The Family Medical Leave Act (FMLA) permits employers to allow or require substitution of paid vacation, personal or sick leave for certain unpaid FMLA leaves of absence.  However, a recent decision by the 7^th Circuit Court of Appeals held that a Wisconsin employer, Roadway Express, Inc., violated the FMLA when it required its employee, Alice Repa, to use paid vacation and sick leave during her FMLA absence that was also covered under a paid disability leave plan. 

Case Highlights:

• In Repa v. Roadway Express, Inc., 7^th Cir., No. 06-2360 (2/26/2007) Alice Repa required a six-week absence from work for a non-work-related injury that was covered by the FMLA.
  
• She was granted short-term disability benefits through a welfare benefit plan to which her employer, Roadway Express, contributed as a member of a multi-employer bargaining unit under a collective bargaining agreement.
  
• Roadway notified Repa that she was required to substitute accrued paid leave for the FMLA leave, and paid her for two weeks of vacation and five sick days upon her return to work. This pay was in addition to the pay Repa received through the disability plan.
  
• Repa sued, arguing that because she received short-term disability benefits, the FMLA provision for substitution of paid leave was inapplicable.
  
• The Court agreed relying on 29 C.F.R. §835.207(d)(1), which states that this provision does not apply to leaves of absence that also are covered by payments from a temporary disability plan.

The Court found that Roadway had misinterpreted the regulation, and ordered Roadway to restore Repa her vacation and sick time. The Court agreed, however, that Repa’s disability leave could run concurrently with her FMLA leave. 

Important Considerations for Your Business:Although the Court that issued this decision does not cover the State of Maine, the decision is consistent with the view of the U.S. Department of Labor Wage and Hour Division as set forth in an Administrative Letter Ruling dated December 17, 2003.  Both should remind employers that:

• Requiring employees to substitute accrued paid leave for FMLA qualifying leave applies only when the FMLA leave is unpaid.
  
• Employers cannot require employees to substitute paid vacation or other paid leave during an FMLA absence that is covered by payment from a temporary disability plan.
  
• An employer may designate paid leave under a temporary disability plan as FMLA leave and count the leave as running concurrently for purposes of both the benefit plan and FMLA leave entitlement.