November 29, 2010
As a general rule, employers are not required to provide any non-health plan benefits to employees on FMLA leave, (such as holiday pay) unless such benefits are provided to employees on non-FMLA leave (29 C.F.R. 825.209).
The U.S. Department of Labor addressed your question in an Opinion Letter that can be viewed at http://www.dol.gov/whd/opinion/fmla/prior2002/FMLA-21.htm.
For your convenience, the parts most relevant to your question are copied below.
The question posed to the DOL was:
“Name* currently has an employee on FMLA leave. During the leave the Thanksgiving, Christmas and New Year holidays will occur. The employee is substituting paid sick and vacation leave for the unpaid FMLA leave. It is the Name* policy not to grant holiday pay for any employee who takes a personal leave or educational leave. You ask if the employee is entitled to holiday pay for the three holidays while on FMLA leave.”
“During our telephone conversation you stated that the personal leave and educational leave you referenced in your letter are forms of unpaid leave. You were not sure what the Name* policy is regarding holiday pay during periods of paid leave such as vacation.”
The DOL responded as follows:
“If the employee is entitled to receive holiday pay while on paid leave (e.g., vacation leave) the employee is entitled to holiday pay when the paid leave is being substituted for unpaid FMLA leave. In accordance with the Name* policy, the employee would not be entitled to holiday pay when the employee is taking unpaid FMLA leave. As we discussed, if the employee is entitled to holiday pay while substituting paid leave for unpaid leave, the fact the employee received pay for one or more days in the form of holiday pay would not extend the employee’s leave entitlement. For example, if the employee is paid holiday pay for one day, the employee does not then receive 12 weeks and one day of FMLA leave. The entitlement is still 12 weeks.”
Based on this information, you will need to review your policies regarding payment for holidays when employees are on other types of leave. If you pay employees out of work on non-FMLA leave for this time, then you should not single out individuals on FMLA leave for different treatment.