Our company’s policy is that employees need to average 35 hours per week in the previous year to qualify for vacation time. Do weeks taken as unpaid FMLA count as “0 hour” weeks in the calculation of average hours worked, or should they be excluded when we determine vacation benefits?
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Most employer vacation policies, like yours, require employees to have worked for most of a week or month or on an approved paid leave of absence in order to earn vacation for that time period. Generally, under the Family and Medical Leave Act (FMLA), employers are not required to allow employees to accrue vacation and sick leave during an unpaid FMLA leave. See 29 U.S.C. sec. 2614(a)(3); 29 C.F.R. sec. 825.215(d)(2).
However, employees on FMLA leave must be treated the same as employees on other types of leave with respect to the accrual of seniority and other benefits. Specifically, an employee’s accrual of paid leave such as vacation should be determined by the employer’s established policy for accrual when the employee is on other forms of leave (paid or unpaid, as appropriate). See 29 C.F.R. sec. 825.209(h).
Therefore, if you require an employee, or the employee elects, to use paid time off for FMLA leave, then the employee is entitled to accrue vacation during the paid portion of FMLA leave on the same basis as the employer allows vacation accrual under other types of paid leaves.
For example, most employers’ vacation policies provide that paid vacation, sick, or holiday time are not excluded for purposes of calculating vacation accrual. Therefore, an employee using paid time off for FMLA leave would continue to accrue vacation under this policy during the paid portion of the FMLA leave just as during other paid leaves.
So, if your vacation policy allows for the accrual of vacation during a paid leave, then you should allow the same accrual for employees using paid vacation or other paid leave during FMLA leave. The key is to treat employees on FMLA leave the same as employees taking leave for another reason and in a manner consistent with company policy and procedures.