On January 14, 2025, the Wage and Hour Division of the Division of Labor (“DOL”) issued two opinion letters. One of many letters, FMLA 2025-1-A (“Opinion Letter”), supplied steerage on the applying of federal Household and Medical Go away Act (“FMLA”) rules to paid depart workers take below state and native authorities household and medical depart packages. The Opinion Letter clarifies FMLA rules relating to paid depart “substitution”—when employer-provided paid depart runs concurrently with unpaid FMLA depart. The opposite DOL opinion letter, FLSA 2025-1, supplied steerage on when managers and supervisors can lawfully obtain a share of the tip pool
FMLA Background
FMLA supplies eligible workers of employers with at the very least 50 workers entry to as much as 12 weeks of unpaid depart throughout a 12-month interval. (29 U.S.C. § 2612(a)). Entitled people obtain job safety and continuation of group medical health insurance protection throughout their depart so long as the depart is for specified household, medical or navy exigency causes. Because the regulation doesn’t require that the worker be paid throughout FMLA depart, to mitigate any monetary hardships, 29 C.F.R. § 825.207 contemplates circumstances wherein (i) an worker might elect or (ii) the employer might require the worker “substitute” unpaid depart with employer-provided paid depart [e.g., paid time off, vacation, sick days, together “PTO”)] for any a part of an unpaid FMLA interval. Nonetheless, this substitution different is restricted to the unpaid portion of an worker’s FMLA depart: if the worker is receiving incapacity pay or employees’ compensation for any a part of the FMLA interval, neither the employer nor the worker can require substitution of different paid time throughout that interval. In different phrases, as a result of this isn’t unpaid depart, the employer can not require that the worker apply accrued PTO in an effort to “deplete” that profit. As a substitute, they need to mutually agree, if state regulation permits, that PTO be utilized to the FMLA interval.
FMLA requirements set the federal flooring, however states are free to boost the requirements on their very own, and lately, an rising variety of states have chosen to broaden upon these requirements in a wide range of methods. Some states enacted packages that present complete necessary paid household depart largely funded by payroll taxes. California, Colorado, Connecticut, Delaware, Maine, Maryland, Massachusetts, Minnesota, New Jersey, Oregon, Rhode Island, Washington and the District of Columbia fund their methods by means of pooled payroll taxes on workers or employers. New York requires protection by means of personal insurance coverage corporations. Others, together with Alabama, Arkansas, Florida, Kentucky, New Hampshire, South Carolina, Tennessee, Texas, Vermont and Virginia, present voluntary paid depart methods by means of the personal insurance coverage market with various levels of state oversight. Till the Opinion Letter, the DOL had supplied little steerage on how these state and native packages impacted the FMLA substitution provision.
DOL Steerage on Coordination of Advantages
Within the Opinion Letter, the DOL clarified that state or native paid household or medical depart packages shouldn’t be handled in another way than incapacity plans and employees’ compensation packages for functions of coordination with FMLA advantages:
- Any paid depart an worker takes by means of a state or native program that is also coated by FMLA should be designated as FMLA depart and, accordingly, the employer should present the worker with all required notices of such designation.
- As a result of state/native paid household and medical depart packages are handled as paid incapacity packages below the FMLA substitution provision, the employer and the worker should mutually agree to use PTO in the course of the interval wherein the worker is receiving this incapacity pay. Be aware: if the worker’s entitlement below a state/native program ends earlier than FMLA is exhausted, the remaining interval of depart is unpaid and the FMLA substitution provision applies (that means that the employer can then require substitution of accrued PTO).
DOL opinion letters are based mostly on the precise info and circumstances supplied within the request. Due to this fact, whereas the above steerage is useful in clarifying how the DOL would interpret FMLA expenses given state and native paid depart packages, these letters do not need the drive or impact of regulation. Importantly, although it has not but chosen to, the brand new administration might rescind this Opinion Letter.
Sensible Takeaways
- As extra states and localities enact paid household or medical depart packages, employers ought to keep updated with legal guidelines relevant to their operations.
- Since state or native packages have their very own necessities relating to coordination of advantages, with one another and with FMLA, employers should be certain that their actions stay in compliance with these packages.
- Employers ought to assessment their depart insurance policies and search steerage on any updates that could be crucial because of this Opinion Letter or lately enacted state/native packages.
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