On January 14, 2025, the U.S. Department of Labor (DOL) Wage and Hour Division (WHD) issued Opinion Letter FMLA 2025-01-A, addressing how state and local paid family and medical leave programs interact with the Family and Medical Leave Act’s (FMLA) paid leave substitution provisions. The letter provides valuable guidance for employers operating in the growing number of states with paid leave programs.
FMLA Background
The FMLA generally provides certain employees of covered employers with up to 12 weeks of unpaid, job-protected leave per year for qualifying reasons. The law also allows employers to require, or employees to elect, to substitute accrued employer-provided paid leave (such as vacation time or sick time) for unpaid FMLA leave. In other words, the employer-provided leave can run at the same time as the unpaid FMLA leave.
Similarly, under the FMLA regulations, if an employee takes leave and receives payment under a disability benefit plan or a workers’ compensation program and there is a qualifying reason for FMLA leave, the employer must count the leave against the employee’s FMLA entitlement.
What if an employee has employer-provided leave available and is receiving disability or workers’ compensation benefits? The DOL has taken the position that, where state law allows, the parties may mutually agree to have the employer-provided leave supplement the benefits. According to the DOL, however, neither party may require substitution under these circumstances, unlike when only employer-provided leave is at issue.
FMLA Substitution and State Programs
In recent years, many states have passed paid family and medical leave programs, such as Colorado’s Family and Medical Leave Insurance Program (FAMLI). The WHD’s letter explains how the FMLA’s substitution provisions interact with these programs, taking the position that such programs are treated in the same way as situations arising under disability benefits or workers’ compensation programs.
Accordingly, if an employee is receiving compensation under a state or local family and medical leave program, the FMLA’s substitution provision does not apply. This means that neither the employer nor the employee may unilaterally require employer-provided paid leave to run at the same time as leave being compensated under the state or local program and the FMLA.
Like situations involving disability benefits or workers’ compensation programs, the parties may agree to supplement the benefits with employer-provided leave, so long as it’s permitted by state or local law. Once benefits under a state program are exhausted, however, the substitution provision once again applies. Therefore, the employer may require, or the employee may elect, to use employer-provided paid leave.
Takeaways for Employers
The letter serves as a reminder that employers covered by state paid family or medical leave programs must carefully ensure they are coordinating benefits under all potentially applicable statutes. When an employee requests leave for a family or medical reason, employers should consult federal, state, and local law to account for all potentially applicable programs.
If you have questions about reconciling these competing requirements and are a Consulting or Enterprise member, please reach out to Employers Council.
Miller Jozwiak is an attorney for Employers Council.