(a) Generally, FMLA leave is unpaid leave. However, under the
circumstances described in this section, FMLA permits an eligible
employee to choose to substitute accrued paid leave for FMLA leave. If
an employee does not choose to substitute accrued paid leave, the
employer may require the employee to substitute accrued paid leave for
unpaid FMLA leave. The term "substitute" means that the paid leave
provided by the employer, and accrued pursuant to established policies
of the employer, will run concurrently with the unpaid FMLA leave.
Accordingly, the employee receives pay pursuant to the employer's
applicable paid leave policy during the period of otherwise unpaid FMLA
leave. An employee's ability to substitute accrued paid leave is
determined by the terms and conditions of the employer's normal leave
policy. When an employee chooses, or an employer requires, substitution
of accrued paid leave, the employer must inform the employee that the
employee must satisfy any procedural requirements of the paid leave
policy only in connection with the receipt of such payment. See Sec.
825.300(c). If an employee does not comply with the additional
requirements in an employer's paid leave policy, the employee is not
entitled to substitute accrued paid leave, but the employee remains
entitled to take unpaid FMLA leave. Employers may not discriminate
against employees on FMLA leave in the administration of their paid
leave policies.
(b) If neither the employee nor the employer elects to substitute
paid leave for unpaid FMLA leave under the above conditions and
circumstances, the employee will remain entitled to all the
paid leave which is earned or accrued under the terms of the employer's
plan.
(c) If an employee uses paid leave under circumstances which do not
qualify as FMLA leave, the leave will not count against the employee's
FMLA leave entitlement. For example, paid sick leave used for a medical
condition which is not a serious health condition or serious injury or
illness does not count against the employee's FMLA leave entitlement.
(d) Leave taken pursuant to a disability leave plan would be
considered FMLA leave for a serious health condition and counted in the
leave entitlement permitted under FMLA if it meets the criteria set
forth above in Sec. Sec. 825.112-825.115. In such cases, the employer
may designate the leave as FMLA leave and count the leave against the
employee's FMLA leave entitlement. Because leave pursuant to a
disability benefit plan is not unpaid, the provision for substitution
of the employee's accrued paid leave is inapplicable, and neither the
employee nor the employer may require the substitution of paid leave.
However, employers and employees may agree, where state law permits, to
have paid leave supplement the disability plan benefits, such as in the
case where a plan only provides replacement income for two-thirds of an
employee's salary.
(e) The Act provides that a serious health condition may result
from injury to the employee "on or off" the job. If the employer
designates the leave as FMLA leave in accordance with Sec. 825.300(d),
the leave counts against the employee's FMLA leave entitlement. Because
the workers' compensation absence is not unpaid, the provision for
substitution of the employee's accrued paid leave is not applicable,
and neither the employee nor the employer may require the substitution
of paid leave. However, employers and employees may agree, where state
law permits, to have paid leave supplement workers' compensation
benefits, such as in the case where workers' compensation only provides
replacement income for two-thirds of an employee's salary. If the
health care provider treating the employee for the workers'
compensation injury certifies the employee is able to return to a
"light duty job" but is unable to return to the same or equivalent
job, the employee may decline the employer's offer of a "light duty
job." As a result the employee may lose workers' compensation
payments, but is entitled to remain on unpaid FMLA leave until the
employee's FMLA leave entitlement is exhausted. As of the date workers'
compensation benefits cease, the substitution provision becomes
applicable and either the employee may elect or the employer may
require the use of accrued paid leave. See also Sec. Sec. 825.210(f),
825.216(d), 825.220(d), 825.307(a) and 825.702(d)(1) and (2) regarding
the relationship between workers' compensation absences and FMLA leave.
(f) Section 7(o) of the Fair Labor Standards Act (FLSA) permits
public employers under prescribed circumstances to substitute
compensatory time off accrued at one and one-half hours for each
overtime hour worked in lieu of paying cash to an employee when the
employee works overtime hours as prescribed by the Act. This section of
the FLSA limits the number of hours of compensatory time an employee
may accumulate depending upon whether the employee works in fire
protection or law enforcement (480 hours) or elsewhere for a public
agency (240 hours). In addition, under the FLSA, an employer always has
the right to cash out an employee's compensatory time or to require the
employee to use the time. Therefore, if an employee requests and is
permitted to use accrued compensatory time to receive pay for time
taken off for an FMLA reason, or if the employer requires such use
pursuant to the FLSA, the time taken may be counted against the
employee's FMLA leave entitlement.
[60 FR 2237, Jan. 6, 1995; 60 FR 16383, Mar. 30, 1995; 73 FR 68089, Nov. 17, 2008]
