide additional FMLA leave beyond an employee’s maximum FMLA entitlement under the law.

Use of PTO or Other Leaves Does Not Stop the Clock from Ticking on FMLA Leave

The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons. Eligible employees may take up to 12 weeks of FMLA leave in a 12-month period for the majority of qualifying family and medical reasons, or up to 26 weeks of FMLA leave to care for a military servicemember under certain circumstances.

Pursuant to the FMLA regulations, employers may require that an employee’s available employer-provided paid leave, such as sick time or vacation days, run concurrently with FMLA leave. After available paid leave is exhausted, any remaining FMLA entitlement will be unpaid. Even if not required by the employer, employees may elect to substitute paid leave for any portion of unpaid FMLA leave.

The DOL, in its recent guidance, grappled with an interesting question: whether an employer may permit an employee to use available paid time off for an FMLA-qualifying reason prior to starting the clock on the employee’s FMLA leave. In other words, may an employee “save” his or her FMLA leave for a later time by using PTO or other available leave without it running concurrently with FMLA leave?

This issue arises frequently when an employee has a planned FMLA leave on the horizon, for example, for an anticipated surgery or the birth of a child.  An employee may prefer to preserve his or her 12-week FMLA allotment in its entirety for recovery or bonding, and instead use sick leave or vacation time for earlier absences due to the underlying serious health condition or pregnancy-related complications.

In a 2014 judicial opinion (Escriba v. Foster Poultry Farms, Inc.) that applies to employers in California, Oregon, Washington, Montana, Idaho, Nevada, Arizona, Alaska, and Hawaii, the Ninth Circuit Court of Appeals ruled that a worker can affirmatively decline to use FMLA leave, even if the underlying reason for the leave could have triggered FMLA protection.

In its recent opinion letter, the DOL explicitly rejected the Ninth Circuit’s position, concluding that delaying the designation of FMLA leave to allow an employee to defer or extend the protected leave is improper, even if both the employee and employer are in agreement. According to the DOL, employers must designate any time off as FMLA leave if an eligible employee misses work for an FMLA-qualifying reason, regardless of employee or employer preference.

Employers May Not Designate Leave in Excess of the FMLA’s Statutory Allotment

The DOL also stated that employers may not offer employees FMLA leave that exceeds their statutory entitlement.

Importantly, employers may still provide greater family and medical leave rights than guaranteed by the FMLA, including longer and/or compensated leave time for family and medical reasons. However, the DOL made clear that if any company-provided paid leave is used for an FMLA-qualifying reason, the paid leave counts toward the employee’s FMLA entitlement and does not expand the entitlement.  Any additional leave provided by the employer for family and medical reasons is not protected under the FMLA. Consequently, employers should track leave that exceeds the employee’s FMLA entitlement independent of and call it something other than “FMLA leave.”

Review Company Leave Policies and Practices Carefully

Employers should audit their leave policies and practices to ensure that all FMLA-qualifying absences, no matter the duration or availability of PTO, are being appropriately deducted from an employee’s FMLA bank. If employers want to provide paid medical, parental, or personal leave, their policies should specify that the leave will be designated as FMLA leave if taken by an eligible employee for an FMLA-qualifying reason. Employers also should ensure that appropriate FMLA designation notices are sent out for all qualifying events.

For employees within the states bound by the Ninth Circuit’s Escriba decision, it is arguably possible to “save” FMLA leave for a future qualifying event (though it may depend on the specific circumstances at issue). Outside of the Ninth Circuit, however, the DOL’s position prohibits employees from preserving their FMLA entitlement by first using employer-provided leaves. Only if an employee is ineligible for or has exhausted his or her FMLA entitlement may the employer-provided leave run separately from FMLA leave.