Must an employer continue to provide fringe benefits to employees who are out on sick leave, disability leave or workers' compensation leave?
Author: Michael C. Jacobson, XpertHR Legal Editor
Probably not. In the vast majority of cases, fringe benefits like paid time off (PTO), compensation for unused, accrued vacation or sick days, and other benefits are not required. Rather, the employer provides these benefits to employees by choice. The exception to this rule is if the employer has contracted with a specific employee or group of employees to provide such benefits, in which case, the employer would be contractually obligated to provide the benefit. Without such a contract, employees are generally not entitled to a "double-benefit" or windfall while receiving workers' compensation payments and medical benefits, for example.
For a fully comprehensive answer to this question, employers should familiarize themselves with the legislation relevant to the leave employees have taken. Thus, if an employee is out on FMLA leave, for example, employers should familiarize themselves with the FMLA before removing benefits. Further, employers should also familiarize themselves with the concept of creating express or implied contracts with employees for benefits and the circumstances under which an implied contract may be created inadvertently. Finally, employers should check the corresponding state sections to ensure there are no state regulations pertaining to fringe benefits for employees out on leave.