Employers are often asked whether employees continue to earn paid time off while taking FMLA leave, and the answer is not always straightforward. Because the FMLA itself does not dictate how PTO should accrue, the responsibility falls entirely on the employer’s policies and how those policies interact with paid and unpaid leave. This lack of federal direction can create confusion for employees and HR teams alike, particularly when businesses use multiple accrual systems or when employees transition from paid to unpaid status during their leave. Understanding how these pieces fit together is essential for maintaining compliance and ensuring that accruals are administered consistently.
How PTO Accrual Policies Interact With FMLA Requirements
The core principle employers must understand is that FMLA is an unpaid leave entitlement, but it does not alter an employer’s existing rules on how paid time off is earned. If PTO accrues only when an employee works a certain number of hours or receives paid time, then PTO typically does not accrue during unpaid FMLA leave. Conversely, if the employer has a tenure-based or calendar-based accrual system that awards time regardless of hours worked, then PTO may continue during FMLA. The FMLA neither requires nor prohibits accrual; it simply expects employers to apply their policies uniformly.
This is where many compliance mistakes begin. Employees sometimes assume FMLA guarantees continued accrual, while employers may inadvertently apply different standards depending on the situation. FMLA requires that employees on protected leave be treated the same as employees on comparable non-FMLA leave. If PTO does not accrue during unpaid personal leaves or unpaid medical leaves outside of FMLA, then it cannot accrue during unpaid FMLA either. The consistency rule is the safeguard ensuring FMLA users are neither disadvantaged nor granted additional benefit beyond what policy allows.
The Impact of Paid Leave Running Concurrently With FMLA
Many employers require employees to use paid leave concurrently with FMLA, which can temporarily change the employee’s accrual status. If an employee is using PTO, sick leave, or any other paid benefit while on FMLA, and accruals normally continue during paid absences, then those same accruals must continue during the paid portion of FMLA. The determining factor is not the FMLA designation but whether the employee is considered in paid status during that time. This common overlap underscores why employers must clarify when and how paid leave transitions into unpaid leave.
Challenges arise when employees exhaust their paid time off and move into fully unpaid FMLA. The shift can interrupt accruals, and if this is not communicated clearly, employees may return to work surprised by their updated PTO balances. Employers who proactively explain how accruals change at each stage of the leave create a more transparent and predictable experience. This also protects the organization by ensuring employees cannot claim they were misinformed about how PTO would earn during their absence.
Ensuring Consistency With Comparable Non-FMLA Leave
The most important compliance requirement is that accrual rules for unpaid FMLA leave match those for any other unpaid leave under company policy. If the organization does not grant PTO accrual during unpaid administrative leave, unpaid suspension, or unpaid personal leave, then it must handle unpaid FMLA leave the same way. Problems arise when different types of unpaid leave are treated inconsistently. Inconsistent treatment may lead to claims that the employer interfered with FMLA rights or treated the employee unfairly for taking protected leave.
This challenge is most common in organizations where policies have evolved over time or where multiple departments manage leave differently. Employers who keep accrual policies aligned across all categories of leave significantly reduce the risk of errors or claims of discriminatory treatment. Many companies use structured leave administration tools, including platforms supported by AbsencePlus, to ensure that FMLA decisions align with how other unpaid leaves are handled. This consistency becomes especially important when an employee files a claim or questions their accrual history.
How Payroll Systems and HR Platforms Affect Accrual Accuracy
Even when policies are written clearly, payroll and HR systems can accidentally create discrepancies in accruals. Systems that are configured to accrue time based solely on paid hours may automatically stop awarding PTO once an employee transitions to unpaid leave. However, if policy dictates that accrual continues based on tenure or other criteria, system settings must be updated to ensure they reflect the written rules. When system logic and policy language do not match, employers risk inconsistent treatment that can become problematic if challenged.
Additionally, leave coding errors within HR platforms can affect accrual outcomes. When employees switch between paid and unpaid leave during an extended FMLA period, the system may miscalculate accruals unless the proper status codes are applied at the correct times. For this reason, organizations benefit from periodic audits of their HRIS and payroll accrual logic. Ensuring accurate coding prevents overpayments, protects the organization from disputes, and reinforces trust when employees return from leave and review their time-off balances.
Communicating Accrual Expectations Before Leave Begins
Employees generally appreciate clarity, particularly when navigating stressful medical circumstances or family emergencies. Employers can avoid confusion by outlining accrual expectations before the leave begins, explaining whether accruals continue during paid leave, pause during unpaid leave, or vary depending on tenure rules. This explanation can be included in leave approval letters, onboarding materials, policy handbooks, or interactive process conversations initiated when an employee requests FMLA.
Communication is not merely a courtesy, it is also a form of legal protection. Employees who understand how their PTO will accrue are less likely to challenge decisions or file claims alleging unfair treatment. Transparent communication also minimizes administrative disputes when employees return and discover their PTO balance has changed. When organizations take a proactive approach to explaining accrual rules, they create a stable environment where employees feel informed and employers remain protected.
PTO Accrual on FMLA Depends on Policy and Consistency
Whether PTO accrues while an employee is on FMLA ultimately depends on the employer’s established policies and how consistently those policies are applied across all comparable types of leave. FMLA itself does not dictate the answer; it simply requires fairness and uniformity. Employers who align their policies, systems, and communication practices create a predictable and compliant leave experience that benefits both the organization and its workforce.
