Updated Recommendations for Integrating Paid Leave with Family and Medical Leave Act (FMLA) Benefits

In January 2025, the U.S. Department of Labor (DOL) issued new guidance related to the utilization of employer-provided paid leave concurrent with state paid family leave and the Family and Medical Leave Act (FMLA). This non-binding directive aims to provide clarity amid the evolving landscape of family and medical leave provisions under the Biden administration.

FMLA and Employer-Provided Leave: An Overview

The Family and Medical Leave Act, enacted in 1993, allows eligible employees to take up to 12 weeks of unpaid, job-secured leave within a given year for medical or family reasons, including the birth of a child or care for an ill family member. To mitigate financial burdens during this time, employees can opt to use accrued paid leave, such as paid time off (PTO), vacation, or sick leave. This substitution process occurs simultaneously with FMLA leave, without extending the total duration of the leave.

In scenarios where an employee is eligible for both employer-sponsored paid leave and benefits from disability insurance or workers’ compensation, mutual agreement between the employer and employee is necessary to allow paid leave to supplement those benefits. For instance, if an employee receives a two-thirds salary payout from a disability program, they can utilize accrued paid leave to bridge the gap to their full salary, contingent on mutual consent.

Clarification from the DOL on Overlapping Leave

As states increasingly introduce their own paid family and medical leave frameworks, nuanced questions about integrating these programs with FMLA have emerged. The recent DOL guidance delineated several key points:

1. Compensated State Leave: Employees on FMLA who receive compensation from state leave programs are not required to utilize employer-provided paid leave for the compensated portion. This means that neither party can compel the use of paid leave during this period, even to supplement income to achieve full salary continuity.

2. Supplementing State Payments: Where state leave does not fully cover the duration of the FMLA leave, employees possessing employer-provided paid leave may voluntarily agree to use that leave to supplement their state payments. Such arrangements must align with applicable state laws.

3. Utilization of Remaining FMLA Leave: If an employee’s state leave concludes before they have exhausted their eligible FMLA leave, they retain the right to utilize the remaining days within the same calendar year.

Implications for Employers and Employees

This recent guidance underscores a critical aspect of managing employee leave: the necessity for collaboration and transparency between employers and employees. In instances where FMLA and state paid leave pertain to the same period, the established substitution rules do not apply. Thus, employers cannot mandate the use of PTO or vacation to enhance the financial benefit of state leave programs; any such arrangement must be mutually agreed upon.

Given the complexities of managing FMLA compliance alongside state regulations, organizations may find it beneficial to consult with legal or HR professionals. The Employment, Labor & Benefits Group at Fredrikson is equipped to assist businesses in navigating these compliance challenges effectively. Understanding these dynamics not only fosters a supportive work environment but also ensures adherence to evolving labor laws.