Paid Leave Jigsaw: New DOL Guidance for Employers to Fit FMLA and State Rules Together.

This week, the U.S. Department of Labor’s Wage and Hour Division issued an opinion about substituting paid leave under the Family and Medical Leave Act (FMLA) when employees take leave under state-paid family leave programs.

I’ll break it down for you.

Substitution of Paid Leave Generally.

The FMLA allows employees or employers to substitute accrued employer-provided paid leave (e.g., paid vacation, paid sick leave) for any part of the unpaid FMLA entitlement period. The term “substitute” means that the employer or employee can decide to have employer-provided paid leave run concurrently with the unpaid FMLA leave.

State Paid Family Leave Programs.

An increasing number of states have implemented paid family and medical leave programs, which vary in structure, scope, and duration. These programs often cover similar reasons as the FMLA but may include broader definitions of family members or different health conditions. If an employee takes leave under a state or local paid family or medical leave program also covered by the FMLA, the leave must be designated as FMLA leave. The employer must notify the employee of the designation and the amount of leave counted against the FMLA entitlement.

Compensation and Substitution Provisions.

When an employee receives compensation from a state or local family or medical leave program, the FMLA substitution provision does not apply to the compensated portion of the leave. Neither the employer nor the employee can unilaterally require the concurrent use of employer-provided paid leave during the compensated portion of the leave. If the state or local paid leave does not fully compensate the employee, the employer and employee may agree to use employer-provided accrued paid leave to supplement the state or local payments.

Non-FMLA Qualifying Leave.

If state or local paid leave is taken for reasons that do not qualify under the FMLA, it cannot be counted against the employee’s FMLA entitlement.

Exhaustion of State or Local Paid Leave.

If the state or local paid leave ends before the employee exhausts the full FMLA leave entitlement, the employee is still entitled to FMLA protections. Once the state or local paid leave is exhausted, the FMLA substitution provision applies, allowing the employee to use employer-provided accrued paid leave.

For example, suppose an employee takes eight weeks of FMLA leave to care for her mother. She receives two-thirds of her income from a state family leave program during the first six weeks. During this period, neither the employee nor her employer can require the use of her accrued vacation time to supplement her income. However, if state law permits, they can agree to use her vacation time to cover the remaining one-third of her income. The employee can use her accrued vacation time under the FMLA substitution provision for the final two weeks when the state benefits end.

In a nutshell.

The opinion clarifies that while the FMLA’s substitution provision does not apply to compensated leave under state or local paid family leave programs, all other FMLA protections remain in effect. The substitution provision applies once the state or local paid leave is exhausted. This opinion is based on the specific facts and circumstances presented and may differ if additional information is provided.