Worker receiving disability benefits: Can we substitute unpaid FMLA for paid leave? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Worker receiving disability benefits: Can we substitute unpaid FMLA for paid leave?

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in FMLA Guidelines,Human Resources

Q. My employee, who is a union member, has a nonwork-related injury that requires a six-week absence from work. In the meantime, she is receiving $300 per week through a union trust fund that provides her and other covered union members with short-term disability benefits. She also has requested and was placed on FMLA leave. We’d like her to substitute any unpaid FMLA leave with paid leave, which is our usual company policy when someone is out on FMLA leave. Is there a problem with doing this in this situation?

A. Unfortunately, yes. Although it is usually the case that  an employer may require an employee to substitute unpaid FMLA leave with accrued paid leave, the 7th Circuit Court of Appeals (which rules on cases arising out of Indiana, Illinois and Wisconsin) recently ruled that the FMLA provisions allowing the substitution of accrued paid leave (such as vacation or personal leave) with unpaid FMLA leave do not apply where the employee also is receiving temporary disability benefits.

In other words, an employer cannot require that an employee use up her paid leave during unpaid FMLA leave if that employee also is receiving temporary disability benefits at the same time. This is true even if the disability benefits compensate the employee at less than 100% of her normal income.

However, an employer still may designate the leave as FMLA leave and count the leave as running concurrently for purposes of both the temporary disability benefit plan and the FMLA leave entitlement.

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