Payroll Articles
Family and Medical Leave Act
One of the major pieces of social legislation to be enacted during the 1990s was the Family and Medical Leave Act (FMLA). In general, the FMLA guarantees Employees (in workplaces with 50 or more Employees) 12 weeks of unpaid leave in a year to be with a newborn or newly adopted child, to take care of a seriously ill child, spouse, or parent, or to care for themselves if they are seriously ill. The law also guarantees continuation of Employees' health benefits while on leave.
Employer and Employee coverage. The FMLA applies to private sector employers with 50 or more Employees, including part-timers and Employees on leave or suspension, but not laid-off Employees. The definition of Employee is the same as that under the Fair Labor Standards Act. An Employee at a facility with less than 50 Employees may still be eligible for the leave benefits if the employer has at least 50 Employees working within a 75-mile radius of the facility. Public sector (government) employers are also covered by the FMLA, with each state or political subdivision of a state considered a covered public agency. A public sector Employee is eligible for leave benefits if the public agency has 50 Employees working within a 75-mile radius of the Employee's worksite.
COVERAGE LOOPHOLE While all employers with 50 Employees are covered by the FMLA, an Employee is not eligible for leave benefits if fewer than 50 Employees are employed by the employer within 75 miles of the Employee's worksite when leave is requested. Therefore, it is possible for an employer to have several hundred or thousand Employees who are ineligible for leave even though the employer is technically covered by the FMLA (e.g., a fast food chain with 40 stores, each employing 30-35 Employees, and no store is within 75 miles of another, would have no eligible Employees).
To be eligible for leave benefits, Employees must also have been employed by the employer for at least 12 months (not necessarily consecutively) and have worked at least 1,250 hours within the previous 12-month period. "Hours worked" are determined on the same basis as under the Fair Labor Standards Act, and exempt Employees who have worked for the employer for at least a year are deemed to have met the 1,250-hours requirement unless the employer can prove otherwise. The federal courts have ruled that an Employee's accrued vacation time can be used to complete the 12-month employment requirement, but that work hours lost by an Employee that were later compensated after successful pursuit of a grievance did not count as hours worked in meeting the 1,250-hours requirement. The Department of Labor has issued guidance on the FMLA eligibility of reemployed members of the military in light of their entitlement under the Uniformed Services Employment and Reemployment Rights Act (USERRA) to the same rights or benefits they would have had if they had remained continuously employed. The DOL said that, in determining whether a military veteran meets the FMLA eligibility threshold, the months actually employed and the hours actually worked for the employer must be combined with the months and hours that would have been worked during the 12 months prior to the start of the requested leave but for the military service.
EXPATRIATES ARE NOT COVERED The FMLA applies only to Employees who work within the U.S. or any of its territories and possessions. Employees who are employed in foreign countries are not counted for purposes of determining employer coverage or Employee eligibility.
Types of leave guaranteed. Eligible Employees are entitled to 12 weeks of unpaid leave within 12 months after the birth of a child or the placement of an adopted or foster child. They are also entitled to 12
weeks of unpaid leave within a 12-month period to care for a child, spouse, or parent with a "serious health condition", or because of the Employee's own serious health condition that makes it impossible for the Employee to continue working. It is up to the employer to decide what constitutes a 12-month period (e.g., calendar year, fiscal year, year beginning on Employee's anniversary date). If the employer fails to make its decision clear, the 12-month period applied is the one most favorable to the Employee. Where both spouses are employed by the same employer, they are entitled to a total of 12 weeks leave to care for a newborn or newly adopted child or a seriously ill parent. They are each entitled to 12 weeks leave to care for a sick child or the other spouse.
CALIFORNIA TO REQUIRE PAID FMLA LEAVE California is the first state to provide workers with paid family and medical leave. Beginning July 1, 2004, eligible Employees can collect up to 6 weeks of wage replacement benefits (about 55% of their salary) during a 12-month period for taking time off from work to care for a seriously ill child, spouse, parent, or domestic partner, or for the birth, adoption, or foster care placement of a child. The new benefits will be funded entirely by Employees through increased contributions to the state disability insurance (SDI) fund, beginning January 1, 2004.
Employer can require Employee to take leave.
A federal district court ruled there is nothing in the FMLA that prohibits an employer from requiring an Employee to take unpaid leave if the Employee has a serious health condition that makes him unable to perform the functions of his position. The court said that guaranteeing an Employees right to ask for such leave does not prevent the employer from putting an Employee on FMLA leave in this situation.
Serious health condition defined. Under final regulations interpreting and implementing the FMLA, a serious health condition is an "illness, injury, impairment, or physical or mental condition", involving inpatient care in a health care facility (including any period of incapacity or subsequent treatment related to the inpatient care) or continuing treatment by a health care provider. The continuing treatment generally must involve a period of incapacity (e.g., inability to work or attend school) of at least three consecutive calendar days (not workdays) and includes subsequent treatment by or under the supervision of a health care provider. Continuing treatment that can be initiated without a visit to a health care provider, such as the taking of over-the-counter medicine, bed rest, drinking fluids, or exercise, does not qualify as continuing treatment for purposes of FMLA leave. Treatment also does not include routine physical, dental, or eye examinations. Exceptions to the three-day requirement for a period of incapacity include treatment for chronic conditions (e.g., asthma or diabetes) or any incapacity caused by pregnancy or for prenatal care.
WHAT ABOUT THE FLU? While at first glance it may not seem that the flu is the type of illness Congress had in mind when it passed the FMLA, at least two federal appeals courts have ruled that the flu can be a "serious health condition" entitling an Employee to the protection of the Act. In each case, the court found that the broad definition of "serious health condition" does not exclude the flu where the Employee is unable to work for at least 3 days and is being treated by a health care provider.
Intermittent leave. An Employee who needs to take leave because of an illness suffered by the Employee or the Employee's child, spouse, or parent on an intermittent or occasional basis may do so. This may be done by taking off several days or weeks at a time or by working reduced hours. Intermittent FMLA leave taken as reduced hours may be deducted from an exempt Employee's salary without converting the Employee into a nonexempt Employee under the FLSA
Designation as paid or unpaid leave. Employers can require eligible Employees to use any paid vacation, personal, sick, medical, or family leave as part of the 12-week guaranteed leave. Under the regulations, the employer must make its designation of leave as paid or unpaid FMLA leave known to the Employee within 2 business days of receiving notice from the Employee that a leave will be taken or having enough information to make the decision. In any event it cannot make the decision after the leave has ended unless the Employee was absent for an FMLA reason and the employer did not learn of the reason until the Employee returned to work, or the employer has been unable to confirm that the leave qualifies under the FMLA. The employer's notice to the Employee that leave is being designated as paid or unpaid FMLA leave may be oral or written. If the notice is oral, it must be confirmed in writing by the next payday (or by the following payday if the first payday is less than a week after the oral notice is given). The written notice may take any form, including a notation on the EmployeeTs pay stub. A separate section of the regulations provides that, if an employer does not designate leave taken by an Employee as FMLA leave, the leave does not count against the Employee's FMLA leave entitlement. However, the U.S. Supreme Court said this part of the regulation was invalid because it gives certain Employees more than the 12 weeks of leave guaranteed by the FMLA. In that case, the Employee was given 30 weeks of unpaid leave with 6 months' paid medical benefits, and she was discharged when she didn't return to work after the leave period ended. She claimed she was entitled to another 12 weeks of FMLA leave because her employer had not designated any part of the 30-week leave as FMLA leave, but the Court said such a penalty would not comply with the intent of Congress to require employers to provide 12 weeks of leave in a 12-month period and would be disproportionate to the $100 fine contained in thelaw for notice violations.
Notice requirements for Employees. When an Employee requests leave to care for a newborn or newly adopted child, he or she must give the employer 30 days' notice or as much as can be given under shorter notice period, the 30-day notice period does not apply.the circumstances. The same requirement applies to leave because of serious medical conditions where the medical treatment is foreseeable. Unforeseen medical events require whatever notice is possible under the circumstances. If the required notice is not provided, the employer can deny the leave request for up to 30 days after notice is provided, but only if the event making the leave necessary was clearly foreseeable. If an employer's benefit plan, a state law, or a collective bargaining agreement allow for a
Benefits continue during leave. Health insurance benefits the Employee enjoyed before the leave must be continued during the FMLA leave on the same basis. For example, if the Employee was required to pay part of any health insurance premiums before the leave, the employer can require the payments du during the leave. Changes to the plan occurring during the leave apply to the Employee on FMLA leave e.g., increased premium charges or co-payments). Employees who fail to pay can lose their coverage after 30 days, unless the employer's plan contains a longer grace period, but coverage must be restored when they return to work.
Before dropping the Employee from coverage, the employer must provide written notice to the Employee that the payment has not been received, at least 15 days before coverage will be ceased. Coverage may be ceased retroactively to the payment due date if the employer's health benefit plan includes such a provision. If an Employee does not return to work after an FMLA leave for any reason other than the continuation or onset of a serious illness (or some other reason beyond the Employee's control), the employer may act to.recover any health premiums it paid on the Employee's behalf during the leave. An Employee must be back at work for at least 30 days before being considered to have "returned to work" If the Employee uses paid leave, premiums are paid under the method normally used during any paid leave.
Job guarantee upon return from leave. Employees returning from leave are entitled to their previous job or one that is "equivalent" with no loss of pay or benefits accruing before the leave (with a limited
exemption for highly paid Employees). The Employee is not entitled to accrue any benefits or seniority during an unpaid FMLA leave, but any pay or benefit increases or improvements that do not depend on seniority must be made effective upon the EmployeeTs return to work. Also, leave time, whether paid or unpaid, must be treated as continued service under pension and retirement plans for vesting and qualification purposes. An employer may deny reinstatement to "key Employees" if it is necessary to prevent "substantial and grievous" economic injury to the employer's operations. A key Employee is an Employee paid on a salary basis who is among the highest paid 10% of all the Employees within 75 miles of the Employee's worksite when the FMLA leave is requested. An employer contemplating a denial of reinstatement must tell the Employee when leave is requested that the Employee is a key Employee and what will happen if the employer determines that the Employee's reinstatement would cause the employer serious economic injury. The employer must notify the Employee in writing of its determination as soon as it is made, either in person or by certified mail.
Recordkeeping requirements. In general, the FMLA requires employers to keep basic payroll records
regarding hours worked, rate of pay, and Deductions from wages, as well as records detailing the dates and amount of FMLA leave taken and copies of notices and documents related to FMLA leave. The records must be provided to U.S. Department of Labor officials on request.
Enforcement. The FMLA is administered and enforced by the Department of LaborTs Wage and Hour
Division, which can investigate complaints brought by Employees. Employees may also sue employers to
recover lost wages and benefits as well as for reinstatement and promotion. Successful Employees are entitled to additional liquidated damages (equal to the actual damages) unless the employer acted in good faith when it violated the FMLA, plus attorneysT fees, expert witness fees, and court costs.
State Employees' right to sue.
Despite the express coverage of state and local government employers in the FMLA, several federal appeals courts had ruled that Employees could not sue their government employers because of the states' immunity from lawsuits under the U.S. Constitution. In 2003, however, the U.S. Supreme Court upheld the Employees' right to sue after finding that Congress had properly tailored the protections and remedies of the FMLA to correct the effects of longstanding unconstitutional discrimination against women by all employers, including state and local governments.
Individual supervisors can be sued.
A federal district court ruled that the definition of an "employer" subject to suit under the FMLA includes individual government Employees. The court said the definition of employer includes both individuals and public agencies, so it must include individuals in public agencies, although it acknowledged that there is a split among the courts on this issue.