Requiring Use of Paid Vacation for Unpaid Leaves

Time Off Work for Illness is No Vacation, or Is It?

California businesses with 50 or more employees must comply with the federal Family Medical Leave Act (FMLA) and the California Family Rights Act (CFRA).  For eligible employees, both acts are essentially “you will have your job waiting for you” laws.  Neither FMLA nor CFRA provides for paid leave.  However there are some circumstances where an employer may require a worker exercising such leave rights to expend available paid vacation benefits during his or her absence.

Each of these leave laws requires such employers to provide an eligible worker with a maximum of 12 weeks unpaid leave in a 12 month period. (FMLA also directs a covered employer to provide an eligible employee with up to 26 weeks of unpaid leave to care for certain relatives injured or ill in the course of military service.)

An employee is “eligible” for a FMLA or CFRA leave if: 1) he or she works at a site with 50 or more employees within a 75-mile radius; and 2) he or she has worked for that employer for 12 months  or more (need not be consecutive) and at least 1,250 within the past year.  While the rules can be involved, an eligible employee may take a FMLA or CFRA leave for his or her own “serious medical condition” (as defined by law), for the care of a family member  or domestic partner so afflicted, for pregnancy-related disability (FMLA only), or for bonding with a newborn or adopted child.

Paid vacation time to employees is not a requirement in California.  However, the practice is common as it usually promotes worker morale and productivity.  Once a business provides such a benefit, it is subject to certain rules. See, Vacation Pay in California, No Picnic for Employers Who Don’t Know the Rules.   With clearly stated written policy, a company may also require employees to use such vacation benefit during an otherwise unpaid FMLA or CFRA leave, but only in certain situations.

Federal law establishes the general rule. An employer “may require the employee to substitute accrued paid leave for unpaid FMLA leave…. [as] determined by the terms and conditions of the employer’s normal leave policy.”  See, 29 Code of Federal Regulations (CFR) section 825.207(a), Substitution of Paid Leave.

However, if the subject employee taking such a leave qualifies to receive disability benefits (for example, if he or she is eligible to receive paid California’s State Disability Insurance [SDI] for a serious health condition), then “neither the employee nor the employer may require the substitution of paid leave.”  29 CFR section 825.207(d).

On the other hand, employer and employee may agree to use such accrued vacation benefits to supplement amounts received under state disability.  For example,  state-insured and provided disability pay might only replace up to two-thirds of an employee’s salary.  In that case, that worker and his or her employer can agree to apply accrued vacation benefits to make up the difference.

As situations and circumstances can be varied and complex, seeking the assistance of qualified legal counsel to assist on creation and application of appropriate FMLA/CFRA leave policies is of course a good idea.   It is also good practice for employers to review the workplace policy manual regularly to confirm  compliance with applicable federal and state regulations.

 

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