At this time of year, between voluntary leave for holiday travel, work holidays, and the potential for FMLA -- there's a lot to take into account in regards to time off. FMLA regulations state that if a holiday takes place during a full week taken as part of FMLA leave, the whole week is considered FMLA. On the other hand, if the FMLA leave is used as less than one week, the holiday is still a holiday and does not count against the FMLA entitlement, unless the employee was scheduled to work on the holiday.
FMLA does not require that employees be paid on FMLA, but employees may use their paid vacation or other paid leave time, such as sick and personal time during the unpaid FMLA time. This is a decision made by the employee. However, if an employee decided not to substitute, their employer may require them to substitute their own paid leave for unpaid FMLA if their policies require it.
Obviously, calculating FMLA leave and making these decisions can be complicated. There may be situations in which an employer exploits their policies in order to coerce their employees to use their leave. If an employee feels that they have not been able to appropriately use the leave they are entitled to, or faced retaliation or harassment due to their use, there may be legal options open to them.
FMLA was enacted to protect and assist employees who face medical and family circumstances, and employees are entitled to their time.
Source: Human Resources Online, "Calculating FMLA leave during the holidays," Susan Schoenfeld, Nov. 29, 2012