Can Employees Decline FMLA Leave While Using Paid Time Off?

Once an employer knows that a leave of absence qualifies under the Family and Medical Leave Act (FMLA), it must designate it as such, even if the employee wants to first exhaust paid-time-off benefits.

The U.S. Department of Labor (DOL) took this position in a recent opinion letter, though its opinion conflicts with a federal appellate court ruling.

The DOL noted that an employer may provide more-generous leave by extending job-protected time off beyond the 12 weeks a year that are covered under the FMLA. Any extension, however, should not be characterized as FMLA leave, said Vanessa Kelly, an attorney with Clark Hill in Princeton, N.J.

"The opinion letter should serve as a reminder to employers of just how technical the FMLA can be and a warning to continue to be vigilant about employee leaves," she added.

DOL opinion letters describe how the agency would enforce applicable statutes and regulations in specific circumstances presented by an employer, worker or other party who requests the opinion. Opinion letters are not binding, but there may be a safe harbor for employers that show they relied on one.

No Wiggle Room

Typically, employers and employees agree when leave is treated as FMLA leave and there are no issues, explained Josh Woodard, an attorney with Snell & Wilmer in Phoenix. 

However, in the letter to the DOL in this matter, the writer noted that employers sometimes let workers use their accrued sick leave or other paid-time-off benefits before starting the clock for the 12 weeks of FMLA leave that eligible employees can take for certain family and medical reasons. The DOL said this practice is not permitted.

"Neither the employer nor the employee can decline FMLA leave if the leave is needed for an FMLA-qualifying reason," explained Melanie Pate, an attorney with Lewis Roca Rothgerber Christie in Phoenix.

The opinion letter affirms the DOL Wage and Hour Division's "clear mandate that employers must designate a leave as FMLA leave within five business days of learning of a qualifying reason," Kelly said. Failure to do so can give rise to an FMLA interference or denial claim.

[SHRM members-only toolkit: Managing Family and Medical Leave]

Some employers have policies that either require or allow employees to use accrued paid time off to replace wages while taking unpaid FMLA leave. The DOL clarified that the paid leave must run concurrently with the FMLA leave.

Significantly, under this DOL guidance, employees cannot save their FMLA leave if they need to take leave now for an FMLA-qualifying reason, said Michele Haydel Gehrke, an attorney with Reed Smith in San Francisco.

Conflicting Court Ruling

The DOL's opinion letter conflicts with a 2014 decision by the 9th U.S. Circuit Court of Appeals, Escriba v. Foster Poultry Farms Inc., which held that an employee may decline to designate time off as FMLA leave, even if the reason for the leave qualifies for such job-protected time off. The 9th Circuit includes Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington.

So how does the opinion letter affect employers in the 9th Circuit? "This is a somewhat open question, because DOL opinion letters do not carry the same authority as a law, DOL regulation or court ruling," Pate said. However, some employment lawyers consider the Escriba case to be an outlier, because it directly contradicts the FMLA regulations, she said. Still, the DOL follows the opinion letters in interpreting the FMLA, and courts may also use them to guide their decisions in FMLA cases, she added.

Technically employers in the 9th Circuit are still bound by the Escriba decision until it is overruled, Gehrke said. "But the DOL opinion letter may give employers persuasive authority to challenge Escriba if they follow the DOL opinion letter and are then sued."

While this conflict likely will be resolved at some point, employers may want to seek guidance from experienced counsel as they try to navigate this complicated issue, Woodard said.