Rules for PTO accrual during FMLA leave

Q     Can we legally stop the accrual of paid time off (PTO) while an employee is on Family and Medical Leave (FMLA) leave?

A     The FMLA provides for many entitlements for employees on leave, one of which is the right to maintain their healthcare benefits. Under the FMLA, an employer must allow an employee on leave to keep his group health plan coverage with similar conditions that would have been in place had he been working continuously during the leave period. However, other benefits, like PTO and holiday pay, are determined by the employer's “established policy.” Basically, that means benefits beyond group health insurance must be provided based on employer policy or a collective bargaining agreement (CBA) as if the employee was on some other form of leave.

Employers are generally permitted to enact policies and impose restrictions on FMLA leave if the policies and restrictions apply to all types of leave equally. For example, according to the FMLA regulations, “If an employee on leave without pay would otherwise be entitled to full benefits (other than health benefits), the same benefits would be required to be provided to an employee on unpaid FMLA leave.” Accrual of PTO would be a benefit controlled by employer policy.

Another example of a benefit controlled by an employer's policies would be paid holidays. If an employer's policy states that employees who are in unpaid status the day before a holiday aren't entitled to pay for the holiday, the employer doesn't have to pay an employee on unpaid FMLA leave for that holiday.