The question of whether an employee continues to accrue vacation time while on Family and Medical Leave Act (FMLA) leave is a common one. The FMLA is a federal law providing eligible employees with job-protected time off for specific family and medical reasons. However, the accrual of new benefits, such as vacation or paid time off (PTO), is not uniformly guaranteed by this federal mandate. Accrual depends heavily on the nature of the leave, the employer’s internal policies, and potential state or local laws.
Understanding FMLA and Protected Benefits
The FMLA provides eligible employees with up to 12 workweeks of unpaid, job-protected leave within a 12-month period for qualifying needs. These needs generally include the employee’s own serious health condition, the care of a family member with a serious health condition, or the birth or placement of a child for adoption or foster care. The core purpose of the law is to ensure an employee can return to their same or an equivalent position upon the conclusion of the leave.
Employers must maintain the employee’s existing group health benefits for the duration of the leave. Employers must continue the employee’s existing group health benefits as if the employee were still actively working, with the employee remaining responsible for their portion of the premium. This maintenance of existing benefits is separate from the accrual of new benefits like vacation time or PTO. The law focuses on protecting the employee’s job and health coverage, not the ability to earn new paid time off.
The Federal Rule on Accruing Vacation Time
Federal law does not require employers to permit employees to accrue vacation, sick leave, or PTO while they are on FMLA leave. The FMLA is explicit that an employee returning from leave is not entitled to the accrual of employment benefits during the period of absence. This lack of a federal mandate establishes the minimum standard for employers across the country.
The operative rule is that an employee on FMLA leave must be treated the same as other “similarly situated employees” who take non-FMLA unpaid leave. If an employer’s policy dictates that employees on general unpaid leave do not accrue vacation time, that same policy applies to unpaid FMLA leave. Conversely, if the employer allows accrual for other types of unpaid leave, they must allow it for FMLA leave to maintain consistency. The federal standard ensures that any vacation time earned prior to the FMLA start date remains available and protected.
How Employer Policies and State Laws Impact Accrual
The federal rule represents a floor, meaning state laws and employer policies can provide greater benefits. Many states and local jurisdictions have enacted their own family and medical leave laws that include more generous provisions for benefit accrual. For example, several states mandate paid sick leave, where accrual is based on hours worked at a set ratio, such as one hour of paid sick time for every thirty hours worked.
If an employee is paid for a portion of their FMLA absence, such as through a state-mandated sick leave program, they continue to accrue that specific type of paid time off based on the hours paid. The employer’s written policy in the employee handbook can also supersede the federal minimum. If a company policy states that all employees continue to accrue vacation time regardless of the leave status, that policy governs the situation.
In states like California, vacation time is treated as earned wages, which cannot be forfeited, providing a higher level of protection. While a state may not mandate vacation accrual during FMLA, the existence of state-level paid family leave or paid sick leave often means accrual of some form of paid time off continues. Employers must comply with whichever law—federal, state, or company policy—provides the most favorable benefit to the employee.
The Difference Between Paid and Unpaid FMLA Leave
The distinction between paid and unpaid FMLA leave is the most important factor in determining vacation accrual. Although FMLA provides unpaid leave, employees generally have the right to substitute or use any accrued PTO, vacation, or sick leave to cover some or all of the FMLA period. Using paid leave fundamentally changes the employee’s status.
When an employee substitutes accrued paid time off, they are in a “paid status” for that duration. Since the employee is being paid from the employer’s existing benefit plan, their vacation accrual typically continues as it would for any other employee in a paid status. The employer must apply their standard paid leave accrual policy consistently, meaning if an employee on a regular paid vacation accrues new PTO, an employee using PTO for FMLA must also accrue it.
A complication arises when an employee receives compensation from a source other than the employer’s PTO bank, such as a state-run Paid Family and Medical Leave (PFML) program. If the leave is compensated this way, federal guidance specifies that the employer cannot unilaterally require the employee to substitute their accrued employer-provided vacation time. If the employee exhausts the state benefit, or if the leave is otherwise unpaid, accrual of vacation is generally paused until the employee returns to work or begins using their own accrued paid time off.
Tracking and Calculating Vacation Accrual
Tracking vacation accrual during FMLA leave requires careful calculation, especially when the employee is on an intermittent or reduced-schedule leave. If an employer’s policy ties accrual to hours worked, the employee will only accrue vacation for the actual hours they work or the hours for which they substitute paid time off. For example, if an employee earns one hour of vacation for every 40 hours worked, and they work a reduced schedule of 20 hours per week, their accrual rate will be cut in half.
For intermittent leave, the accrual calculation must be precise and pro-rated. If an employee takes four hours of FMLA leave each week but uses accrued PTO to cover those hours, they are treated as having worked a full week for accrual purposes. If those four hours are unpaid FMLA leave, only the hours actually worked are counted toward the accrual formula. Upon the employee’s return, the employer must credit the employee with any vacation time that accrued during the paid portion of their absence.
Practical Steps to Confirm Your Accrual Status
Before starting FMLA leave, confirm your exact vacation accrual status.
Steps to Confirm Accrual Status
Consult the official FMLA paperwork provided by your employer, which should outline how benefits are handled during the absence.
Review the company’s employee handbook or written PTO policy, focusing on sections regarding leave of absence and benefit accrual.
Speak directly with Human Resources or the leave administrator to obtain written confirmation detailing the specific policy that applies to your situation.
Document all communications and retain copies of relevant policies to maintain a clear record of the terms of your leave.