The Family Medical Leave Act: You May Have More Eligible Employees Than You Think
by David B. Walston, Partner
The Family Medical Leave Act (FMLA) affords eligible employees with up to 12 weeks of unpaid leave for certain qualifying reasons – the primary being a serious health condition of the employee, or if the employee is needed for the care of a serious health condition of a spouse, son, daughter or parent.[1] For serious health conditions, the employee can exhaust the 12 weeks intermittently in increments of an hour or less. Except in very limited circumstances, an employer has to return the employee to the same position held when leave commenced, or provide a comparable position (substantially similar pay and benefits, and working conditions) on the employee’s return. An employer may not interfere with or retaliate for an employee’s exercise of FMLA leave rights. For example, an employer cannot consider FMLA-covered time away from work as a violation under an attendance program, including under no fault policies.
Many employers believe they are free from the burdens of the FMLA. Employees are eligible for these FMLA protections only if they work for a covered employer, and:
- Have worked for their employer for at least 12 months,
- Have worked at least 1,250 hours during the 12 months immediately preceding the start of leave, and
- Work at a worksite where the employer employs at least 50 employees at the site or within 75 miles of the site.
There are three interpretations of these requirements that expand the reach of the FMLA to the surprise of many employers.
Worked for at least 12 months: The FMLA does not require 12 CONSECUTIVE months. An employee who works for a covered employer for four months, leaves for six months and then returns and works for eight months is eligible for FMLA leave. Twelve months is considered to consist of 52 weeks. If an employee is on the payroll for any part of a week, whether or not the employee actually works, the employer has to count that week in calculating the 12-month period. The time an employee is on leave also must be counted if the employee is expected to return from leave.
An employer cannot simply look at its own payroll. Many employers secure workers from temporary staffing or employee leasing companies. In some instances, after a certain amount of service, the employer hires the temporary/leased employee and places him or her on its payroll. In calculating the 12-month period for FMLA eligibility, the employer must include the time the employee worked as a temporary or leased employee. For example, ABC Leasing Agency provides an employer a temporary worker for eight months with the employee paid by ACME. The employer then hires the employee directly and places the employee on its payroll. After four months of direct employment, the employee is eligible for FMLA leave from the direct employer.
Counting Employees: The employer’s own payroll is the starting point for determining if it employees 50 or more employees at a worksite at the site or within 75 miles of the site. An employee on leave must be counted if he or she is expected to return to work on completion of the leave. As with calculating months of employment, the employer must also take into account its use temporary/leased employees or a contract with a “Professional Employer Organization (PEO).”[2] According to guidance issued by the U.S. Department of Labor both the employer and the staffing agency/PEO must count the leased employees as their own in determining employer coverage and employee eligibility. For example, if the client employer has 40 “leased” employees that are jointly employed with the PEO and, in addition, employs 15 “permanent” employees of its own, then the client is an FMLA-covered employer as it employs more than 50 employees. The client employer would only be responsible for granting FMLA leave to its 15 “permanent” employees, but not for the jointly employed “leased” employees as that responsibility belongs to the staffing agency/PEO as the “primary” employer.
Your own payroll does not end the FMLA inquiry. If you use leased employees or so-called temporary “contract labor,” you must account for these workers in FMLA coverage and employee eligibility determinations. You may think the employees are not yours, but the FMLA may say otherwise.
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[1] A “serious health condition” is an “illness, injury, impairment, of physical or mental condition that involves – (A) inpatient care in a hospital (even a single night), Hospice or residential medical are facility; or (B) continuing treatment by a health care provider.”
[2] A PEO establishes a contractual relationship with an employer and assumes responsibility for personnel management, health benefits, workers’ compensation claims, payroll, payroll tax compliance, and unemployment insurance claims. In addition, the PEO has the right to hire, fire, assign, and direct and control the employees.