Human Resource Blog

HR/EEO

Need information regarding HR/EEO Rules for when an employer places the employee on unpaid leave. What are the employers obligations for payment of any accrued vacation leave?

Unpaid leave is just that — unpaid. Normally an employee is placed on unpaid leave as a disciplinary measure. Hourly employees may also be placed on unpaid leave while the employer investigates a charge or a complaint against the employee. There is no law that requires the employer to pay an hourly worker during such an investigation.

There is not any law that requires you as an employer to pay an employee who is on unpaid leave, or to allow the employee to use accrued vacation time during this leave. Some collective bargaining agreements may have such a provision in place.

In every state, an employer can dictate when an employee may use vacation time or paid leave. The employer is under no obligation to grant paid leave to an employee who has been suspended.

Several states including California require that an employee be paid for unused vacation at termination. However, even in those states, the employee is not entitled to the payment until he or she is terminated. While the employee is on unpaid leave, he or she is still employed.

The only EEO / discrimination issues that arise would be if the company unfairly enforces this rule. For example, if the employer allowed Asian employees who had been suspended to use vacation, but did not permit African American employees to do the same, that would be illegal discrimination. However, the employer can deny paid vacation to every employee on unpaid leave or suspension.

Different rules apply when an employee takes FMLA. The current FMLA regulations require that employees be permitted to use paid sick leave while on FMLA. In addition, employees are entitled to use paid vacation, but only “in accordance with company policy” while on FMLA. If you require employees to request paid vacation 8 weeks in advance, you can require that an employee on FMLA request vacation 8 weeks in advance.