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An employer cannot require an employee to substitute paid leave for leave taken under the Federal Family and Medical Leave Act (“FMLA”) when the employee is also receiving disability benefits. This applies whether the disability benefits are being received under an employer plan or a third-party plan. (Repa v. Roadway Express, Inc., 7th Cir. February 26, 2007).
In this recently decided case, an employee suffered a non-work-related injury that required surgery and a six week absence from work. The employee was granted disability benefits under a third-party plan, not the employer’s temporary disability plan. The same day that the employee applied for disability benefits, she notified her employer of her need for leave under the FMLA. Her employer notified her that she would be required to substitute any accrued paid leave she had available for her unpaid FMLA leave. When the employee returned from her leave, during which she received $300 per week in disability benefits, her employer paid her for five sick days and two weeks of vacation.
The Seventh Circuit decided that the employer could not require its employee to substitute her sick and vacation benefits during her FMLA leave because she was already receiving short-term disability payments during her absence.
The Court based its decision on the federal FMLA regulations, which state “[b]ecause the leave pursuant to a temporary disability benefit plan is not unpaid, the provision for substitution of paid leave is inapplicable.” 29 CFR Sec. 825.207(d)(1). The Court also stated that nothing in this sentence limits the prohibition of substitution where the temporary disability benefit plan is the employer’s plan. Therefore, an employer can require substitution during an employee’s federal portion of an FMLA leave only if the employee is not receiving disability benefits during the leave.
The Court left open the question of whether the regulation itself is invalid because its effect permits employees to extend their leave beyond the 12 weeks provided by the federal FMLA, upsetting the “balance struck by Congress in trying to meet the needs of families and employers when it devised the twelve week figure.” We will keep you posted on employers raising this argument in future cases.
It is important to note that the Wisconsin FMLA prohibits an employer from requiring substitution of paid time off during the portions of leave taken under the Wisconsin FMLA. The Court did not address this issue; however, the Wisconsin FMLA substitution provision should be taken into consideration whenever an employee requests family and medical leave.
For more information regarding family and medical leave or other employment law issues, please call our educational services department at (414) 988-8400 or e-mail kam@kclegal.com.
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