HR GENERALIST RESOURCES: VACATION ACCRUAL - What Happens when an Employee takes FMLA or Military Leave?
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Are employers required to continue an employee's accrual of vacation benefits while out on FMLA or military leave?
Consider the following scenarios:
1. An employer's policy states that vacation is accrued based upon length of service. The amount of vacation time increases with every year or service. Does time spent on FMLA or military leave count toward an employee's length of service?
2. An employer's policy states that vacation is accrued based upon hours worked. The amount of vacation time increases with every week of work performed. Does an employer need to continue the accrual for the weeks in which an employee is on FMLA or military leave?
Under the FMLA, an employee is entitled to all benefits, which accrued before the date on which the leave commenced. However, the employee is not entitled to the further accrual of any seniority or employment benefits during a period of FMLA leave, unless the employer’s policies allow leave to accrue for other types of absences. An employer would not be required to continue the accrual of vacation benefits for an employee on FMLA leave regardless of whether the vacations benefits are accrued based upon hours of work or length of service.
Under USERRA, an employee is entitled to the seniority and other rights and benefits determined by seniority that the employee had on the date of the commencement of service in the uniformed services and the additional seniority and rights and benefits that would have been attained if the employee had remained continuously employed. However, employees are not entitled to the accrual of rights and benefits during the leave period, which are not determined by seniority. A seniority-based right or benefit is one that accrues with, or is determined by, longevity in employment. Employers must count time on military leave as time served for purposes of vacation accrual if the accrual is based upon length of service (scenario 1). However, if the accrual is based upon hours of work, an employer does not need to continue the accrual during the period of leave (scenario 2).
Additionally, both the FMLA and USERRA contain strong anti-discrimination language. Therefore, if an employer permits employees on other types of leave to continue to accrue vacation benefits, then it would need to treat employees on FMLA or military leave similarly and continue the accrual of benefits.