To pay or not to pay: Navigating paid time off and protected leave

Many employers have long-standing policies stating that an employee taking protected leave must exhaust all accrued paid time off before taking the leave as unpaid. From the employer’s perspective, this makes sense because it generally does not want an employee to return from extended leave only to take days or even weeks off for a vacation. However, each statutory leave law has different rules about whether these types of policies are permitted.

On the federal side, the Family and Medical Leave Act (FMLA) provides eligible employees with unpaid, job-protected leave for certain qualifying reasons. These include but are not limited to an employee’s own serious health condition, care for a family member with a serious health condition, and parental leave. While FMLA leave is unpaid, the law permits an employee to elect, or the employer to require the employee, to use accrued paid time off concurrently during the FMLA leave period.

When an employee uses accrued paid time off, the employee must follow the employer’s normal paid time off policy. So long as it is included in the employer’s policy, the employer can dictate the order in which an employee uses paid time off. For example, an employer’s policy can require an employee to exhaust all paid sick time first, then vacation time, and then any paid personal days.

Under the Americans with Disabilities Act (ADA), a leave of absence may be a reasonable disability accommodation. In these circumstances, an employer does not have to provide paid leave beyond that which is provided to similarly situated employees. However, employers should allow an employee taking leave as a reasonable accommodation to exhaust accrued paid time off first and then provide unpaid leave.

State laws may differ substantially.

Navigating paid time off in conjunction with an employee’s protected leave can be tricky. To avoid making a misstep, employers should review their policies to be sure they comply with each leave law. Importantly, when more than one leave law applies, the rule most favorable to the employee will apply. When in doubt, employers should consult with employment law counsel.

Amy Angel is a partner at Barran Liebman . She advises employers on a full range of employment issues, including complex leave situations and drafts of leave policies. Contact her at 503-276-2195 or [email protected].