February 26, 2010: What is the most disliked rule in the 1993 Family and Medical Leave Act (FMLA)? Undoubtedly, the provision that allows employers to substitute workers’ vacation leaves during FMLA absences. Employers frequently use the privilege to dissuade workers from using FMLA time to care for family members.

Take a worker who schedules a three-week summer vacation to take her family to the Grand Canyon. In happy anticipation, she purchases a travel package in January.

In February, however, her elderly mother falls prey to a serious stroke. The worker asks for two weeks of FMLA time to care for her. When the worker returns, her employer gives her a check for two weeks of vacation pay and informs her that she has only one vacation week remaining. The worker complains that this will cause her to forfeit thousands of dollars. But Human Relations says the FMLA gives it an unlimited right to substitute.

Over the years, unions have grieved vacation substitution on the ground that it robs workers of their negotiated rest and recuperation period. Some succeeded because they’re under contracts giving employees exclusive control over vacation scheduling. But others lost because management retained a role. To make matters worse, some unions, such as the IBT in its national Master Freight and UPS agreements, have granted management an express right to substitute.

New Regulations

Days before President Obama took office, the Bush Labor Department made several changes in the FMLA regulations. For the most part, the new rules give employers more ways to harass employees. For example, drivers who take intermittent leaves can now be forced to submit detailed return-to-work reports.

Ironically, one of the changes may have the unintended effect of saving employees from having to burn their vacations.

Here’s The Scoop

Section 2612 of the FMLA allows employers to substitute “any of the accrued paid vacation leave, personal leave, or family leave of the employee” for any part of the 12-week FMLA period.

What does accrued mean? In a 1996 Opinion Letter (Number 81) the Labor Department explained that leave is accrued when “the employee has both earned the leave and is able to use the leave.”

In many cases, earned leave is not available leave. For example, in some workplaces, employees can only take vacations during certain months. In others, employees must schedule vacations several months in advance. In still others, employees may not take vacations for less than a week.

Before 2009 these restrictions did not affect substitution because FMLA regulation 207(e) provided that “no limitations may be placed by the employer on substitution of paid vacation or personal leave.” This meant, for example, that despite a company policy of restricting vacations to July or August, earned vacation leave would be “available” to an employee during an FMLA absence in February—and conversely that an employer could force substitution for the absence if the employee did not request it.

Section 207(e) Eliminated

In its 2009 changes, the DOL eliminated Regulation 207(e). It was replaced by a sentence in Regulation 207(a) providing that “An employee’s ability to substitute accrued paid leave is determined by the terms and conditions of the employer’s normal leave policy.” The DOL thought it was doing employers a favor by preventing employees from claiming vacation pay in certain instances. But if vacation leave is no longer available to the employee, it is no longer available to the employer!

These changes give unions a new way to argue against many instances of pay substitution, either in the grievance-arbitration process or in court. Even contracts expressly providing for substitution may have to give way under the principle (expressed in Regulation 700(a)) that where the FMLA provides better benefits for employees, it overrides the contract.

Weaker Rules at UPS and freight

UPS and freight workers will have trouble taking advantage of the new FMLA rule.

That’s because both the UPS contract and the National Master Freight Agreement expressly allow the employer to force a member to burn vacation time when they’re on FMLA leave. (The UPS Freight agreement does not give the company this power).

The union can still argue that Regulation 700(a) of the FMLA says that when FMLA provides better benefits for employees, it overrides the contract. But it will be up to the union and members to fight to get that protection.

Robert Schwartz is an attorney and the author of The FMLA Handbook, available at TDU.org for $20 plus $2 S&H.