WHITEPAPER Presagia s FMLA Guide Second Edition
CONTENTS Introduction... 3 Who and What Qualifies Under the FMLA... 4 Qualifying Employer... 4 Qualifying Employee... 5 Qualifying Leave Reason... 5 Entitlement... 5 Notice Requirements... 6 Amendments to Consider... 7 The NDAA... 7 The AFCTCA... 7 The DOL Final Rule 2013... 8 Common Mistakes... 9 Implementing FMLA for Compliance... 11 NOTICE Copyright Presagia 2013. All rights reserved. Presagia is a registered trademark. The Presagia logo is a trademark of Presagia Corp. Other trademarks identified in this document are the property of their respective owners. Information provided within this guide is not intended to be used as legal guidance. Legal counsel should always be consulted when considering or implementing changes to leave processes and policies. 2
Introduction The Family and Medical Leave Act (FMLA) was designed to provide job protection while offering employees up to 12 work weeks of unpaid leave annually. Geared towards public service and private sector employees who work for larger employers, the FMLA's goal is to enable employees to balance work and personal obligations in a manner that also accommodates the interests and needs of their employer. Since its inception in 1993, the FMLA has been amended several times to expand the Act s offerings to a more diverse group of employees across the country. While two subsequent acts were signed into law, not all components took effect and many elements still needed clarification years later, so the Department of Labor (DOL) announced their Final Rule for military families and airline flight crews on the Act s 20th anniversary, February 5, 2013. We ve incorporated these amendments into this Second Edition of Presagia s FMLA Guide, expanded on existing sections and added up to date statistics and facts in order to provide a comprehensive overview of the FMLA. Let s begin with a look back at how this historic act came to be. In 1984, the federal government rejected a California law which would have required employers to provide maternity leave to female employees. The Family and Medical Leave Coalition was subsequently born, spearheaded by the Women s Legal Defense Fund looking for a gender neutral law to protect workers with family and medical issues across the nation. The federal law was introduced to Congress in 1985 and then resubmitted every year until finally being passed in both 1991 and 1992 but was vetoed both times by then president George H. W. Bush. During his presidential campaign, Bill Clinton promised to sign the FMLA into law and did so just 16 days after his inauguration on February 5, 1993. The FMLA went into effect exactly six months later. Fast forward 20 years and employers are still struggling to identify what it is and what it is not. Although the Act provides very detailed descriptions of the provisions, it is often difficult for employers to recognize and appropriately respond to FMLA events. Due to these challenges, employers routinely misconstrue and incorrectly implement the legislation and its protections. Employers who fail to recognize or address FMLA events correctly are at risk of the Act s enforcement provisions. Since the cost of non-compliance can be staggering, not only in terms of litigation costs and penalties, but also in terms of lost productivity, revenue and reputation, it is becoming more important than ever for employers to enhance their compliance efforts. Employers often struggle with interpreting what is and is not a qualifying FMLA absence, in part because of overlapping state leave legislation 3
and their own company policies. Over the years there have been many high profile cases against employers for leave and disability compliance violations where the employee or employees have won multi-million dollar settlements. For this reason alone, employers should increase their efforts to understand the FMLA. The objective of this guide is to help employers have a deeper understanding of the FMLA by: Defining the terms used in the FMLA Explaining important amendments, as well as the DOL s Final Rule Identifying common mistakes and misconceptions Providing employers with a structured approach to building an FMLA best-practice compliance strategy Through a better understanding of the law s definitions and the ability to recognize common mistakes, employers will be armed with the knowledge and tools to properly manage the FMLA. Who and What Qualifies Under the FMLA One of the reasons many employers face challenges when managing FMLA is that they do not fully understand the definitions set forth by the Act about who and what qualifies as FMLA. Fundamentally, for the FMLA to apply, the employer, the employee and the leave reason must all qualify, and the employee must have entitlement. In this section we overview the basic requirements of what constitutes an FMLA leave. Qualifying Employer While the requirements may seem simple enough at first glance, employers must be absolutely sure where they fit and be aware of their responsibilities. Organization size is one of the most basic requirements needed to obtain qualification. A qualifying employer is one that has at least 50 employees. These employers have an obligation to display the FMLA poster in the workplace even though a specific worksite must have more than 50 employees in a 75 mile radius for employees to qualify for FMLA. This is referred to as the Who Qualifies? Almost 60% of all workers qualify to take an FMLA leave The FMLA has been used 100 million times since being passed 50/75 rule or the Small Worksite Exception. So while employers with less than 50 employees are not required to provide FMLA benefits, if an employer has 30 employees in one location and another location with 20 employees within 75 miles, the company does qualify and so do their employees. 4
Qualifying Employee In addition to working for a qualified employer, a qualifying employee must have worked for the employer for 12 months, have worked 1,250 hours in the last year and currently work at a qualified location. While 12 months is a necessary component of what determines eligibility, the Act states that it does not have to happen consecutively. Employee service can be accumulated over a seven year period, but it is the employee who has the responsibility to prove service beyond an employer s records, typically three years. Qualifying Leave Reason The Act is specific in regards to the nature and type of reason that qualifies for FMLA: Birth and bonding of the employee's child, within one year of birth Placement with the employee of a child for adoption or foster care, within the last 12 months Care of an immediate family member (spouse, child or parent) who has a serious health condition For the employee's own serious health condition A military qualifying exigency To care for an injured servicemember Entitlement Employee entitlement refers to the period of time an employee is protected under the Act. The general FMLA entitlement for an employee is 12 work weeks per year or up to 26 work weeks per year to care for For more information about pregnancy leave related to the FMLA and specific state laws, download Presagia s U.S. Pregnancy Leave Guide: A State by State Look at Pregnancy Leave Legislation an injured service member. Additionally, there are special entitlement provisions for airline flight crews and military exigencies. FMLA leaves can be taken in continuous blocks of time or intermittently. Intermittent leaves can be taken in full or partial days and can be tracked down to the minute, the actual increment is determined by the shortest increment used for your other leave policies but in any case cannot be greater than one hour or more than the employee has actually taken. Qualified employees can have multiple intermittent FMLA leave cases open at the same time and can even have both continuous and intermittent leave cases. Qualified employees can also be covered by the FMLA for a reduced schedule or light duty work. This situation can be as simple as moving an employee from full time to part time for a period of time, in which the employee s missed hours are counted against their FMLA entitlement. Remember though that employees who accept a voluntary light duty assignment but are working their normal hours cannot be deducted FMLA. For more information about intermittent leave, download Presagia s FMLA Intermittent Leave Guide. 5
Notice Requirements FMLA requires that an employee be informed of their rights and responsibilities under the Act, both in general employee communications and more specifically in response to a request for leave. Once an employer is notified of an employee s need for leave they must respond by indicating whether the employee is eligible within five business days. Further the employer must state if they need additional information to make a leave determination. A best-practice here is to provide a correspondence package that includes: A cover letter acknowledging the leave request The eligibility notice (typically the DOL Form WH-381) A list of additional documentation or requirements needed to complete the assessment of the request A copy of any medical certification required by the employer (typically the DOL Form WH-380) After an employee s need for leave has been fully assessed, employers are required to issue a designation notice with information regarding their request for leave. As a best-practice, this package typically consists of: A cover letter explaining which leave policies were approved, the entitlement available to the employee and the entitlement estimated to be used for this leave A formal designation notice The rights and responsibilities of the employee on FMLA leave Information about any conditions regarding benefits, return from leave requirements, and any other information relevant to the employer s leave policies Tip: If an employer has a policy in place requiring advance notice for leave and an employee is requesting a leave that is deemed foreseeable, but had not provided sufficient advance notice, the company may have the right to deny the leave. However, it is often safer to explain the situation to the employee and offer them the option to postpone the start of their requested leave to meet the notice requirement rather than simply issuing a denial. To qualify for medical leave under the FMLA, the leave must be considered a serious health condition and it is an employer s right to request a medical certification in order to support the need for leave. The most widely used form is the DOL s WH-380E which an employee would ask their healthcare provider to complete. It is the dates specified by the healthcare provider, not the dates requested by the employee, which become the dates of the leave. Employers must provide employees a minimum of 15 days to submit their medical certification, although many grant extensions if the deadline is missed. Upon receipt of the medical certification, employers have five business days to review and respond. 6
If a medical certification comes back incomplete or unclear, employers can send a deficiency notice granting the employee more time, generally at least a week, to correct the deficiency either by resubmitting the form or by providing permission for the employer representative to communicate directly with the employee s healthcare provider. If there is reason to doubt the original certification, employers can choose to request a second opinion, and even third if the first two differ. These can be from the healthcare provider of the employer s choice and are at their expense. It is of the utmost importance to adhere to the notice timelines set forth in the FMLA because an employer who meets all other requirements of the Act, but fails to provide proper and timely notice of eligibility or any other notices, may still be in violation of the Act. Amendments to Consider The NDAA At the beginning of 2008, President Bush signed into law the National Defense Authorization Act (NDAA) which added two new qualifying FMLA leave reasons for military families. The qualifying exigency leave allows for eligible employees with a spouse, child or parent in the National Guard or Reserves to take up to 12 weeks of leave for qualifying reasons related to active duty or a call to duty. The NDAA also enacted the military caregiver leave providing eligible employees up to 26 weeks of leave to care for an injured or ill servicemember. In 2010 the NDAA was amended to expand these offerings to employees with family members in the regular Armed Forces. It also added deployment to a foreign country as a requirement for all qualifying exigencies. At the same time, the 2010 amendments expanded what qualified as a serious injury or illness, allowing the caregiver leave to include servicemembers with previously known injuries or illnesses that were evident before and aggravated during active duty which render them unfit to perform their duties. Protection for veterans was also added for the first time and for them a serious health condition was defined as an injury or illness that took place, or worsened, during active duty. The AFCTCA In December 2009 the Airline Flight Crew Technical Corrections Act (AFCTCA) was signed into law to amend the FMLA, this time establishing special eligibility requirements for airline flight attendants and flight crew members. Due to the fact that airline flight crews have their hours calculated based on their in-flight hours only and did not account for any hours spent working while on the ground, most airline flight crew members schedules did not meet the 1,250 hours worked requirement of the FMLA. The AFCTCA includes these workers by allowing them to meet the requirements if they have fulfilled 60 7
percent of their monthly guaranteed hours and if they have worked or been paid for not less than 504 hours during the previous 12 month period. The AFCTCA did not amend any of the other FMLA requirements outside of hours worked. The DOL Final Rule 2013 While both the NDAA and the AFCTA were passed by Congress, effective dates were left unclear. In fact, some changes had no effective date and others were effective immediately, making implementation of the amendments highly problematic for employers. To resolve this, on February 5, 2013 in conjunction with the Act s 20th anniversary the DOL issued a Final Rule fully implementing all of the amendments changes and making certain clarifications to be effective as of March 8, 2013. Some NDAA-related highlights and additions include: While the NDAA 2010 amendment included covered veterans, the Final Rule clarified that the provision does not take effect until March 8, 2013. Therefore, any leave to care for a veteran provided by employers prior to this date would be considered voluntary and as such cannot be counted against an employee s FMLA entitlement. A veteran was defined as someone discharged or released under conditions other than dishonorable, within a five year period prior to the date the military caregiver leave begins. A serious injury or illness of a covered veteran was also defined and as one of the following: o A continuation of an injury or illness that happened or worsened while the veteran was a member of the Armed Forces which rendered them unable to perform their duties; o A physical or mental condition for which they received a U.S. Department of Veterans Affairs Service-Related Disability Rating (VASRD) of 50 percent or greater; o A physical or mental condition related to their military service that significantly impairs their ability to work or would do so without treatment; o A physical or psychological injury for which the veteran is enrolled in the Department of Veterans Affairs Program of Comprehensive Assistance for Family Caregivers. The amount of time an employee can take under a qualifying exigency leave related to a servicemember s Rest and Recuperation was increased from five to 15 days. 8
A new qualifying exigency category was established to allow eligible employees to take leave for certain activities related to the care of a servicemember s parent who is incapable of self-care. These activities have to arise from the servicemember s deployment or upcoming deployment. The employee taking the leave does not need to be related to the servicemember s parent however the servicemember must be the spouse, parent or child of the employee taking leave. Healthcare providers authorized to certify current servicemembers or veterans injuries or illnesses now include healthcare providers that are not affiliated with the military. Employers may request a second opinion for medical certifications from non-military healthcare providers but the Final Rule maintains that certifications from military associated healthcare providers may not be subjected to second opinions. Some AFCTA-related highlights include: The Final Rule entitles airline flight crew members to 72 days of leave during any 12 month period for one or more FMLA qualifying reasons. The 72 (12 days more than regular FMLA) days was based on a six day workweek for all airlines flight crew employees regardless of how much time they actually work. Employers must track FMLA in increments of no greater than one day for airline flight crew members, regardless of whether the leave is continuous, intermittent or reduced schedule. New record keeping requirements were established for employers. They must record and keep all documents that specify the monthly FMLA guarantee for each category of employee. Employers are also advised to record the hours worked and paid for each employee. For more information about the Final Rule, the DOL has published an FAQ page on their website. Common Mistakes Even when a company feels comfortable handling the basics, it is not surprising that the complexities of the Act mean mistakes are not only easy to make, but are also quite common. Understanding and avoiding the following common mistakes can protect both you and your organization: 1. Providing more generous FMLA-like benefits and calling them FMLA One of the most common mistakes employers make when managing FMLA is to provide benefits that are more generous than FMLA, while continuing to call them FMLA. While there is nothing in the FMLA legislation saying you can t grant leave benefits beyond what the law requires, employers need to be aware that additional benefits must be treated as organization-specific leave policies, not as extensions of FMLA. For example, some small employers grant FMLA leave before they meet the 50 employee requirement. These leaves cannot be counted against an employee s FMLA and furthermore, if the employer then becomes eligible, employees must be provided their full entitlement as if they had not taken any previous leave. 9
2. Poorly communicating documentation and notice requirements FMLA protection is an employee right, yet the employee is only required to provide sufficient information to allow their employer to determine applicability. The evaluation and delivery of FMLA is entirely an employer s responsibility. The FMLA provides strict notification requirements for the employer. The Act also stipulates guidelines for advance notice and supporting documentation requirements. When employers adhere to proper and fair documentation and notice policies, the FMLA provides them the option of denying a request for leave if sufficient notice or complete documentation is not provided within the pre-established timeline. An essential piece of this is that employers put in place a transparent policy for these communications, apply them consistently across their workforce, and track each point of contact. FMLA Non-Compliance Costs Managers and supervisors were individually sued and held personally liable for paying damages for the first time in 2010 (Narodetsky v. Cardone Industries Inc.) 3. Failing to identify a request for leave as FMLA FMLA qualifying leave reasons must be considered for all leave requests, even if the employee does not specifically ask for FMLA. There are many cases in which an employee will request a leave under other policies, such as workers compensation or short-term disability. In these cases, if the qualifying events meet the FMLA criteria of a serious health condition, that leave is usually FMLA qualifying and should be managed as such. In this situation, the FMLA leave should be tracked concurrently with the other leaves that have been requested and are approved. Complying with this requirement is difficult, as employers need to be able to identify FMLA qualifying leave reasons and events even if they are outside the normal FMLA reporting process. Critical to achieving this is centralized intake or better integration and awareness between the disability, workers compensation and other teams. 4. Failing to understand the interplay between the FMLA and the ADA You must also remember that employer obligations may exist under the Americans with Disabilities Act (ADA) even if there are no FMLA obligations. If an employee with a disability requests a leave but is denied due to ineligibility or lack of entitlement under the FMLA or other policies they may still qualify for leave as a reasonable accommodation. Under the ADA, leave and flexible or even parttime work schedules may be required if they do not pose an undue $11.65 million awarded to Schultz v. Advocate Health & Hospitals Corp., for being unfairly penalized for taking time off to care for aging parents More than $6.2 million awarded to current and former SBC employees in Dudley v. SBC Communications for being subjected to illegal leave policies $6,011,190 in class complaint against Verizon for denying or failing to approve leave requests on time and unlawful termination of employees $722,000 awarded to Dotson v. Pfizer, Inc., for violating an FMLA intermittent leave for adoption and being wrongfully terminated during such leave $665,000 awarded to Knussman v. Maryland for being denied FMLA leave for the birth of a child 10
hardship to the employer. This can apply if an employee with a disability comes back from an FMLA leave but needs more time and has exhausted their entitlement. The key to ADA reasonable accommodation cases is an effective and interactive process to explore potential accommodations for employees with disabilities. It should also be noted that the ADA Amendments Act (ADAAA) of 2008 dramatically expanded the ADA s definition of disability resulting in even more temporarily disabling conditions now triggering accommodation obligations. Ranking of FMLA Challenges to Organizations Rated as Extremely Challenging Tracking intermittent time previously taken Tracking intermittent time during leave Interacting with ADA and ADAAA Transfering employees to alternative positions Obtaining second and third medical opinions 61% 58% 48% 47% 40% 2012 Employer Leave Management Survey DMEC/Spring Consulting, January 2013 Implementing FMLA for Compliance The companies most successful at managing the FMLA know that the key to compliance is a consistent and equitable application of the law backed by clear and accurate documentation. This is very hard to achieve if you use paper and Excel spreadsheets to manage leave, or have a decentralized leave team with each member using their own processes and letters. To be consistent and equitable, you need the right mix of processes and systems in place to standardize your approach and continually monitor it to ensure it is being followed properly. When you attain this goal, you not only support compliance, you also increase the customer service provided to your own employees to create a happier, healthier and more productive workforce. In this section we will provide some guidelines for implementing your own FMLA compliance strategy. 11
Educate the front-line Provide clear, accessible guidelines and procedures for employees and supervisors to help them correctly identify and administer FMLA events. Employees need to know their FMLA rights and responsibilities and should have easy access to this information. This should be initially communicated in employee handbooks upon hiring and redistributed whenever changes or additions are made. Employees also need a simple way to request leave and make inquiries, such as for their FMLA entitlement balance. Supervisors are the people on the front lines with employees and should understand their role in the leave process. It is important to provide them with simple explanations of their role and tools to help them guide employees through the process. This may be a software tool that enables them to request leave on behalf of an employee or a centralized knowledge base with company policies such as the process for reporting absences. It can also be useful to provide supervisors with ongoing reports of their employees who have pending and approved leaves so that they can make better staffing decisions. Integrate programs and systems Oftentimes employers manage leave, short-term disability and workers compensation separately, however in reality these programs overlap. In fact, even though the FMLA often has different eligibility criteria, timeframes and documentation than short-term disability and workers compensation claims, it usually needs to be run concurrently with them. It is important to have all leave, disability and workers compensation programs communicating so that regardless of where the leave is first reported, each group is aware of it and manages their part accordingly. One of the best ways to support this is using a centralized intake approach. In addition to programs, systems also need to communicate to ensure the leave team can make accurate applicability, eligibility and entitlement determinations. Information like data of hire, hours worked and absences taken usually resides in a mix of human resources, payroll and time and attendance systems. Integrating these systems with your leave system to ensure the leave team has access to the necessary data in a timely way is crucial to effective leave management. Standardize processes and correspondence Whether there is one leave case manager or a team of leave case managers, everyone needs to be following the same process and using the same documentation. This is especially difficult for employers who have a decentralized leave team with each member setting their own deadlines and using their own leave correspondence templates. Employers need to ensure that all members of the leave team are adhering to the same timeframes set forth by the Act and using the same correspondence templates in their communications with employees. Being inconsistent increases the chances that employees will feel treated unfairly and turn to litigation claiming discrimination, and decreases the ability of the employer to prove that they made their best efforts to manage the leave. 12
Monitor and report While it is critical to implement a standardized approach to leave, it still needs to be monitored to ensure it is being adhered to. This is where operational reports come in. These may include summary case reports that allow you to quickly review pending, approved and denied leaves and to slice this data by department, division, geography or according to any other element of your organizational structure. It may include task reports, where you can report on the leave teams tasks to double check that no one is falling behind and missing deadlines. Going a step further, a great leave program will have a means to monitor approved leaves for entitlement exhaustion and growing into eligibility to ensure that each of these events is always recognized and dealt with in the same manner. It will also enable leave managers to easily identify when intermittent FMLA is being abused by comparing the approved frequency and duration to the absences the employee actually takes. Maintain transparent and open communication Transparency with employees also supports a more successful leave management program. Employers should ensure the right leave information is communicated to employees at the right time. While there are letters and notices that are mandatory, such as the notice of eligibility and entitlement determination, it can be helpful to go further. Entitlement update letters that are sent at set intervals to employees on leave communicate how much leave they have used and how much remaining entitlement they have left. This is a great tool to stay in touch with employees and recognize potential problems before they become contentious. It is also helpful to send a return to work letter clearly outlining an employee s obligations prior to their return. Essentially, there is no harm in going beyond the mandatory leave correspondence and communicating in a transparent way with employees to promote better and more productive engagement in the leave process. Percentage of Employees Who Took an FMLA Leave Over Five Years All FMLA 24% Continuous - Own 16% Continuous - Family 2% Continuous - Child/Bonding Intermittent - Own Intermittent - Family Intermittent - Child/Bonding 4% 4% 3% 0.40% Early Warnings: Using FMLA to Understand and Manage Disability Absence, IBI, March 2013 13
Review, evaluate and maintain Once a compliance strategy has been put in place, these measures must be regularly reviewed and tested to ensure their effectiveness. Remember that when making changes to leave policies and procedures, it is important to communicate them to employees in a manner that clearly outlines employee and employer responsibilities. If you already have a program in place but you aren t sure how it s performing, consult with legal counsel and your HR staff to evaluate your current company policies for employee participation, compliance and efficiency. Learning the law and how to manage FMLA in a compliant manner can seem like a huge undertaking, especially when overlapping state laws and existing company policies are introduced into the mix. The fact that the legal landscape is in a constant state of flux further complicates matters. However, employers who understand the common mistakes and who can apply a consistent, structured framework are better positioned to ensure their compliance. Above all, remember that FMLA requests often signify major life events for employees, whether it is welcoming a new child, or dealing with a serious injury or illness. When properly managed, the FMLA can be an asset to both employers and employees. Employees can take the leave they need to properly balance work and life without fear of repercussions. Employers benefit from a more satisfied workforce which leads to better morale and higher employee retention and productivity. While reaching this point may seem to be a daunting endeavor, technology can greatly simplify the process. Software solutions like Presagia Enterprise are designed to support both efficiency and compliance. With the ability of leverage technology to manage the 450 pieces of federal and state leave legislation within a rules engine, these solutions enable employers to take the guesswork out of leave management and respect the timelines set forth by the Act. The best solutions include automated tasks and alerts, and will even go so far as to monitor open and approved leaves for events like entitlement exhaustion and growing into eligibility and will monitor intermittent leave. They also offer autopopulating leave correspondence to reduce the amount of time spent filling out paperwork and increase accuracy and provide decision support for missed deadlines, appeals and denials. By providing ample decision support at each step in the leave process, leave managers can make the right decision based upon complete and up to date information. At the end of the day, these solutions support consistent and equitable leave management in order to provide a better leave experience to all parties involved. For more details about the information provided in this whitepaper or about Presagia s leave management solutions, please visit www.blr.com/leave-management or call 1-800-727-7257. 14
BLR understands that complying with the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA) and various state leave regulations has become a major concern for Human Resources professionals all over the U.S. That s why we ve partnered with Presagia, the leading developer of Software as a Service (SaaS) leave management solutions, to offer a system that automates leave management and provides a high level of decision support to help navigate these laws efficiently and compliantly. About BLR - Business & Legal Resources For over 35 years, BLR has simplified compliance with state and federal legal requirements, helping U.S. businesses succeed. BLR offers authoritative content, training, and practical, easy-to-use tools for the HR & employment law, workplace safety, environmental compliance, compensation & benefits, and politics & legal markets. Through our expert in-house editors and exclusive attorney network, we provide the most comprehensive, reliable state-specific information available and we do it in all 50 states. Our award-winning information products including training programs, events, web portals, reports and subscription services-give businesses of all sizes and industries the best tools available at affordable prices. www.blr.com About Presagia Presagia provides integrated absence management software solutions to employers and human resources outsourcing providers. These innovative solutions have been designed to account for more than 460 pieces of federal and state leave legislation across 53 jurisdictions, including the myriad of pregnancy legislation. Presagia enables organizations to enhance compliance, increase efficiency, control absence and reduce costs. www.presagia.com 15