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FMLA Regulations and Workers’ Compensation Laws: Overlapping Complexities

The Family Medical Leave Act (FMLA) regulations can be difficult to follow. Mix in some workers’ compensation laws and things can get really complicated. FMLA protects the employment status and health benefits of an individual for up to 12 weeks under certain qualifying criteria. Workers’ compensation provides benefits and wage replacement to employees who suffer job-related injuries and illnesses. It is possible for FMLA and workers’ compensation to run concurrently when an employee misses work due to an on-the-job injury that qualifies as a serious health condition. This can be any illness, injury, impairment or physical / mental condition that involves inpatient care or continuing treatment by a healthcare provider.

Employers often have a difficult time navigating FMLA regulations and workers’ compensation laws when the two intersect. Furthermore, failure to satisfy notification requirements could lead to costly violations. We’d like to answer some frequently asked questions to give employers a better understanding of this complex subject.FMLA Regulations

Question 1
Can an employer require an employee to substitute accrued paid leave if the employee is receiving both workers’ compensation and FMLA benefits?
Since workers’ compensation is considered paid leave, the FMLA provision for paid leave substitution does not apply. FMLA regulations further preclude employees from relying on the substitution to insist upon receiving both. If the employee’s workers’ compensation indemnity payments cease on concurrent leave (i.e., rejection of light duty), then an injured worker could elect (or even be required) to substitute with accrued paid leave. It is important to follow company policies, as some require both short-term disability and workers’ compensation claimants to use up their paid time off (PTO) when on FMLA. This is at the employer’s discretion, but FMLA regulations do not mandate a substitution for paid workers’ compensation leave.

Question 2
What benefits is an employee entitled to while on concurrent workers’ compensation and FMLA leave?
An employee will continue to receive health coverage benefits as if no leave has been taken. They may also be entitled to additional benefits while absent based on employer policies.

Question 3
How can an employee on concurrent workers’ compensation and FMLA leave pay for group health benefits and other non-health Benefits?
Employers are responsible for making payment arrangements before leave or shortly thereafter. If an employee is on extended workers’ compensation leave, a plan should be established to place them on COBRA status after the 12-week FMLA period. Benefit providers should be consulted to review the definition of “active employee” within the employer handbook and the benefit plan design. If coverage is continued for these employees, employers could be at risk for an uncovered claim in their stop-loss layer. If denied, this could become a costly self-insured claim due to the employee not qualifying as “active” by policy definition.

Question 4
How can an employer question the adequacy of a medical certification?
This process typically mandates that the communication chain originate with the employee and their physician. For clarification on the certification process for concurrent FMLA and workers’ compensation files, employers can contact treating physicians.

Question 5
Is an employee required to return to a “light duty” job when it is not the same or equivalent job?
An employee may decline an offer for light-duty substitution. However, they may lose workers’ compensation indemnity payments as a result. They can remain on protected, unpaid FMLA leave until it is exhausted. Employers can require them to use accrued PTO, or an employee may also elect to use this during leave.
If an employee accepts a light-duty offer in lieu of FMLA leave, they retain the right to their original position or an equivalent position at the end of FMLA leave. The time they are working their light-duty assignment does not count against the FMLA leave entitlement.

Question 6
What happens to an employee on concurrent workers’ compensation and FMLA leave once the FMLA leave entitlement has run out?
If an employee is unable to return to work or is still on light duty after the leave expires, FMLA protections no longer apply. The employee should defer to workers’ compensation statutes or the Americans with Disabilities Act (ADA) for further protections, if applicable.

More Questions?
Understanding and complying with FMLA regulations and workers’ compensation laws when they overlap is critical. Failure to do so could jeopardize your company, as well as the best interests of your employees. This is a complex issue that will generate questions beyond the scope of this article. We encourage you to contact the risk management experts on our Property & Casualty Team for in-depth guidance on this topic.

This article originally appeared in the 2018 | ISSUE THREE of the SilverLink magazine, under the title “Overlapping Complexities: FMLA Regulations and Workers’ Compensation Laws.” To receive a complimentary subscription to the SilverLink magazine, sign up here.

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