Understanding FMLA Basics

Originally posted May 21, 2014 on https://hrdailyadvisor.blr.com.

Is your organization subject to the requirements of the Family and Medical Leave Act (FMLA)? Do all of your employees qualify? What would it take for both your organization and your employees to qualify? And what does all of this mean in terms of employer obligations?

Let’s start with the basics: What employers are subject to the FMLA regulations?

Here are the basics of what employers are covered:

  • For private companies, the employer must have at least 50 employees to be subject to the FMLA, and these employees must have worked at least 20 or more workweeks in the current or prior calendar year.
  • Additionally, there must be at least 50 employees within a 75-mile radius for that location to be covered.
  • Public (government) agencies and schools are subject to the FMLA regardless of the number of employees.

What this means in practice is that any private employer with fewer than 50 employees does not have to provide FMLA leave. And even employers with more than 50 employees do not have to provide FMLA leave to employees who work in locations where there are fewer than 50 employees within a 75-mile radius, even if all other employees are covered.
Bear in mind, an employer with fewer employees than this threshold could still choose to allow unpaid leaves that are in alignment with the FMLA standards, but they would not be required to do so by law.

Now let’s look at employees: Which employees qualify to take FMLA leave?

What must an employee do to qualify under the FMLA?

  • First, the employee must have been employed by the employer (the same employer who is subject to the FMLA leave based on the criteria above) for at least 1 year. This requirement does not have to be the preceding year calendar year and need not be consecutive. For example, if an employee worked for the employer in the past, that time could count toward this requirement as long as it was fewer than 7 years ago (or if the absence of more than 7 years was due to military obligations).
  • The employee must have worked at least 1,250 hours for the employer in the preceding 12 months. Vacation or PTO time does not count toward this requirement.
  • The employee must work at a location that has 50 or more employees within a 75-mile radius, as we noted above.
  • Finally, the employee must have a qualifying condition. This includes:
    • The employee’s own serious health condition.
    • The need to care for an immediate family member with a serious health condition. “Immediate family member” refers to a spouse, child, or parent.
    • Placement or birth of a child. (The right to leave in this instance extends for up to one year after the birth or placement of the child.)
    • Any qualifying exigency related to an immediate family member being in the military on “covered active duty.”

And if both the employer and the employee qualify, what does that mean the employee is entitled to?

If the employer is subject to the FMLA leave and the employee qualifies for it, then the employee has the right to up to 12 workweeks of unpaid leave in a 12-month period, which can be taken in one or more blocks of time. For some conditions, when medically necessary, the leave could also be taken intermittently or on a reduced schedule.
The FMLA also entitles the employee to:

  • Job reinstatement upon return from leave, in the same or equivalent role.
  • Continuation of group health benefits during the leave period. The employee is still obligated to pay his or her insurance premium contributions during that time.
  • Up to 26 total weeks of leave (instead of 12) in the case of caring for a covered service- member with a serious injury or illness.

Beyond employee entitlements, covered employers also have an obligation to:

  • Post an FMLA notice explaining employee rights under the FMLA program.
  • Give all new employees information about the FMLA, either in the employee handbook or separately upon hire.
  • Tell an employee when he or she may have an FMLA-qualifying leave, as soon as the employer reasonably should know that an absence or leave request may qualify.
  • Give employees an official eligibility notice for FMLA leaves.
  • Explain the employee’s rights and responsibilities under the FMLA.
  • For all FMLA leaves, note the FMLA designation and how much of the total leave allotment will be deducted from the employee’s leave bank.

These basic components of the FMLA can help employers to understand their obligations under the FMLA. Of course, this is just the tip of the iceberg; proper FMLA administration will require a more in-depth understanding of how to ensure employees are qualified, how to curb FMLA abuse, and how to ensure employees are treated fairly and consistently under the program.

Measuring leaves of absence in concert with the ACA

Originally posted May 7, 2014 by Ed Bray, J.D. on https://ebn.benefitnews.com

I can unequivocally say that administering employee leaves of absence has been the most challenging responsibility of my HR career. Why? For every employee leave you must ensure that an orchestra of different people, laws, and systems play in perfect concert with each other.  Not an easy task when you consider the following:  trying to determine who and when employees are on leave; often abiding by multiple, complex leave laws; and dealing with HRIS tracking shortcomings (if you even have a tracking system).

OK, so what’s my point?  Thanks to the Affordable Care Act, many organizations’ leave of absence orchestras are going to need to start sounding like the London Symphony Orchestra in the next few months.

Organizations that are required to follow the shared responsibility (play or pay) rules that use the look-back measurement period to determine whether variable hour, seasonal, or part-time employees are eligible for employer health insurance benefits must ensure each employee’s average hours of service are calculated accurately for the initial and standard measurement periods.   A key component of the average hours of service calculation is the impact of any employee special unpaid leave (FMLA, leave under USERRA, and jury duty) during the respective measurement period.

The final regulations for the employer shared responsibility rules state that “special unpaid leave” may be defined as unpaid leave under the Family and Medical Leave Act of 1993, the Uniformed Services Employment and Reemployment Rights Act of 1994, or jury duty.  When calculating hours of service for a look-back measurement period, the employer must treat special unpaid leave in one of two ways:

▪       Determine the employee's average hours of service by excluding any periods of special unpaid leave during the measurement period and applying that average for the entire measurement period, or

▪       Impute hours of service during the periods of special unpaid leave at a rate equal to the average weekly hours of service for weeks that are not part of a period of special unpaid leave.

That said, it is critical that each employee’s average hours of service calculation accurately reflects any “special unpaid leave” as any employees that average under 30 hours of service per week or 130 hours of service per calendar month for the respective measurement period do not need to be offered employer-sponsored benefits.  Many employees not offered benefits will be significantly affected as they will be required to enroll in some form of minimum essential coverage or else face a penalty under the ACA individual mandate. In addition, they may feel their hours of service calculation is incorrect and call the Department of Labor to express their concerns.

I recommend organizations focus on making three key business decisions as they prepare for the shared responsibility rules, effective in 2015 for employers with 100 or more full-time employees, including full-time equivalents (FTEs), and in 2016 for some employers with 50-99 full-time employees, including FTEs (certain conditions apply):

▪       How to accurately track employee leaves of absence.

▪       How to handle unpaid state and company leaves of absence for purposes of the measurement period calculations.

▪       Determine which ACA “special unpaid leave” process to use.

Ensure accurate leave of absence tracking

First meet with executive management to make them aware of the shared responsibility rules and noncompliance penalties plus gain support for doing what is necessary to ensure accurate leave of absence tracking. This includes the following (at a minimum):

▪       Making managers and employees aware of the importance of communicating employee leaves of absence to the HR department as soon as they learn about or need them;

▪       Meeting with the IT department to see if they can: 1) accurately track leaves of absence; 2) track different types of leaves; and 3) provide reporting of such leaves during the initial and standard administrative periods. If not, develop a leave of absence tracking mechanism within the HR department.

Handling unpaid state and company leaves of absence for purposes of the measurement period calculations

The federal government has stated its position with regards to three special unpaid leaves, but what about state or company unpaid leaves of absence? How should they be treated under the look-back measurement period calculations?

Given the fact that there is legal uncertainty regarding the answer to this question and handling such a situation incorrectly could have significant ramifications for your organization, I recommend consulting legal counsel to determine the answer for your organization.

Determine which ACA special unpaid leave process to use

I recommend selecting the ACA special unpaid leave process that is going to be the least administratively challenging given all of the new responsibilities associated with the leave of absence tracking process. To date, I have seen more employers select the exclusion method.

So, start tuning up your leave-of-absence orchestra because the effective dates for the shared responsibility rules are right around the corner.