Human Resource Blog

Vacation Pay while on TDI

I have an employee that is out on TDI starting 9/7/09. They do have two weeks vacation and one week sick pay that they have not used as of today. Can I pay them thier vacation and sick without delaying the TDI payments. They will most likely be out all of September and some of October.

We will assume that you are in New Jersey because you reference TDI, the New Jersey Temporary Disability Insurance. If you are in another state, please post a different question.

A New Jersey employee can use benefits like vacation and sick time to supplement TDI, to replace his or her usual income. However, if the total income (vacation +sick pay + TDI) in any one week is more than 100% of the employees usual wages, the TDI benefit is reduced or eliminated.

To put it another way, TDI replaces lost income when an employee is unable to work. An employee who collects vacation pay for the entire week has not lost any income, therefore is not entitled to any TDI benefits.

In practical terms, this means the employee may be able to supplement TDI by taking 1 to 3 days of vacation or sick leave per week. However, if the employee takes an entire week of sick leave, his or her income has been replaced, and the worker will not qualify for any TDI that week. The employee could under-report his or her earnings, but that would be fraud.