On January 16, 2025, the Department of Labor (DOL) issued an Opinion Letter clarifying, for the time being, whether employers could deduct from any employer-sponsored Paid Time Off (PTO) during an employee’s use of their annual 12-week FMLA allotment where the employee was receiving state workers’ compensation or other disability-related compensation.
Analyzing the overlap between FMLA and other types of state or employer-sponsored benefits, the Opinion concluded that an employer cannot unilaterally require an employee to use PTO time while being paid weekly wages under the Workers’ Compensation system or any similar benefits plan. However, the DOL also concluded that the employer could do so only with the employee’s agreement. Likewise, the DOL opined that the employee would need the employer’s agreement to pay out PTO benefits if an employee used FMLA time and workers’ compensation benefits concurrently.
The FMLA entitles eligible employees of covered employers to take up to 12 weeks of unpaid, job-protected, unpaid leave per year for specified family and medical reasons. The FMLA statute allows employees or employers to elect or “substitute” employer-provided paid leave for any part of the unpaid FMLA entitlement period. Many employers run disability leave and/or workers’ compensation leave concurrently with the 12-week FMLA allotment. Accordingly, employers might begin to pay out and “exhaust” the employee’s PTO time while the employee is receiving disability or workers’ compensation payments.
In light of this Opinion, it is important that the employee and employer agree in advance that PTO will be exhausted even though the employee is receiving wage payments from workers’ compensation or other benefits plans that replace wages during a leave period.
Employers with questions regarding FMLA and Workers’ Compensation benefits should contact an attorney to ensure that they comply with these areas of “overlap” regarding employee leave and the FMLA entitlement. The attorneys at Pickrel, Schaeffer & Ebeling can help navigate this latest decision and any employee-related matters. Please get in touch with Kristina Curry at 937.223.1130 or kcurry@pselaw.com.
