Do Restrictions on Accrued Sick Banks or PTO Comply with FMLA’s Provision for Substitution of Paid Leave?

By Phil Lacy

Health and Productivity Practice Leader
Trion Group, a Marsh & McLennan Agency LLC

Many employees have learned how to take unscheduled time off using accrued sick leave or paid time off (PTO) days under the Family and Medical Leave Act (FMLA) to avoid attendance policy action. This happens especially in healthcare, the largest industry that still has accrued sick leave plans.

In a common benefit design in healthcare, employees receive time off for incidental and extended absence due to disability through accrued sick leave plans, often called extended illness benefit or extended disability benefit. Some employers have gone as far as to provide generous PTO accruals where an employee can bank up to 480 to 520 hours of PTO to use for an extended absence due to illness or disability.

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