Paying the company back

GLC · July 2002

We have an employee on FMLA. Our vacation time accrues monthly. We have a policy that says you can borrow the full amount of vacation that you would accrue in a year...20 days. The employee did that to cover for her FMLA time off. If she does not return to work which it is looking highly likely, can we legally ask her to pay us the amount she received for that borrowed vacation time since she did not actually earn it because she was not at work?

On the other hand, if she returns to work and at the end of the year, she still owes us, could we ask her to write us a check for the payback instead of taking it out of her paycheck. My thinking is if we deduct from her paycheck for this, it could jeopardize her exempt status.

Don D · July 2002

My thought is that it will not jeopardize her exempt status. It may hoave other implications in some states. With FMLA, there are certain time charges and deductions allowed that are normally not allowed under FLSA. I've seen on this forum that many states have regulations about the treatment of payment for leave accrued and taking deductions from final paychecks. Unless a MS lawyer wants to say otherwise, if it were in this state, and the person borrowed their future leave and left, I would try my best to deduct it somehow from a paycheck, if that's possible. I do think that a signed agreement should be in place to this effect anytime this comes into play. That's a very ee friendly policy you have there.

Rockie · July 2002

I'm not sure you could deduct anything from her paycheck without her authorization. Depends on your state laws. SC does not allow garnishment of wages, except in very few instances.

This is the danger of allowing employees to borrow future time off. You have no guarantee of the length of time they are going to be at your place of employment and once they are gone, the employer is the loser.

scraft · July 2002

I believe your vacation policy needs to include a clause that (1) informs the employee that if time off is in excess of time accrued, the employee understands that this is considered owed to the company should they leave and and must be pay back and (2) that they authorize the company to deduct from their final pay, in accordance with applicable State law.

You need to check you state law that you can do this.

If you have not informed your employee or have a signed acknowledgement, you should not deduct anything from their final pay.

We included this clause on our time-off approval form with an employee acknowledgement that they sign.

On a second note, an employee on FMLA is on a leave of absense. Why would they be eligible for any benefits? Are they eligible for holiday pay and are they still accruing time-off?

Don D · July 2002

A person on FMLA cannot be denied any benefit to which they would have otherwise been eligible had it not been for the FMLA event.

cindyp · September 2002

I know this is a rather old thread but I just found it. CFR825.215(d)2)which states"An employee may, but is not entitled to, accrue any additional benefits or seniority duriing unpaid FMLA leave. Benefits accrued at the time leav began, however, (e.g., paid vacation, sick or personal leave to the extent not substituted for FMLA leave) must be available to an employee upon return from leave" To me this means that whatever vacation or sick was on the books at the beginning of thier leave will still be there when they return, provided we don't make them use it during FMLA. But they do not accrue any additional time during their absence. What about Holiday pay? I don't see that specifically addressed. We haven't been paying anyone off on LOA or FMLA for Holiday pay.

Don D · September 2002

The key in your quote is the word "additional". Additional benefits, no. But, she is entitled to the 'same' benefits she would have otherwise enjoyed. We do pay people for holidays while on FMLA if they otherwise would have been paid. It's my understanding this is what the law requires.

Paying the company back

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