Ask the Expert: Can We Require PTO Use during Short Term Disability Leave?

Question:I am looking for best practices on requiring or not requiring use of PTO in our Short Term Disability leave policies.

Answer: When employees are injured or disabled or become ill on the job, they may be entitled to medical and/or disability-related leave under two federal laws: the Americans with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA). In addition, state Workers’ Compensation laws have leave provisions that may apply. Depending on the situation, one or more of these laws can apply to the same employee.

When employees need time off because of a medical or disability-related issue, it is important to remember that they may have rights under all of these laws at the same time. In certain circumstances, provisions of the ADA, the FMLA and Workers’ Compensation laws can apply to the same employee, and employers may find understanding their responsibilities a challenge.

For example, a Workers’ Compensation injury that requires hospitalization or incapacitates an employee for more than three days and requires continuing treatment by a healthcare provider generally qualifies as a serious health condition under the FMLA. If the injury causes a permanent mental or physical impairment that substantially limits a major life activity, that same employee could be entitled to additional leave as a reasonable accommodation under the ADA.

In addition, several states have enacted their own family and medical leave laws, some of which provide greater amounts of leave and benefits than those provided by the FMLA, and/or provide benefits to employees who are not eligible for FMLA. When employees are covered by both federal and state family and medical leave laws, they are entitled to the greater benefit or more generous rights provided under the different parts of each law.

Below are the basic steps employers can follow to determine their responsibilities regarding medical and disability-related leave requests:

1. Determine which laws apply to employees as a group. For example, the ADA applies to employers with 15 or more employees. The FMLA applies to private employers with 50 or more employees. Thus, for both laws to apply, a private employer must have 50 employees.
2. Determine which laws cover the particular employee’s situation. For example, a short-term or temporary condition does not usually meet the ADA’s definition of disability. Below is a quick checklist:

• Is the injury work related? (Workers’ Compensation)
• Does the employee have a serious health condition? (FMLA)
• Does the employee’s condition meet the definition of disability? ( ADA)

In some situations, employers may need to decide if a medical certification or consultation is necessary to ensure that a requested accommodation is necessary and reasonable. Also, the FMLA allows employers to request a medical certification of the serious health condition.

1. Determine the employee’s benefits and/or entitlements under the relevant laws. As described above, when more than one law applies, employers must provide leave under whichever law provides the greater rights and benefits to employees.
2. Evaluate whether the employee is entitled to reinstatement once able to return to work. If so, consider whether there are obligations to provide any accommodations, an altered work schedule, and/or a light duty assignment.
3. Evaluate whether the return to work poses a direct threat to the health or safety of the employee or others in the workplace.

Generally, leave taken under the federal FMLA is unpaid. However, employees may be eligible to receive money or pay while they are on FMLA leave by substituting paid vacation, sick, personal, or other paid leave time for unpaid FMLA leave time.

The 2009 final FMLA regulations changed and substantially simplified the rules for substitution of paid leave for unpaid FMLA leave. Under the final regulations, if an employee chooses to substitute accrued paid leave for FMLA leave, he or she may do so. If an employee does not choose to substitute accrued paid leave, the employer may require the employee to substitute accrued paid leave for unpaid FMLA leave pursuant to the employer’s established policies for use of paid leave.

Note: The employer may require that an employee comply with its established leave policies for use of paid leave, even if they are more (or less) stringent than the FMLA’s rules.

Leave taken pursuant to a disability leave plan is considered to be FMLA leave for a serious health condition and counted against the leave entitlement permitted under FMLA, so long as the disability qualifies as a “serious health condition.” The employer must give the employee all required notice and designate the leave as FMLA-eligible in order to “count” it against the employee’s leave entitlement.

Because leave taken under a disability benefit plan is paid (at least in part), an employer may not require the employee to substitute accrued paid leave during disability leave. However, employers and employees may agree, where state law permits, to have paid leave supplement the disability plan benefits, such as in the case where a plan provides only replacement income for two-thirds of an employee’s salary.

Example

An employee injured her back while building a deck on her house and took 6 weeks of FMLA leave for surgery and recovery. During her leave, she received short-term disability (STD) benefits of $300 per week from a multiemployer health and welfare fund that was not sponsored by the employer. When the company granted the employee’s request for leave, it notified her that any paid leave she had would run concurrently with her FMLA leave. It paid her for 5 sick days and 2 weeks of vacation, which she received in addition to the $300 per week she was getting under the STD plan.

The employee sued alleging that the company had violated the FMLA by requiring her to use up her available sick and vacation pay during her FMLA leave when she was already receiving paid disability benefits. The court agreed that the employer had violated the FMLA by requiring her to use her paid leave benefits concurrently with her FMLA leave.

Based on Repa v. Roadway Express, Inc., 477 F.3d 938 (7th Cir. 2007).