FMLA Leave Administration Tuneup: Employer Choices Worth Reviewing
This blog, by Abigail O’Connell, J.D., Senior Counsel, Sun Life US & Sarah Simmons, J.D., Absence & Employment Counsel, discusses several key FMLA administration choices that employers should review periodically, including the leave year method, intermittent bonding leave, the married couple rule, and the key employee rule.
It is a good human resources practice to evaluate your federal Family and Medical Leave Act (FMLA) administration choices periodically to make sure they meet your needs and goals. Decisions in FMLA administration can determine whether a comparable state leave will run concurrently with FMLA leave or separately, thus extending the amount of time an employee can be out of work. These decisions can affect employee relations, which is especially important in a tight labor market. This article will review some key FMLA administration choices that employers should evaluate in light of changes to state laws and to workplace norms.
Leave Year Method
The FMLA permits one of four methods to define the 12-month period (leave year):
- The calendar year
- Any fixed 12-month leave year
- The 12-month period measured forward from the date FMLA leave begins
- A “rolling” 12-month period measured backward from the date an employee uses any leave
Leave year method selection is applied to new child bonding, caring for a family member, military exigency, and an employee’s own serious health condition. Leave taken to care for an injured servicemember must use the 12-month period measured forward from the date leave is taken.
The rolling backwards method prevents so-called “stacking” of time. It looks 12 months backward to identify what balance of leave is available. For example, if an employee took four weeks starting on Jan. 1, July 1, and then on Oct. 1, the employee would exhaust available FMLA leave. Time begins to “roll back” beginning with four weeks becoming available on Jan. 1 the following year. The employee would then have an additional four weeks on July 1, and so on.
In contrast, leave under each of the other methods is immediately re-accrued to the full entitlement when the trigger date is reached. For example, under the calendar leave year method, an employee could take 12 weeks of leave beginning Oct. 1 and will have another 12 weeks available on Jan. 1, resulting in the potential for 24 weeks of continuous leave. The rolling backwards method only entitles an employee to the remaining leave balance not used during the preceding 12 months, which prevents an employee from being out longer than 12 weeks within a 12-month period.
Employers must select one of the four methods, so long as the same method is used for all employees. The exception is when an employer has eligible employees in multiple states. If state law requires a specific method of determining the leave year, the employer may comply with the state provision for all employees within that state and use a different method for employees in other states.
Some states call the leave year method the Benefit Year, Application Year, or Claim Year. Employers may seek to align methods in states where they have the most employees. For example, California’s Family Rights Act (CFRA), Connecticut’s Family and Medical Leave law (CT FMLA), the District of Columbia’s Family and Medical Leave (DC FMLA), and Oregon’s Family Leave Act (OR FMLA) all permit the employer to use one of the four federal FMLA methods, which makes alignment easier for those laws. In comparison, Wisconsin’s Family or Medical Leave ascribes a calendar leave year method. An employer in Wisconsin would benefit from using this method for FMLA to align leave diminution.
If an employer wants to change to a different method, it must give employees 60 days’ written notice. During the 60-day transition period, the period most beneficial to the employee is applied.
Intermittent Bonding
The FMLA and state leave laws vary on intermittent bonding leave. Under the FMLA, employers may require bonding leave to be taken in one continuous block or can choose to permit intermittent leave or a reduced schedule. Permitting intermittent leave can promote employee engagement and good will, according to employees. Parents often request separate bonding time or seek intermittent leave to save on childcare costs. This approach also allows them to continue contributing at the workplace while supporting their families.
State leave laws may help determine whether to permit intermittent bonding leave. For example, Connecticut, Maine, and Massachusetts align with the federal FMLA, and permit the employer to decide whether to provide intermittent or reduced schedule bonding. Conversely, New Jersey, New York and Washington permit intermittent bonding without an employer’s agreement. California’s CFRA requires employers to provide intermittent leave in two-week increments provided the employer grants a two-week increment request at least twice.
If offering intermittent or reduced schedule bonding leave, the employer may make specific minimum requirements, such as one-week increments. If permitted, leave should be provided in a non-discriminatory manner to all employees in the same or equivalent positions or to all employees consistently.
Married Couple Rule
Under the married couple rule, legally married employees working for the same employer can share the 12- or 26-week available leave allotment when leave is taken by either employee for bonding, care of a parent, or care of an injured service-member.1 Originally this was intended to protect employers from hardship they might incur should two married employees go on leave at the same time. However, it does not apply to domestic partnerships or family members working for the same employer such as siblings, parents, and children. Depending on the employer’s goals and circumstances, it may choose not to enforce the married couple rule.
Many have criticized the married couple rule as unfair to working women because it reduces available leave if the woman happens to be married to a co-worker. Bipartisan legislation has been introduced in Congress to eliminate the rule, but it has never reached the floor for a vote.
States rarely invoke married couple limitations. California, Massachusetts, Maryland, New Jersey, Oregon, and Wisconsin all bar the application of the married couple rule. If an employer has a high volume of employees in states where state law does not support the rule, then it may not make sense or appear equitable to employees in other states to apply it under the FMLA.
The rule can also be circumvented. An employee could take FMLA to care for a spouse during recovery from childbirth, and then take bonding time. In this scenario, both employees receive a full 12 weeks because care for a spouse with a serious health condition is not among the leave reasons to which the restriction applies.
Key Employee Rule
Under the “key employee rule”, the FMLA requires the employer to grant FMLA if the employee is eligible but permits the employer to deny job restoration to a “key employee” if doing so would prevents substantial and grievous economic injury to its operations. A key employee is a salaried, FMLA-eligible, employee who is among the highest paid 10% of all employees, at the time of the request, including salaried and non-salaried, eligible and not eligible employees, and who is employed within 75 miles of the worksite.
The regulations note that the “FMLA's substantial and grievous economic injury standard is different from and more stringent than the undue hardship test under the ADA.”2 The issue for evaluation is whether reinstatement of the employee will cause serious economic harm, (for example, the return would threaten the economic viability of the organization), not whether the employee’s leave is causing economic injury.
The notice requirements are stringent and specific. Employers must give written notice to the employee at the time the employee requests leave of their status as key employee, and fully inform the employee of the potential consequences with respect to reinstatement and maintenance of health benefits if the employer determines that substantial and grievous economic injury to the employer’s operations will result if the employee is reinstated.
As soon as the employer makes a good faith determination of substantial and grievous economic injury, the employer must inform the employee in writing and serve it on the employee by hand delivery or certified mail. The notice must permit them to return in a reasonable time. If the employee does not initially return, the employee can request reinstatement later and the employer must again determine if substantial and grievous economic injury will result. If the employee does not return, they are entitled to their full amount of FMLA and medical coverage must continue.
Use of the key employee rule is rarely advisable, as the test for economic injury is hard to meet, and timely determinations and notices are cumbersome. State law is often silent on like-requirements, but Washington Paid Family and Medical Leave (WA PFML) and Washington Family Military Leave permit the application of the key employee rule.
Conclusion
It is helpful for employers to give the FMLA attention considering state leave developments and the changes workplaces have undergone these past two years. Every few years, review and potentially revise FMLA administration options as your organization grows and changes.
References
1. https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/whdfs28l.pdf
2. 29 C.F.R. § 825.219(d). retrieved from https://www.law.cornell.edu/cfr/text/29/825.219
This article is meant to provide general information only. It’s not professional medical or legal advice, or a substitute for that advice.
Sun Life Assurance Company of Canada, Wellesley Hills, MA. For New York group policies: Sun Life and Health Insurance Company (U.S.), Lansing, MI
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