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Do Employees Accrue PTO While on FMLA Leave or Vacation?

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It’s a common question - do your employees earn PTO while on FMLA leave or vacation? Generally speaking, employees on FMLA can not be denied benefits they earned before leaving. But this gets a bit slippery for employees on leave who accrue benefits that are based on the hours they work. Usually, it’s the employer’s decision whether an employee continues to earn PTO while on FMLA or vacation. It’s a complicated process, so let’s break it down.

Accrued time off is PTO an employee has earned due to hours worked but has not used yet, while PTO accrual is the policy you set that determines how an employee earns paid time off. The rules surrounding accrued time off and PTO accrual depend on your state’s laws, your company’s policy, and the type of leave your employees take.

Do my employees accrue PTO while on FMLA leave?

In most cases, federal and state laws treat PTO accrual equally for personal, vacation time, and protected FMLA leave. The key is consistency. Your company can allow or not allow PTO accruals to continue while an employee is on FMLA leave, as long as they follow the same policy for every employee. 

For example, if your company policy allows employees to accrue PTO while on paid vacation, and the FMLA leave is paid, employees on FMLA leave must accrue PTO while they’re gone as well. Let’s look at some examples of accrued PTO to make this a bit clearer.

Let’s say your company only allows PTO to accrue while an employee is on the clock. An employee takes 2 hours each week of unpaid FMLA leave for doctor’s appointments. The employee would only accrue PTO for the hours he spent working.

Or, let’s say your company doesn’t allow employees to accrue PTO on unpaid absences, but they do get accrued PTO for paid leave. An employee decides to use their full 12 weeks of FMLA, but due to her company’s policy, uses PTO for the first 3 weeks of her absence. Per her company’s policy, she would accrue PTO during the first three weeks of paid leave, but none during the last 9 weeks of unpaid leave.

Do my employees accrue PTO while on vacation?

Much like deciding if you take cream or sugar in your coffee, the choice is yours. Your policy can allow employees to earn vacation while on vacation, or you can dictate that PTO accrual does not take place while they’re on paid time off. As I mentioned above, be consistent and be sure that your accrual policy is equal for all employees. Below are three common PTO accrual policies you can model your policy after:

  1. PTO accrues based on hours worked

  2. PTO accrues while an employee is on PTO or FMLA leave

  3. PTO does not accrue while an employee is on PTO or unpaid leave

Let’s look at an example of some of these policies in action. Mark earns 0.25 of paid time off for every 40 hours worked. Mark works for three weeks for a total of 120 hours, and then takes a week’s vacation. If Mark’s company offers paid vacation, and his company policy states paid vacations accrue PTO, he’ll earn another full day of paid time off during this entire four week period. 

The calculation for accrued PTO looks like this: 

0.25 x 4(3 weeks of work plus 1 week of paid vacation) = 1 PTO day

Let’s say Mark’s vacation is unpaid, or his company doesn’t allow PTO to accrue while employees are on any kind of paid leave, then he’ll earn 0.75 days of PTO during the same four week period. 

The calculation for 0.75 days of accrued PTO is:

0.25 x 3 weeks of work = 0.75

Can employees use PTO toward FMLA leave?

As a reminder, the law states FMLA leave as an unpaid, but job-protected, absence from work. But employers may elect to pay employees who are on FMLA leave if they choose to. Employees can also take PTO and FMLA leave at the same time. Usually, an employer will require an employee to use all their PTO while on FMLA leave. This gets a bit tricky, but if an employee is receiving a paid benefit, like health insurance, then FMLA is seen as paid, which means you can’t make an employee use PTO toward FMLA leave. 

If an employee is on FMLA leave, they would also be on PTO. If their FMLA leave equals the amount of PTO they have saved, or extends beyond it, then the employee exhausts their PTO bank. However, they can still accrue PTO if company policy allows.

If your company allows or requires employees to use PTO toward FMLA leave, they should continue to accrue PTO, or not, according to your company’s policy. It’s not the easiest time off question to answer, which is way it pays to consult HR experts or a lawyer to ensure compliance. 

Do employees accrue PTO for other kinds of absences?

Remember, consistency is key. Whatever your policy dictates, employees could accrue PTO for all manners of absences, such as:

  • Parental leave

  • Workers’ comp

  • Short-term disability

  • Bereavement leave

State explicitly in your employee handbook; state whether employees accrue PTO for time worked, while on vacation, or otherwise. Don’t forget to include whether employees are expected to use their PTO bank with FMLA or other kinds of unpaid absence. It’s not as simple as taking your coffee black, but it is your choice. 


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