The question of whether an employee continues to accrue Paid Time Off (PTO) while receiving Workers’ Compensation (WC) benefits is complex, as the answer is not a simple yes or no. WC is employer-paid insurance that provides medical benefits and partial wage replacement for job-related injuries or illnesses. PTO, conversely, is a benefit like vacation or sick time that an employee earns over time. Determining PTO accrual status involves navigating the legal definition of the leave, specific state laws, and the employer’s established policies.
The Fundamental Distinction Between Workers’ Comp and Active Employment
Workers’ Compensation is designed as a no-fault insurance system providing income protection, not a continuation of the active employment relationship. WC payments are temporary disability benefits, typically replacing about two-thirds of the employee’s average weekly wage, not a regular paycheck. This distinction is significant because PTO accrual is almost universally tied to active employment status or hours of service.
The time spent on WC leave, particularly Temporary Total Disability (TTD), is viewed as an authorized absence from work. Since the employee is not actively performing job duties, many employer policies define this period as an inactive status for earning new benefits. For most employers, the cessation of work activity translates directly into a pause in the rate at which an employee earns further vacation or sick time.
The Controlling Role of State Laws in Benefit Accrual
Paid Time Off is generally a voluntary benefit not mandated by federal law, meaning its accrual rules are primarily determined by state statutes and employer contracts. States possess significant authority to regulate how employers must treat accrued benefits, and some state laws may indirectly impact PTO accrual during a WC claim. For instance, some states consider accrued PTO to be a form of “earned wages” that vests as labor is performed, making it difficult for an employer to forfeit already-earned time.
State Workers’ Compensation laws rarely contain specific provisions that mandate the accrual of new PTO while an employee is collecting TTD benefits. Most state statutes remain silent on new PTO accrual, effectively leaving the decision to the employer’s internal policies. These policies must not contradict any broader state labor protections. This means an employee’s ability to continue earning time off is not protected by the WC system itself in most jurisdictions.
Reviewing Your Employer’s Specific PTO Policy
Even if state law does not require PTO accrual during Workers’ Compensation leave, the employer’s policy may be more generous. The employee handbook dictates the terms and conditions of benefits like PTO, and its language must be carefully examined. Employees should look for sections defining “active employment,” “leave of absence,” or “Workers’ Compensation leave” to determine the governing rules.
Many policies explicitly state that benefit accrual, including PTO, ceases when an employee is on unpaid leave or non-active status, which WC leave typically is. If the policy is silent or broadly defines a leave of absence as a period during which benefits continue, the company policy governs the accrual status. The employer’s policy is the second most important factor, superseded only by an explicit state law.
How Workers’ Comp Interacts with FMLA and Other Leave Laws
Leave taken for a work-related injury often runs concurrently with the federal Family and Medical Leave Act (FMLA). The FMLA provides eligible employees with up to 12 weeks of job-protected leave and requires the continuation of group health benefits. However, FMLA does not mandate the accrual of new non-health benefits, such as PTO, during the leave period.
Under FMLA, an employee on leave must be treated the same as other employees on similar types of leave regarding benefit accrual. If the employer’s policy stops PTO accrual for an employee on unpaid medical leave, the same rule applies to the FMLA-protected portion of the WC leave. While FMLA protects the employee’s job and health insurance, it does not create a federal right to continue earning new vacation or sick time.
Using Existing PTO While on Workers’ Comp Leave
While the ability to accrue new PTO is often paused, employees can utilize their existing accrued PTO balance while on Workers’ Compensation leave. This is a common strategy to supplement the partial income replacement provided by WC benefits, which typically amount to two-thirds of pre-injury wages. Coordination of these benefits is often subject to state law and company policy to prevent the employee from receiving more than their regular weekly earnings.
In some states, employees may be required to use PTO to cover the initial waiting period, typically three to seven days, before WC wage replacement benefits begin. Employers and employees may also mutually agree to use existing PTO to bridge the income gap between the WC benefit amount and the employee’s full regular pay. This coordination is voluntary in many cases, as an employer generally cannot force an employee to exhaust earned PTO instead of receiving WC benefits.
Practical Steps to Determine Your Accrual Status
To definitively determine whether you are accruing PTO while on Workers’ Compensation, follow these steps:
Review Documentation
Thoroughly review your employee handbook. Pay close attention to sections detailing leave policies, benefit accrual, and the specific rules governing Workers’ Compensation or disability leave.
Contact HR
Contact a Human Resources representative or the benefits administrator within your company. Seek clarification on the written policy and confirm your current accrual status.
Seek External Guidance
If the policy language remains ambiguous or you believe the policy may be misapplied, consult with your state’s Workers’ Compensation board or an employment law attorney.