Posts Tagged ‘FMLA’

Employers, Use Caution When Dealing with Unpredictable FMLA Leave

Thursday, February 21st, 2013

FMLA leaveThe Family and Medical Leave Act (FMLA) is a topic on which many HR professionals are knowledgeable. Preparing for a situation that requires an employee to take FMLA leave isn’t a major problem if the time off was scheduled in advanced.

Robin Shea, attorney for Constangy, Brooks & Smith and writer of the Employment and Labor Insider blog, suggests that problems occur when an employee who’s in a critical-but-inflexible position (like a customer service representative) needs intermittent leave under the FMLA unexpectedly.

In her article, Employer’s Bane: Unpredictable FMLA leave. Is there a solution?, Robin empathizes with employers on the implications that unexpected leave can have on their business. She writes:

Where the absences are unpredictable, it’s impossible for the employer to plan, and because the employee’s position is critical, there is no way to “let things slide” until the employee is able to come back.

She acknowledges that dealing with intermittent FMLA leave is no walk in the park. However, Robin cautions employers from executing solutions that yield bad results like a lawsuit. She uses the example below to inform employers of the consequence of mishandling FMLA leave:

One seemingly logical solution to this problem is to say to the employee, “Look, we recognize your need for FMLA leave, but we really can’t handle frequent unpredictable absences in your position. So here’s what we’ll do. We will temporarily reassign you to another position that better accommodates recurring periods of leave. We’ll leave your pay and benefits unchanged. Then, when you’re able to come back to your old job and attend on a regular, predictable basis, we’ll put you back in that position.”

 “Sounds great — thank you! What’s the new job?” (employee)

 “Uh, men’s room attendant. It’s a non-essential position, so it will be immaterial to us whether you ever show up for work or not.”

 This rubs employee the wrong way, especially since she’s a woman. Employee goes to U.S. Department of Labor and files a complaint. You lose, because the “temporary reassignment” option applies only if the leave is foreseeable.

After revealing another failed attempt to deal with this HR headache, Robin points out that there isn’t much employers can do to protect themselves.

When Robin has a client that is in desperate need for a solution, she suggests “requiring the employee to take “block” leave but counting only the “necessary” time against the employee’s 12-week FMLA entitlement. Any other time can be covered by PTO or short-term disability or workers’ comp, or just regular pay, and it cannot be counted against the employee for FMLA or attendance purposes.”

She also says that employees have the option to “tough it out” and grant the employee time off on the terms in which he or she suggests. Robin acknowledges that these aren’t good options and ends her article by saying, An employer should be able to keep its business running when an employee has to miss a significant amount of work on an unpredictable basis. I wish the DOL would provide employers with some workable solutions that are legal. But I’m not going to hold my breath.”

What are your thoughts on this tricky HR issue?

Photo Source: Muffet

New FMLA Posters Must Be Up by March 8, 2013

Tuesday, February 19th, 2013

John GuptonIn CAI’s Monday member newsletter, Advice and Counsel Team Member John Gupton shared new regulations published by the US Department of Labor (DOL). The DOL issued a final rule implementing two important expansions of the Family and Medical Leave Act (FMLA):

  1. Provides families of eligible veterans with the same job-protected FMLA leave currently available to families of military service members, and it enables more military families to take leave for activities that arise when a service member is deployed.
  2. Modifies existing rules so that airline personnel and flight crews are better able to make use of FMLA’s protections.

The new FMLA rule implemented Congressional amendments to the FMLA permitting eligible workers to take up to 26 workweeks of leave to care for a current service member with a serious injury or illness. Congress also created qualifying exigency leave, which permits eligible employees to take up to 12 workweeks of leave for qualifying exigencies arising out of active duty or call to active duty in support of a contingency operation of a family member serving in the National Guard or Reserve. The final rule also includes amendments clarifying the application of the FMLA to airline personnel and flight crews. Until the amendments, many flight crews did not meet FMLA eligibility criteria due to the unique way in which their hours are counted.

In addition to the newest regulations, the DOL released a new FMLA poster. Employers covered by the FMLA must put up the poster no later than March 8, 2013. At CAI, we are in the process of revising our combined Federal poster for members. However, the updated poster will not be available for distribution to our members before the March 8, 2013 posting deadline.

For more information, including the new rule, a military leave guide, fact sheets and other materials, visit http://j.mp/13-fm. You can also call CAI’s Advice and Counsel Team at 919-878-9222 or 336-668-7746 to go over the FMLA updates.

Misclassifying Employees Can Have Unintended Consequences

Tuesday, February 14th, 2012

The post below is a guest blog from Joy Binkley who serves as the Principal, Health & Welfare Consultant for CAI’s employee benefits partner, Hill, Chesson & Woody.

The Internal Revenue Service (IRS) has announced a new, voluntary correction program that allows employers to reclassify employees who are currently misclassified as 1099 “independent contractors” when they should actually be reported as “W-2 paid” employees. Known as the Voluntary Classification Settlement Program (VCSP), employers who are not currently being examined by the IRS are allowed to eliminate years of past employment tax liabilities for “pennies on the dollar,” an amount equaling just greater than one percent of the wages paid to the reclassified workers for the past year.

For health and welfare benefits, employers will want to consider the compliance and contractual impacts to their plan. From a compliance perspective, it all starts with control groups and eligible employees. This impacts traditional regulatory issues such as COBRA, HIPAA, ERISA, FMLA and discrimination testing. When you add in the additional impact of healthcare reform, employers will need to consider the implications on provisions that apply to varying sizes of groups, such as “Pay or Play,” tax credits and medical loss ratios.

Of course, there is also the issue of repercussions that might be felt from employees that were previously misclassified and, as a result, were denied benefits.

From a contractual perspective, employers should be aware of the requirements the insurers or reinsurers impose. This might mean a re-rating of coverage if there are material adjustments to the covered population. With clearer definitions of employees and control groups, employers may want to tighten up their eligibility monitoring to prohibit unreported carve outs. As can be seen, all of this impacts more than just tax withholdings.

To read the expanded article, feel free to view our Eyes on Benefits monthly newsletter.

Tackling ADA and FMLA at the 2011 Triad Employment Law Update

Tuesday, December 6th, 2011

CAI hosted its annual Triad Employment Law Update at the Koury Center in Greensboro on November 9.  More than 150 HR professionals and company executives attended the conference to receive important updates on the latest developments in state and federal employment laws and regulations.

The sold-out conference featured presentations from law firm and conference partner Constangy, Brooks and Smith, LLP. Presentation topics ranged from correctly calculating compensable employee work hours to knowing how employees’ use of social media affects organizations.

Robin Shea, attorney and partner for Constangy and a conference favorite, presented information on two pertinent employment regulations: The Americans with Disabilities Act (ADA) and the Family Medical Leave Act (FMLA).

As a regular presenter at the Triad Employment Law Update, Robin says, “The conference is a great, cost-effective, and enjoyable way to ensure that your company is up to date on the latest developments in labor and employment law.”

Evaluations from the conference showed that guests enjoyed the speakers because they were knowledgeable, provided great information and kept them engaged. Multiple conference attendees commented positively on Robin’s presentation. She tried to keep her focus on the practical side of staying compliant while also making sure to entertain her audience. Knowing that employers have many questions related to ADA and FMLA, Robin avoided being overly legalistic and technical when she presented.

“Before the ADA Amendments Act (ADAAA) changes took effect in January 2009, the ADA had become almost a dead letter — it applied to such a narrow population of individuals that employers didn’t have to worry much about ADA compliance. Now that the definition of ‘disability’ has expanded so dramatically, the ADA has become extremely significant, and employers are rusty in applying it,” Robin said when asked why employers have so many questions related to the two acts.

She warns employers against punishing employees for absences that qualify as FMLA events 99.99 percent of the time. If a company does decide to take action for the remaining .01 percent, Robin suggests consulting an employers’ association or legal counsel beforehand.

Robin says the most important concept for understanding the ADA is that virtually every employee is “disabled” according to the definition found in the law.

“Be sure to consider all requests for reasonable accommodations. ‘Consider’ does not mean ‘grant,’ but do not reject any accommodation request out of hand,” she says about staying compliant.

Employers need to be aware of all the components that make up FMLA and the new ADA. Robin says that the federal government is looking for new test cases, so companies should handle these employee occurrences seriously and properly. She says that if you are not sure on what to do, ask for help before you do anything irreversible.

Constangy lawyers shared additional information on subjects important to employers. They also answered specific workplace questions from conference participants in the “Ask an Attorney” segment of the event.

“In our current regulatory and litigation climate, the value of this [conference] cannot be overemphasized” Robin says.

For more information on recent updates on FMLA and ADA or other employer related laws, please contact a member of CAI’s Advice and Counsel at 919-878-9222 or 336-668-7746. To get details on the next Triad Employment Law Update, please contact an account manager at the numbers above.

Photo Source: D. Begley

Lack of Attention to Extended Leave Policies Can Be Costly

Thursday, October 27th, 2011

The post below is a guest blog from Jenn Hargiss who serves as a Client Coordinator for CAI’s employee benefits partner Hill, Chesson & Woody.

You offer a more generous leave policy than the Federal requirements of the Family Medical Leave Act (FMLA).  Big deal, right?  While this may not sound like anything unreasonable, does your health insurance carrier or reinsurance (stop-loss) vendor agree with your decision to allow employees to continue coverage outside of COBRA under your company health plan for an extended period of time?

Medical Insurance Carriers and reinsurance carriers follow strict federal guidelines, especially with FMLA and COBRA.  If an employer allows an extended leave period, including health plan coverage continuation (Non-COBRA) after the 12-week (or 26 week) FMLA maximum has been exhausted, then the employer loses the protection of the group health plan and reinsurance policies.  In essence, the employer just became fully self-funded; paying all the medical claims incurred under the terms of the medical plan after FMLA was exhausted for each individual.  Ouch! 

If claims are incurred, an employer may end up with many very large, unbudgeted claims and legal expenses.  Plus, an untimely offering of COBRA continuation after the fact may not satisfy the health insurance or reinsurance carrier contract provisions and certainly opens up the employer for expensive COBRA rights violations.

Take action to avoid finding your company in an unfavorable legal and financial position:

  1.  No policy is a bad policy.  What is the company policy?  Understand when health benefits are supposed to end to avoid a dispute should the employee not return to work at the end of the leave.  Not only should the health contracts be reviewed, but also dental, vision, life and disability.
  2. Check your policies, procedures, and handbooks.   Make sure the company is not making promises to continue coverage that doesn’t coordinate with the health insurance and reinsurance contracts.  Make it clear when coverage ends and when COBRA coverage will begin.
  3. Negotiate with the health insurance or reinsurance carrier to amend the contract and add the appropriate language around continuation of coverage after exhausting FMLA if the policy is more generous than Federal Regulations require.
  4. Review contracts annually.  Make sure when changing carriers, the policy is submitted for approval and the new contract is updated with the appropriate language.

The EEOC’s 5 Warnings about Medical Leaves and the ADA

Tuesday, October 11th, 2011

The post below is a guest blog from Robin Shea who serves as Partner for Constangy, Brooks & Smith, LLP, CAI’s Partner for the 2011 Triad Employment Law Update.

Leave of absence as a reasonable accommodation under the Americans with Disabilities Act is a smokin’ hot subject these days, particularly in light of the ADA Amendments Act and its regulations, which expand the ADA’s coverage to a dramatically larger population, the “new,” more activist U.S. Equal Employment Opportunity Commission (EEOC)  under Chair Jacqueline Berrien, and two recent multi-million-dollar settlements in leave-of-absence lawsuits brought by the EEOC against Sears, Roebuck & Co. and Supervalu, Inc. (Jewel-Osco).

John Hendrickson, the EEOC’s Regional Attorney for Chicago, said that these settlements contained five lessons for employers, and that’s what I’d like to talk about today because Hendrickson’s points are consistent with warnings we’ve been giving to employers for quite some time.

1. An “inflexible period” of leave will not satisfy ADA requirements. Most of the employers I’ve worked with have very generous leave of absence policies — one employer I know offers up to two years of leave for a single medical condition (and possibly more, if the employee contracts a new condition). However, many policies provide for “automatic” termination if the employee’s leave exceeds the designated period of time.

Nunh-unh, no can do, says the EEOC.

If the employee needs, say, two years plus two weeks, but then will be able to return to work, you have to consider granting that additional two weeks.

Or, if the employee can come back but needs reasonable accommodations (including reassignment to a vacant position), you have to consider allowing the employee to come back in the new capacity.

And when I say “consider,” I mean, seriously. I mean, if you decide to say no, you’d better have a darned good reason.

Your next question may be, Well, if our leave is so generous and we still have to do all this when an employee has been out of work (and probably receiving disability benefits or workers’ compensation), then why on earth do we want to offer so much leave in the first place? And my answer to that would be, Good question, and a point that was made by an employers’ lawyer who testified at the EEOC hearing. You can shorten the “maximum leave” under your policy, as long as you comply with the requirements of the Family and Medical Leave Act. (You should check applicable state laws, as well.)

2. “Appropriate leave” requires an “individualized assessment” when the designated leave period expires, if not before. See #1. The “individualized assessment” would include determining whether the employee needs additional leave beyond the official company maximum, and whether the employee can come back to work with a reasonable accommodation.

Many employers still require employees returning from medical leaves of absence to be “100 percent recovered,” or able to return to work without restrictions. These requirements have arguably violated the ADA from the get-go (in my opinion, they have), but there is no question that they should be scrapped in our modern era. If an employee has restrictions, the employer is supposed to assess whether the employee can return to work with a reasonable accommodation. If not, then it may be ok to terminate. But if so, then the employer should allow the employee to return to work.

And, have I mentioned that “reasonable accommodation” includes reassignment to a different vacant position?

3. Keep your friends close, and your leave administrator and ADA decisionmaker closer. Many employers outsource leave administration to a third party. Meanwhile, the person making decisions on ADA accommodations is usually someone in Human Resources, in consultation with the employee’s supervisors and managers, and possibly legal counsel.

This is a fine arrangement, as long as the leave administrator stays in close contact with HR or legal counsel, and knows how to identify potential ADA issues. (Which should be a cinch now that virtually everyone on an extended medical leave qualifies for ADA coverage.)

That said, third party administrators, or even in-house leave administration “specialists,” should almost never be the ones to terminate an employee for hitting the maximum allowable leave. A best practice would be for the leave administrator to refer these employees to Human Resources or legal counsel for an ADA assessment. The decision to terminate, extend leave, or bring back to work with or without reasonable accommodations should be made by HR/Legal in consultation with the appropriate operations management.

4. Ya gotta talk to the employee. The reasons for this rule are too numerous to mention. From a pure morale standpoint, it’s always good to stay in touch with an employee on medical leave because it makes the employee feel that she’s still “part of the family” and makes return to work that much easier. But just in case these warm and fuzzy reasons aren’t enough to satisfy you, allow me to use more persuasive methods. (Imagine Dr. Evil laugh here. Mwahahaha.)

Many jurisdictions require that the employer and employee conduct an “interactive process” when discussing possible ADA accommodations, and the EEOC takes this position as well. The “interactive process” is fancy-lawyer-talk for having a discussion with the employee (ideally, face-to-face, but phone or email will suffice if the employee can’t come in) about possible reasonable accommodations. In these jurisdictions, the failure to engage in the interactive process is an ADA violation in itself.

Even in jurisdictions like mine, which do not require an interactive process, failing to engage in the process means that the employer “assumes the risk” if there is an accommodation that might have worked but was missed because the employer didn’t talk to the employee.

For these reasons, I strongly recommend that all employers, no matter where they are located, discuss directly with employees their reasonable accommodation options and get the employee’s suggestions. (Employers with unions will, of course, have to include the union representatives in these discussions.)

5. Better get used to being sued by the EEOC. The agency believes that private plaintiffs’ attorneys will not usually have the resources to be able to pursue these “systemic” discrimination cases involving automatic terminations at the end of medical leaves. 

So, to paraphrase all those spam email jokes that we love so much, you may be a defendant in an EEOC lawsuit if

*You have a “100%-recovered/no restrictions” requirement for return from a medical leave of absence;

*You automatically terminate employees who reach their maximum leaves without making “individualized assessments”;

*You delegate all of your medical leave terminations to your third-party administrator, or your benefits administrators; or

*You don’t engage in “the interactive process” before automatically terminating employees who reach their maximum leaves.

(Sorry that wasn’t the least bit funny. Hey – just like the spam email jokes!)

Generally speaking, the EEOC is a formidable plaintiff. Unlike private plaintiffs’ attorneys, the agency does not have a strong economic motivation to settle cases early and inexpensively. They’ll serve you with aggressive written discovery and requests for documents, and they’ll want to take everybody’s deposition. They’ll file motions and fight every motion that your side wants to file. They dig “systemic” cases, where they can get large verdicts or settlements that they can post on their “Newsroom” web page. This is not to say you can’t beat them, but most employers will prefer being in compliance to being a test case.

Forewarned is forearmed, as they say.

CAI’s 2011 Triad Employment Law Update, scheduled for November 9 at the Koury Center in Greensboro, will provide additional information for staying compliant with FMLA and ADA regulations.  The conference will also provide news and material on several legal topics relevant to employers, including Wage and Hour, Workers’ Comp Reform, FLSA and Immigration. Register today at www.capital.org/triadlaw.

Ten Things N.C. Employers Need to Know About Independent Contractors and Joint Employment

Tuesday, December 14th, 2010

Gretchen Ewalt from the Ogletree Deakins law firm shared her expertise on Employee Classification (Employee or Independent Contractor) and Joint Employment at CAI’s October members-only Ask the Expert. Participants left the sessions with a number of recommendations that, if implemented, will limit their organization’s exposure to costly litigation and potential penalties.

Below are some of the points covered in these sessions.

1. Independent Contractor Tests. There are a number of factors considered by the IRS and the USDOL in determining if a worker is an independent contractor or an employee.  A brief description of a true independent contractor is as follows:

  • The employer does not control the means and manner of how a project is performed, only specifying the expectations of the end result.
  • The “contractor” has a viable business concern, having the opportunity to make a profit or suffer a loss, and provides the same services to other employers.
  • The “contractor” absorbs expenses incurred during the project.

2. Penalties for Misclassification. Penalties for misclassifying an employee as an independent contractor include state and federal tax liabilities, as well as back pay for wage and hour overtime violations.

3. Conduct Internal Audits. It is recommended that periodic internal risk analysis audits be conducted to ensure that independent contractors are properly classified.

4. Draft Independent Contractor Agreements. Contracts for independent contractors should be drafted by legal counsel establishing expectations by both parties to clearly show that the independent contractor relationship exists.  Language also needs to be included stating that the contractor waives and relinquishes any rights to the client’s benefit plans and that the contractor agrees to comply with all business/industry standards.

5. Educate Managers and Supervisors. Managers and supervisors should know the difference between an employee and an independent contractor and understand the liabilities incurred due to misclassification.

6. Definition of Joint Employment. A condition where an individual is providing services that jointly benefits two or more employers.

7. Joint Liability. Employers that utilize employees from an outsourcing agency can be held liable along with the agency for complaints filed by those employees with state and federal regulatory bodies.

8. Time Credited for FMLA. The time spent by an outsourcing agency’s employee providing services to a client employer is credited toward FMLA eligibility if that employee is employed as a regular employee by the client employer.

9. Outsourcing Agreements. Agreements with outsourcing agencies should be carefully drafted by legal counsel to ensure that the agency is responsible for taxes, insurance, business licenses and all employment matters, including employee training, disciplinary actions, compensation/benefit programs and maintenance of personnel files.

10. Contract with Reputable Agencies. Make sure that your outsourcing agency complies with all applicable laws and specify such compliance in the outsourcing agreement.  Ensure that their personnel policies/procedures are sound and that their managers are well equipped to effectively deal with agency employee complaints.

If you have questions about employee classification or joint employment, please contact a member of CAI’s Advice and Counsel team at 919-878-9222 or 336-668-7746.

Photo Source: University of Waterlo

Seven Things About FMLA and Other Leave Rights that N.C. Employers Need to Know

Thursday, November 25th, 2010

One of the more challenging compliance issues for employers is managing family and medical leave and other leaves of absence, and knowing when to safely terminate employment. Kimberly Korando with Smith Anderson law firm guided CAI members who participated in the recent members-only “Ask the Experts” sessions on the interplay of company leave policies, the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act of 1990 (ADA), the ADA Amendments Act of 2008 (ADAA), and North Carolina’s Retaliatory Employment Discrimination Act (REDA).

Following are some of the practical takeaways from this session:

1. REDA and ADAA have different requirements.

North Carolina’s REDA law allows employers to have a consistent termination policy that applies across the board regarding workers’ compensation leave.  The ADAA requires a case-by-case evaluation when an employee needs extended leave to determine if a reasonable accommodation can be made (consistency is not applicable).

2. Review policy language on FMLA eligibility.

Be sure that your employee-eligibility statement for FMLA includes all of these requirements:  employed for at least 12 months; worked 1,250 hours over the previous 12 months; and works at a worksite with at least 50 employees within 75 miles.  According to Ms. Korando, if the policy leaves out any of the criteria, you may be required by the courts to grant FMLA even if the employee is not eligible.

3. Consider the different requirements of FMLA and ADA on return to work.

FMLA requires an employer to return the employee to the same or an equivalent position.  ADA requires the employee’s return to the original position.  This is extremely important to remember when the employee is covered by both the FMLA and ADA, and the employee returns before the end of the FMLA (unless he or she is unable to perform the original position with or without reasonable accommodation).

4. Document the interactive process.

Court cases provide employers with tips on the court’s expectations of how they should handle the ADA process.  One “nugget” Ms. Korando gleaned was that the courts expect employers to document the interactive process and what was considered and discussed with the employee regarding reasonable accommodation and/or undue hardship.

5.   Check third party vendor letters.

If you have agreements with vendors that stipulate automatic termination of temporary employees if they are unable to work, include the statement unless other action is required by applicable federal or state law. There are joint employment responsibilities under FMLA and ADA.

6.   Indefinite leave is not a reasonable accommodation in North Carolina.
The 4th circuit court has said that it is unreasonable to expect an employer to hold a job or consider other jobs or extended leave when the employee’s doctor states the employee will be on leave indefinitely.  The employee can be terminated if this is the case (after completion of eligible FMLA leave).

7.   End of leave communications.

Communicate with the employee by documenting in writing a summary of the leave dates, type, etc.  Include the last day worked, the dates of FMLA and the date job reinstatement responsibilities ended, extended leave or other reasonable accommodations made, and the date of termination.

If you have questions about FMLA or other leave rights, please call a member of CAI’s Advice and Counsel team at 919-878-9222 or 336-668-7746.

Photo Source: Michael

Revisions to the Family and Medical Leave Act: Everything You Need to Know

Tuesday, August 17th, 2010

As the definition of family in America has changed over the years, so have the U.S. Department of Labor’s terms about who qualifies for the Family and Medical Leave Act (FMLA). The department’s revision on June 22, 2010 to its definition of sons and daughters has extended coverage for certain employees with up to 12 weeks of unpaid, job-protected leave per year to include caretakers of a newborn, newly adopted or ill or injured child.

By caretakers, the revision means more than just parents with biological or legal connections to a child are eligible under the FMLA. Now aunts, uncles, step parents, lesbian-gay-bisexual-transgender (LBGT) parents and any others entrusted with care of a child are covered. In essence, any employee who assumes the responsibility of caring for a child receives parental rights to family leave.

While this may appear to be a huge change to employers, your company may not be affected by it. Remember the following fact about the FMLA: Employees are eligible for leave only if they have worked at least 1,250 hours over the past 12 months for their employer, and they work at a location where the company employs 50 or more employees within 75 miles of the workplace.

If your company meets these qualifications, it would be a wise step to update all employees about this expanded benefit, so that your staff realizes what is happening and why more workers may now be eligible to take time off. A quick review about the FMLA can prevent confusion for you and your employees on this issue and its impact on your office. Some businesses may not have to go to such measures if they already have extended unpaid leave to non-married and/or nontraditional parents.

Keep in mind as well that this benefit most likely will not result in major upheavals or workload problems for a majority of companies. In today’s economy, most employees are reluctant to take up to three months unpaid leave unless absolutely necessary for their child’s welfare.

There have been other updates to FMLA since it took effect in 1993. CAI will keep you informed of future ones as they occur.

For more details on the FMLA, please call a member of CAI’s Advice and Counsel team at (919) 878-9222 or (336) 668-7746.

Photos Source: storyvillegirl