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Family and medical leave is generally unpaid, though employees have certain rights to substitute accrued paid leave for the otherwise unpaid time. You must continue providing any group health benefits at the same level and under the same conditions as if the employee were actively employed. This includes medical, dental, vision, mental health and other coverages, and coverage for dependents. If the employee does not return from the leave, you can recover benefit premiums paid during the leave under certain conditions. For more information, see “Health Insurance Cost Recovery” in Return to Work After Medical Leave.
This topic contains the following information:
Because CFRA and/or FMLA is unpaid leave, you are not obligated to compensate an employee taking FMLA/CFRA leave. However, employees can obtain compensation through state disability insurance (SDI) and paid family leave (PFL) benefits, sick pay (including compensation under the new mandatory paid sick leave law), vacation and PTO.
If an employee takes CFRA and/or FMLA leave for the employee’s own serious injury or illness, SDI benefits may be available. SDI is an employee-funded insurance program administered by the California Employment Development Department (EDD). Most employees are eligible for payments if absent for a qualifying reason. There is a seven-day waiting period before benefit payments begin. For more information, see State Disability Insurance and Paid Family Leave and Coordinating State Disability Insurance With Other Benefits.
Employees absent to care for a family member, to bond with a child during the first year after the birth, adoption, or placement for foster care, or to participate in a qualifying exigency related to the covered active duty or call to covered active duty of the individual's family member may be eligible for PFL benefits. 2 Like SDI, PFL is also an employee-funded insurance program administered by the EDD. There is no waiting period. For more information, see Paid Family Leave Defined.
If the CFRA and/or FMLA leave is unpaid, meaning the employee is not receiving disability/wage replacement payments, such as SDI or PFL, you can maintain a policy requiring the use of vacation or other accrued PTO during the family leave. One exception to this is when the employee is taking FMLA leave concurrently with pregnancy disability leave (PDL). The PDL regulations prohibit requiring the use of vacation or PTO while the employee is on PDL. This is true whether the leave is PDL only or PDL/FMLA..
Be sure that there is no conflict with their use under your policy.
Example: The employer’s policy states that vacation can only be used during slow months of the year — November and December. The employee who takes FMLA/CFRA to care for a spouse during January and February could not be required to use vacation for the FMLA/CFRA leave.
If you do not have a policy requiring the use of accrued vacation or PTO during family and medical leave, the employee has the option to choose to use vacation or PTO.
If an employee receives paid disability payments (such as state disability insurance, workers’ compensation or other disability payments) or paid family leave benefits while on CFRA or FMLA leave, you cannot require the employee to use vacation or PTO. The reasoning is that when employees receive these payments while on CFRA or FMLA, it is not an “unpaid” leave. However, the employee can use accrued benefits to supplement disability benefits or paid family leave payments if you both agree to do so.
If the CFRA or FMLA leave for the employee’s own serious health condition is unpaid, the employee has the option to use accrued paid sick leave during their leave.
If an employee receives paid disability payments (such as state disability insurance, workers’ compensation or other disability payments) or paid family leave benefits while on CFRA or FMLA leave, you cannot require the employee to use accrued sick leave benefits during the leave. The reasoning is that because the employee is receiving a disability payment while on CFRA or FMLA, it is not really an “unpaid” leave. However, the employee can use accrued benefits to supplement disability benefits or paid family leave payments if you both agree to do so.
When the leave is unpaid, i.e., no disability payments, employers shouldn’t require employees to use their paid sick leave time. California employers are required to provide mandatory paid sick leave benefits under the Healthy Workplaces Healthy Families Act.3 This leave can be used for the employee's own illness or to care for other family members, which include an employee's spouse, child, parent, registered domestic partner, grandparent, grandchild, sibling, or other designated person. Though CFRA and FMLA regulations allow employers to require the use of accrued benefits during the employee’s leave, the California Labor Commissioner has not provided guidance on whether employers can require the use of paid sick leave provided under the Healthy Workplaces Healthy Families Act. Employers should consult with legal counsel on this issue. For more information, see Paid Sick Leave.
If you provide health benefits under any group health plan, you must continue providing those benefits during an employee’s family and medical leave. The following rules apply:
Pregnancy disability law requires that employers continue group health coverage for a maximum of four months, at the same level and under the same conditions as if the employee were still employed.
California’s pregnancy disability regulations, as well as its CFRA regulations, clarify that the time the employer maintains and pays for group health coverage during PDL cannot be used to meet the employer’s obligation to pay for 12 weeks of group health coverage under the California Family Rights Act (CFRA). Rather, the entitlements to employer-paid group health coverage during PDL and CFRA are two separate and distinct entitlements.4
Dropping group health coverage for an employee still considered a full-time employee (because, for example, an employee is taking further leave as a reasonable accommodation for a disability) may violate the Affordable Care Act’s requirements to provide a full-time employee with minimum essential coverage.
You must be aware of other benefit requirements while an employee takes family and medical leave. Employees on CFRA or FMLA leave (paid or unpaid) are entitled to retain employee status during the leave period. The leave does not constitute a break in service for purposes of longevity or seniority under any collective bargaining agreement or under any employee benefit plan.
The employee is entitled to participate in the plans to the same extent as employees on unpaid personal or disability leaves can participate. You are not required to make plan payments to any pension and/or retirement plan or to count the leave for purposes of time accrued under the plan during any unpaid portion of family and medical leave. However, you must allow the employee to continue to make contributions in accordance with the terms of the plan.
For further information on the DOL regulation, contact:
Office of Workforce Security
Employment and Training Administration (ETA)
U.S. Department of Labor
200 Constitution Avenue, N.W., Room S-4231
Washington, D.C. 20210
Telephone: (202) 693-3046
As a condition of continued coverage, you can require the employee to pay premiums at the group rate. If the employee chooses not to pay premiums to continue these benefits, the employer cannot consider the nonpayment of premiums as a break in service for purposes of longevity, seniority under any collective bargaining agreement or any employee benefit plan requiring the payment of premiums.
Family and medical leave taken by an exempt employee will not affect exempt status.
You can make deductions from the exempt employee’s leave banks for hours taken as intermittent or reduced schedule family and medical leave without affecting the exempt status. For more information on exempt status, see Exempt/Nonexempt.
1. 29 CFR sec. 825.207(d); 2 CCR sec. 11092(b)(2)
2. UI Code sec. 3301(a)(1)
3. Lab. Code secs. 245 - 249
4. 2 CCR sec. 11044(c); 2 CCR sec. 11092(c)(2)
5. 2 CCR sec. 11090 (e)(4)