Paid Leaves of Absence FAQ

June 14, 2018

Should we withhold PERA contributions from paid leave time taken to supplement workers’ compensation benefits that an employee receives?

Yes. The 2013 law change did not alter the rules relating to reporting payments for leave time taken by members who are on a workers’ compensation leave. The 2013 law change only applies to medical leaves, personal leaves, paternity leaves and military leaves of absence.

Where are the PERA definitions of medical, personal, and parental leave?

PERA law does not define these types of leaves. Generally, PERA will look to the employer’s policies or to applicable bargaining agreements for definitions of these leaves.

Is military leave defined in state statute for PERA purposes?

Yes. It is in Minn. Stat. § 353.01 Subd. 16(a)(8).

We have an employee who has a short-term disability policy that will provide payments equal to 60 percent of her gross pay while she is on maternity leave; therefore, she wants to draw pay from our agency during the leave that is equal to 40 percent of her normal wages. Her biweekly earnings average $1,600 for 80 hours. While on leave, we will issue her payroll checks of $640 and she will use 32 hours of accrued sick time. Are we to withhold PERA from the pay of $640?

No. The $640 is less than 50 percent of her normal biweekly pay of $1,600 and is based on 32 hours of sick leave usage rather than the 80 hours the employee normally worked. The amounts paid to the employee during the leave period are not PERA-eligible salary.

If an employee goes out on an unpaid leave of absence on the 2nd day of a pay period, are the earnings for that pay period subject to the 50% or 100% threshold test?

No. The salary threshold only applies to leaves of absence with pay. This employee is drawing wages for two days of actual work and then has no pay for the remainder of the pay period. All of the employee’s pay is subject to PERA deductions.

If an employee returns to work from a leave on the last day of a pay period, are the earnings for that pay period subject to threshold test?

No. The wages or salary earned by the PERA member after his or her return to work following a leave are subject to mandatory PERA contributions.

An employee who normally makes $800 biweekly asks to go on a personal leave and receive $200 biweekly for the full period of the leave. If we agree to this arrangement, will the pay she receives be subject to PERA contributions?

No. If you allow the employee to spread out her leave accruals in order to draw biweekly pay of only $200, rather than her normal $800, the compensation you pay to her during the leave period will not be subject to PERA contributions.

If an employee goes out on a medical leave to care for a sick relative, is the salary threshold for the paid leave 100% of regular wages, even if the member is using sick leave?

If the policy of your entity considers this to be a medical leave for which the employee may use sick leave, PERA will recognize that leave classification and the medical leave pay will have the 50% minimum salary requirement.

If a PERA-covered employee will be absent without pay for only a few days in a pay period are PERA contributions required on the pay the person receives?

PERA deductions are required on the earnings that an employee has based on work performed in a pay period. Having unpaid days off during a pay period does not affect the eligibility of the wages that the employee earns in that pay period.

We have an employee using a combination of hours worked, PTO, and unpaid intermittent FMLA in the same pay period. The proportions vary each pay period. The person is using up the PTO earned each pay period but it isn't enough to cover all the time away from work so the balance is unpaid FMLA. How do we treat the employee’s pay?

As long as all available PTO is being used by the employee each pay period, the associated paid time off is salary for PERA purposes. All of the employee’s pay for hours worked and PTO must be reported to PERA with deductions.

Does the salary threshold (50% for medical leaves) apply for a FMLA leave? Bear in mind that two members could have identical medical conditions and one could qualify for FMLA and the other may not due to various reasons.

If you as the employer consider an employee’s absence to be a medical leave, the 50% salary threshold will apply.

If a pay period contains some unpaid suspension days is the remaining pay still subject to PERA contributions?

Yes. Pay for actual hours worked by a member is subject to PERA withholdings.

The 2nd Quarter 2013 PERAphrase states that a lump-sum donation of unused vacation, sick or personal leave to another employee under a benevolent leave donation program is not PERA-eligible salary. Does this mean that the ‘receiver’ is subject to PERA contributions when the hours are used, and the ‘giver’ is not subject to contributions when the hours are donated?

Yes, that is correct.

How do members earn or purchase service credit for a leave of absence period?

PERA-covered employees will receive service credit while on a leave of absence with pay from which contributions are made to PERA. Members also earn service credits if, while drawing workers’ compensation benefits, they receive salary on which contributions are being made to PERA. Often, additional service credit may be purchased for complete calendar months in which the member did not pay PERA contributions. These purchases are described in the Building Service Credit brochure.