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FEATURE STORY

Understanding FMLA

The Family Medical Leave Act of 1993 (FMLA) celebrated its 15 th birthday this month. The Department of Labor (DOL) is recognizing this milestone by proposing some potentially sweeping changes to the current law that will ease the burden on employers and help to better communicate the benefit to employees.

Signed by President Bill Clinton and largely supported by democrats and labor unions, FMLA was enacted to provide employment guarantees to a working population that was faced with the increasing demands of child rearing and parental care. The ‘Sandwich’ generation, as they have grown to be called, “are the nearly 16 million baby boomers now raising kids or supporting an adult child while giving a financial hand to an aging parent,” according to the Pew Research Center report. In 25 years that number will explode to 60 million Americans between the ages of 66 and 84, many needing some type of full or part-time care. The tide continues to come in as the children of the 75-million baby boomers become the second wave of ‘sandwich children’ dealing with these issues.

On the flip side, employers claim that FMLA is a heavy burden both financially and administratively to manage. In 2004, compliance cost employers a staggering $21 billion dollars according to an Employment Policy Foundation study. Furthermore, in a DOL survey, more than 30% of employers with more than 250 employees reported that intermittent leave had a negative impact on productivity. Under FMLA rules, covered employers must grant an eligible employee up to a total of 12 workweeks of unpaid leave during any 12-month period for one or more of the following reasons:

• For the birth and care of the newborn child of the employee;

• For the placement with the employee of a son or daughter for adoption or foster care;

• To care for an immediate family member (spouse, child, or parent) with a serious health condition; or

• To take medical leave when the employee is unable to work because of a serious health condition.

Since the law’s inception, employers have been urging the DOL to clarify the rules and reduce the burden of recordkeeping, saying that some employees have been abusing the system. Of special concern is tracking intermittent leave as it pertains to the type and duration of time off including half days and random hours during the workweek.

Care for a Military Member Leave

The DOL’s Wage and Hour Division recently published a Notice of Proposed Rulemaking for FMLA. That means potentially major changes are coming for this already confusing law. One amendment has already added to FMLA is Section 585 of the National Defense Authorization Act for 2008 on February 11, 2008. This section permits a “spouse, son, daughter, parent or next of kin” to take up to 26 workweeks of leave to care for a “member of the Armed Forces, including a member of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, or is otherwise in outpatient status or is otherwise on the temporary disability retired list, for a serious injury or illness.” This new addition to FMLA is in response to the growing number of Iraq War veterans who are returning injured and require family assistance during their recovery. The provisions in the NDAA providing this leave are effective at two different times.

• Event 1 – Leave During Family Member’s Active Duty involves leave for an employee who is experiencing a “qualifying exigency.” The definition of ‘Qualifying Exigency” is yet to be determined, but could potentially include times when a member of the military is called into active duty and the employee requires time to make childcare arrangements, or an employee is required to attend spouse meetings prior to a military family member’s deployment. This portion of the bill will not be effective until the Secretary of Labor issues the final regulations.

• Event 2 - Injured Service Member Family Leave covers employees who are the spouse, parent, child or next of kin of a service member who incurred a serious injury or illness while on active duty in the Armed Forces. This portion of the law is effective immediately.

In the interim, the DOL Wage and Hour Division will require employers to act in good faith in providing leave under the new legislation.

What is a Qualifying Employer?

Employers covered by FMLA include any person engaged in commerce or in any industry or activity affecting commerce, who employs 50 or more employees for each working day during each of 20 or more workweeks in the current or preceding calendar. Public agencies are also covered employers without regard to the number of employees covered and include public and private elementary and secondary schools.

Who is an “Eligible Employee?”

Employees deemed ‘eligible’ to request FMLA include those who:

• Have been employed by the employer for at least 12 months. These need not have been consecutive months. If an employee is maintained on the payroll for any part of a week, including any periods of paid or unpaid leave (sick, vacation) during which other benefits or compensation are provided by the employer, then the week counts as a week of employment.

• Have been employed for at least 1,250 hours of service during the 12-month period immediately preceding the commencement of the leave

• Is employed at the worksite where 50 or more employees are employed by the employer within 75 miles of the worksite.

Employees must provide their employer notification of FMLA 30 days in advance of date of leave if the event is foreseeable based on the expected birth, placement for adoption or foster care, or planned medical treatment of the employee or family member. If notice is not able to be given due to circumstances outside practical control of the employee, immediate notice must be given “as soon as practicable.”

What does all this mean?

Solid recordkeeping is needed in order to accurately assess eligibility for employees. The employer is also responsible for notifying eligibility qualifications to the employee prior to the anticipated date of leave. If you as the employer fail to provide this notification, then the leave will be deemed eligible by the Department of Labor regardless of actual qualification. The employer may not then, deny the leave.

Records you should keep:

While there are no ‘required’ records to be kept for FMLA, the DOL recommends that employers keep accurate computerized or hand written payroll records. They should be kept for a minimum of three years and can be requested by the DOL should an issue or complaint arise.

Your records must disclose the following:

• Basic payroll data

• Indentifying employee data including name, address, occupation, rate or basis of pay and terms of compensation, daily and weekly hours worked per pay period and total compensation paid

• Dates FMLA leave is taken by eligible employees and must be designated in the employee record as FMLA.

• If FMLA is taken but not in full days, the hours of the leave taken must be recorded.

• Copies of employee’s request for FMLA furnished to employer.

• Premium payments of employee benefits

• Records of any disputes between the employer and an eligible employee including reasons for the disagreement.

Changes Are Coming

The DOL has proposed several changes to the current FMLA law including:

• Ragdale v. Wolverine - Technical regulatory changes to reflect current law following the U.S. Supreme Court’s decision in Ragsdale v. Wolverine World Wide, Inc., which invalidated a penalty provision of the regulations. Ragdale ruled that the regulation’s “categorical” penalty, which in that case would have required the employer to provide an additional 12 weeks of FMLA-protected leave after the 30 weeks of leave the employee had already received, was inconsistent with the statutory entitlement to only 12 weeks of FMLA leave.

• Light Duty – the proposed rule clarifies that time spent performing “light duty” work does not count against an employee’s FMLA leave entitlement and changes the rules so that reinstatement rights are not affected by a light duty assignment either.

• Waiver of Rights – The DOL proposes to reinforce its longstanding position that employees may voluntarily settle their FMLA claims without court or DOL approval.

• Serious Health Condition – Revisions to the current open-ended definition of a “serious health condition” are being proposed including:

• A serious health condition involves more than three consecutive calendar days of incapacity plus “two visits to a health care provider.” The DOL proposes that two visits much occur within the more-than-three-days period of incapacity.

• Periodic Visits – proposed changes defines ‘period visits’ for chronic serious health conditions as at least two visits to a health care provider per year.

• Employer/Employee Notification – Possibly the largest ‘grey’ area of the current law, the DOL proposes an imposed increased notice requirement on employers in order to better enable employees to know and understand their FMLA rights.

• Time extensions for employers to send out eligibility and designation notices would be extended from two business days to five. Additionally, if an employer deems a medical certification to be incomplete or insufficient, the employer must return it to the employee within the specified time, specify in writing the deficiency, and then give the employee seven calendar days to correct the deficiency.

• Proposed modifications would require that an employee needing FMLA leave must follow the employer’s usual and customary call-in procedures for reporting an absence.

Senator Edward Kennedy (D-MA) has proposed that the thresholds for qualification be lowered to include employers with 15 or more employees. Others have proposed allowing employees to take three days off from work to participate in school-related activities; providing leave for issues related to domestic violence; include coverage for individuals who need time off to become organ donors and expanding those eligible to include grandparents, in-laws, domestic partners, adult children, and siblings.

While the proposed changes mentioned above are still only under consideration, the military care changes are already in effect. If you’re feeling confused about the current law, you’re not alone. Help is available. To learn more about FMLA and its potential impact on your small business, talk with a Fiducial Advisor today at 866-FIDUCIAL or visit the web site at www.Fiducial.com.