In January 2025, the U.S. Department of Labor (DOL) under the Biden administration issued non-binding guidance for using employer-provided paid leave during overlapping state paid family leave under the Family and Medical Leave Act (FMLA). (FMLA2025-01-A)
Understanding FMLA and Paid Leave
The FMLA allows eligible employees to take up to 12 weeks of unpaid, job-protected leave per year for family and medical reasons. To reduce financial impact, employees can choose to use accrued paid leave (like PTO, vacation or sick leave) during FMLA leave, or employers can require its use. This “substitution” runs at the same time as FMLA leave, without extending it.
In cases where the employee has both employer-provided paid leave and disability or workers’ compensation benefits, the employer and the employee may mutually agree that the paid leave will supplement such benefits. However, employers may not require use of paid leave in this situation. For example, if an employee receives two-thirds of their salary from a disability program, they can use paid leave to make up the difference to full salary during FMLA leave, if both the employer and employee agree to using paid leave.
New DOL Guidance on Overlapping State Leave
As more states offer paid family and medical leave, questions arise about combining these programs with FMLA. The DOL’s opinion clarifies:
- Compensated State Leave: If an employee on FMLA leave receives compensation from a state leave program, the FMLA substitution rule doesn’t apply to that compensated portion. Therefore, neither the employee nor employer may require the concurrent use of employer-provided paid leave during this time (even to make up the difference in the employee’s full salary).
- Supplementing State Payments: If state leave doesn’t fully cover an employee’s FMLA leave, the employees who have employer-provided paid leave may agree with their employer to use this paid leave to supplement state payments (if state law allows).
- Using Remaining FMLA Leave: If state leave ends before the full FMLA leave is used, the employee can still use the remaining FMLA leave that year.
Bottom Line
When FMLA and state paid leave overlap, FMLA substitution rules don’t apply, meaning that employers can’t force employees to use PTO or vacation to top up their pay. Employers and employees can agree to this, but it must be mutual.
If you need help in complying with FMLA regulations, contact Fredrikson’s Employment, Labor & Benefits Group.
