Leave of Absence Unemployment: Can Employees Collect Unemployment While on Leave?
HR teams frequently get the same urgent question when an employee starts a leave: can someone receive unemployment benefits during a leave of absence—especially during FMLA or a medical leave? The answer is usually “it depends,” because unemployment eligibility is driven by state unemployment insurance (UI) rules, but the analysis is heavily influenced by federal leave protections like the Family and Medical Leave Act (FMLA) and anti-discrimination requirements such as the Americans with Disabilities Act (ADA).
This SwiftSDS guide explains how leave of absence unemployment works in practice, when unemployment during FMLA may (or may not) be available, and how employers can stay compliant.
How Unemployment Eligibility Interacts With Leave of Absence
Unemployment insurance is primarily governed by state law, but most states share core eligibility concepts. In general, to qualify an employee must be:
- Unemployed or working reduced hours (depending on state partial UI rules)
- Able and available to work
- Actively seeking work (unless a state waives this for certain situations)
- Separated through no fault of their own (e.g., lack of work, layoff), not a voluntary quit without good cause
A typical leave of absence complicates these elements. If the employee is on leave because they cannot work (medical restrictions, recovery, caregiving demands that prevent work), they may fail the “able and available” requirement. But if the leave is connected to an employer’s reduction in work, job elimination, or the employer cannot accommodate a return, UI eligibility may become more likely.
For broader federal context on worker protections that often overlap with leave decisions, see SwiftSDS’s overview of the 5 rights of workers.
Unemployment for FMLA: The General Rule (And the Key Exceptions)
Why unemployment during FMLA is usually denied
The FMLA provides eligible employees up to 12 weeks of job-protected, unpaid leave (26 weeks for certain military caregiver leave) and requires continuation of group health benefits under the same terms. Because FMLA leave is taken when an employee is unable to work due to a serious health condition (or needs time for qualifying family reasons), many claimants are not “able and available” for work during the leave period—so states commonly deny unemployment.
FMLA compliance also includes employer notice obligations (Eligibility Notice, Rights and Responsibilities Notice, Designation Notice) and certification rules enforced by the U.S. Department of Labor (DOL), Wage and Hour Division. If you’re managing coverage and thresholds, SwiftSDS breaks it down in family medical leave act for small business.
When unemployment during FMLA may be approved
Even while FMLA protections apply, an employee might qualify for unemployment if facts show they meet UI requirements. Common scenarios include:
- The employee is medically cleared and able to work, but the employer has no work available, eliminated the position, or otherwise isn’t allowing a return.
- The employee is on intermittent/reduced schedule FMLA, and the state allows partial unemployment for reduced hours, provided the employee is able/available for additional work.
- The employee requests to return, but the employer declines reinstatement for reasons not permitted under FMLA (this can create both UI exposure and legal risk).
Because UI is state-administered, employers should treat “unemployment for FMLA” as a fact-specific determination and respond to the state agency with precise dates: leave start date, expected return date, whether work was available, and whether reinstatement was offered.
Location-specific rules and posters vary—start with SwiftSDS’s Federal (United States) Posting Requirements and then confirm the employee’s work location requirements (for example: Florida (FL) Labor Law Posting Requirements or Illinois (IL) Posting Requirements).
Unemployment Medical Leave: How ADA and “Ability to Work” Affect UI
Medical leave often conflicts with “able and available”
For unemployment medical leave questions, the “able and available” test is the main barrier. If an employee is out because a healthcare provider says they cannot work, UI typically won’t apply.
ADA leave and accommodations can change the story
The ADA may require reasonable accommodation, which can include additional unpaid leave beyond FMLA in some circumstances (when it’s not an undue hardship). If an employee could work with accommodations (modified duties, schedule adjustments, remote work where feasible), they may argue they are “able” to work—potentially supporting UI eligibility if the employer has no suitable work.
To align leave practices with ADA obligations, HR teams often standardize documentation and interactive process steps. SwiftSDS resources on ada hr and ada forms for employers can help you tighten process consistency and recordkeeping.
Compliance Checklist: What Employers Should Do When UI Is Filed During Leave
When an employee applies for unemployment while on leave, your response should be prompt, accurate, and consistent with your leave documentation.
1) Confirm the leave type and current status
Document whether the leave is:
- FMLA-designated
- A state paid leave (if applicable)
- An ADA accommodation leave
- A personal leave under company policy
If you operate in jurisdictions with additional leave protections (e.g., city/state layers), consider location-specific guidance like fmla nyc and fmla in utah.
2) Clarify “work available” and return-to-work options
State UI agencies commonly ask:
- Was work available?
- Did the employee refuse work?
- Is the employee still employed?
- What is the expected return date?
If work was available and the employee is not medically able to work, note that fact. If work was not available or the position ended, be clear—misstating separation reasons can trigger UI charges and broader employment risk.
3) Keep medical information confidential
Collect medical certifications and restrictions through compliant channels and limit access. For ADA-related info, maintain separate confidential medical files.
4) Watch misclassification and eligibility assumptions
If the worker is a contractor, they may not be eligible for FMLA protections at all, and UI classification can become contested. SwiftSDS covers a key threshold question in are contractors eligible for fmla.
5) Confirm poster and notice compliance
While there isn’t a single federal “unemployment during leave” poster, employers must still meet workplace notice requirements that frequently intersect with leave and pay issues. For wage/hour compliance (which often comes up when leave affects pay and deductions), maintain the required FLSA notice: Employee Rights Under the Fair Labor Standards Act.
If you have employees in Massachusetts and unemployment insurance communication is part of your compliance workflow, you may also need to display or distribute state UI information such as Information about Employees' Unemployment Insurance Coverage (MA).
Practical Examples HR Can Use
Example 1: Employee on continuous FMLA for surgery
- Employee is out 8 weeks and medically restricted from working.
- UI claim filed during leave.
- Likely outcome: UI denied (not able/available).
- Employer action: respond with dates, status as employed/on approved leave, and lack of medical ability to work.
Example 2: Employee medically cleared but job eliminated mid-leave
- Employee is cleared to return, but the role was eliminated in a reduction in force.
- Likely outcome: UI approved (able/available and separated due to lack of work).
- Employer action: document RIF rationale and communicate separation consistently.
Example 3: Intermittent FMLA reduces hours
- Employee uses intermittent leave 2 days/week.
- State allows partial unemployment depending on earnings and availability for other work.
- Employer action: confirm actual hours worked, pay, and whether additional hours were offered/available.
FAQ: Leave of Absence Unemployment
Can an employee collect unemployment during FMLA?
Often no, because many employees on FMLA are not able and available to work. However, unemployment during FMLA may be approved if the employee is able to work and the employer has no work available or the employee is not reinstated when eligible to return.
Does being on medical leave automatically disqualify unemployment?
Not automatically, but it frequently does. If the employee cannot work due to medical restrictions, states commonly deny UI. If the employee can work with restrictions and is available for suitable work, the analysis may change—especially if accommodations or alternative work are at issue.
What should employers say to the unemployment agency when a claim is filed during leave?
Provide factual information: leave approval dates, whether the employee remains employed, whether work was available, any return-to-work communications, and (where appropriate) that the employee was unable to work during the claimed period. Avoid sharing detailed medical diagnoses; stick to work capability/status.
SwiftSDS helps employers manage leave, postings, and multi-jurisdiction compliance. For additional compliance context tied to non-discrimination and protected leave decisions, review how as it pertains to employment opportunity the eeo strives to to prevent unequal treatment during leave administration.