More Than Ever The Need For Capable FMLA Administration. DOL unveils new partnership with the ABA - What employers need to know

Transcription

1 More Than Ever The Need For Capable FMLA Administration DOL unveils new partnership with the ABA - What employers need to know

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3 Patrick C. Haynes, Jr. Today s presenter As counsel for Crawford Advisors Employee Benefits and Executive Compensation Group, Mr. Haynes advises employers and plan sponsors in a variety of health and welfare benefit plan compliance matters, including, but not limited to, tax qualification and other Internal Revenue Code issues, ERISA, COBRA and HIPAA portability and privacy issues. Mr. Haynes lectures frequently and has published many articles on health and welfare benefit plan compliance topics. Practice Areas Employee Benefits & Exec Comp, ERISA, COBRA, HIPAA, 125, and 105, 106, 129, 132 Education Temple University School of Law, LL.M. Rutgers University School of Law, J.D. Rutgers University School of Business, M.B.A. Rutgers University College of Arts & Sciences, B.A. Admitted to Practice U.S. Supreme Court Federal and State Courts of New Jersey Pennsylvania Connecticut District of Columbia

4 4 Agenda FMLA Overview & Employee Eligibility Changed playing field private lawyers Employer Challenges\Obligations Methods of Calculating Leave & Types of Leave Top FMLA Violations & the Risks of Non-Compliance Questions?

5 5 Family and Medical Leave Act - Overview FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family & medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not take leave. Eligible employees are entitled to : Twelve workweeks of leave in a 12-month period for: The birth of a child and to care for a newborn child within one year of birth; The placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement; To care for the employee s spouse, child, or parent who has a serious health condition; A serious health condition that makes the employee unable to perform the essential functions of his or her job; Any qualifying exigency arising out of the fact that the employee s spouse, son, daughter, or parent is a covered military member on covered active duty; or Twenty-six workweeks of leave eligible during a single 12-month period to care for a covered service member with a serious injury or illness who is the spouse, son, daughter, parent, or next of kin to the employee (military caregiver leave). Source: dol.gov

6 6 Employee Eligibility To be eligible for FMLA benefits, an employee MUST: Work for a covered employer with 50 EEs within a 75 mile radius. Work at a location in the United States/United States territory where at least 50 employees are employed by the employer within 75 miles. Have worked for the employer for a total of 12 months. Have worked at least 1,250 hours over the previous 12 months. Source: dol.gov

7 7 The Changing Landscape Employees with Unresolved FMLA or FLSA Complaints with the DOL As of 12/13/10, they provided a toll-free number to get a referral to an American Bar Association approved Plaintiff s Attorney that can handle their lawsuit As the Wall Street Journal states: this partnership essentially helps plaintiffs attorneys hunt for clients let the suing commence.

8 8 The Changing Landscape Big Money in FLSA cases and the Volume is Increasing making FMLA privatization even more appealing Early 1990 s 1,500 cases per year ,000 FLSA lawsuits

9 9 The Changing Landscape Why is the DOL doing this? Wage & Hour Division is able to help many workers, yet vast majority aren t able to recover denied or lost wages, lost jobs, etc., due to limited capacity. The Wage & Hour Division will now connect these workers to a local referral unit that will provide them with counsel that will help level the playing field for employers who want to do the right thing.

10 10 Employer Challenges Growing number of state-specific leave laws. There is at least one job-protected leave law in nearly every state. 1 Many state leaves run concurrently and some can be coordinated with FMLA. More and more employer-sponsored leaves State Specific Leave Laws 1 As of July 8, 2010

11 11 State specific leave examples*: Washington: Washington Family Leave, Pregnancy Disability Leave, Parental Leave, Domestic Violence Leave, Military Family Leave California: California Family Rights Act ("CFRA"), Pregnancy Disability Leave, Paid Family Leave, CA State Disability, Parental School Leave, Victims of Domestic Violence Employment Leave Illinois: School Visitation Leave, Family Military Leave, Victims Economic Security and Safety Act with Domestic and Sexual Violence Victims Leave ("VESSA"), Employee Blood Donation Leave Massachusetts: Maternity Leave Act ("MMLA"), Small Necessities Leave *As of May 10, 2010: This represents only a sampling of state laws and is not meant to be an exhaustive list of laws in any state.

12 12 State specific leave examples, continued: South Carolina: Pregnancy Disability Leave, Donation of Bone Marrow Leave, Emergency Volunteer Leave Florida: Domestic Violence Leave Connecticut: Connecticut FML, Witness and Crime Victim Leave, Pregnancy Leave Wisconsin: Wisconsin FML, Civil Air Patrol Leave *As of May 10, 2010: This represents only a sampling of state laws and is not meant to be an exhaustive list of laws in any state.

13 13 Employer Obligations An employer must, within predetermined timeframes: Evaluate eligibility for leave: Hours worked Location Tenure Employee Status Calculate entitlement for leave: How much time available Coordination with state leave laws Determine qualification of leave: Meet the definition of a serious health condition or military leave entitlements through review of employee-provided medical certification or information Meet the definition of non-medical leaves Applicable state leave laws Confirm in writing within 5 business days of notice for leave: Eligibility Rights and responsibilities Confirm in writing within 5 business days of receipt of information: Designation of leave

14 14 A Changing Landscape Increase in legislation and complexity of leave legislation, FMLA and State & the DOL s efforts to engage private counsel. As absence management has increased in complexity, employers look to outsource. * Risk managers realize the potential legal exposure for poor management of leaves. * Silos breaking down within organizations * Integrated benefits products were offered in the late 1990s A product before its time and without a market * Spring Consulting Group, LLC. 2009/2010 Employer Survey of Integrated Disability, Absence & Health Management Survey, 8/10/2010.

15 15 Methods for Calculating FMLA Leave a small example of one facet/concern regarding FMLA management According to the regulations implementing the FMLA, there are four methods to calculate FMLA leave, and if the employer does not pick one in advance and let the employees know which one the employer picked, then the employees can pick the one that is most advantageous to them, which could result in the employee taking up to 24 consecutive weeks off.

16 16 Methods for Calculating FMLA Leave Fixed year Method: Under the fixed 12-Month Period method, an eligible EE can take up to 12 weeks leave at any time within the fixed 12-month period selected. Employer can select one of the following: The Calendar year. (1) Any other fixed 12-Month period. (2) Rolling Forward Method: (3) Under the forward method, an EE s 12-Month period starts on the day the EE s first FMLA leave begins and ends 12 months later. The EE can take 12 weeks of FMLA leave during that 12-month period. The EE s next 12-month period begins the first time he/she takes FMLA leave after completing the previous 12-month period. Rolling Backward Method: (4) Under the backward method, an EE s 12-month period is measured backward from the date an EE uses any FMLA leave. Every day an EE takes FMLA leave (including intermittent leaves) he/she is entitled to any remaining balance of the 12 weeks of leave that has not been used during the immediately preceding 12-month period.

17 17 Types of Leave Single Block of Leave Care for a newborn child or adoption of a child Intermittent Leave: Leave taken in separate blocks of time for a single illness or injury. Can be for planned treatments Or for conditions which flair up unexpectedly and prevent employee from doing his job (migraines, arthritis, lupus, bad back, etc.) Reduced Leave schedule: Leave which results in regular alteration/reduction of scheduled work hours during the certified period. Employee is entitled to be given a reduced leave schedule if condition qualifies FMLA does not require an employer to allow employees to take intermittent or reduced schedule leave for bonding; however, an employer can choose to allow under their leave policies. An employee cannot be forced to take off more time than he needs.

18 18 FMLA is the #1 Employment Law Headache A 2009 survey shows the Family and Medical Leave Act (FMLA) is more burdensome for HR professionals than any other federal employment related Law. * Which federal employment-related law gives you the biggest headache? 49% answered: FMLA HIPAA 8% FML 49% Employment Laws ERISA 5% OSHA 5% ADA 8% FLSA 12% COBRA 13% * Source: BLR, Business & Legal Resources, April, 2009.

19 19 Top FMLA Violations Failure to identify and promptly designate FMLA-qualifying absences. It is up to the employer to notify the employee Failure to educate management about the FMLA regulations Failure to notify employees of their FMLA rights and obligations Failure to administer state leave laws correctly in conjunction with the FMLA Failure to calculate leave entitlement in workweeks correctly Failure to understand that the FMLA can apply even if employees don t specifically say, I need FMLA leave Failure to track FMLA entirely because more generous leave benefits are provided

20 20 Top FMLA Violations Continued Failure to designate extended leaves as FMLA, except those who qualify for short-term disability Failure to realize that there can be significant penalties assessed for FMLA violations Failure to determine eligibility properly (temp time) Counting FMLA leave against employee s absenteeism policy for disciplinary purposes. Failure to grant leave to provide physical or psychological comfort Failure to reinstate to same or equivalent job Terminating an employee during or at the conclusion of FMLA leave

21 21 The Risk of Non-compliance Failing to comply with the law can be costly. Managers Failing can be to held comply personally with the responsible law can be for costly. violations. Companies Managers can be can faced be held with personally expensive responsible legal fees and for settlement violations. fees. The Case: Dotson v. Pfizer*. The Plaintiff, Dotson was seeking to adopt a child from Russia and took intermittent time off to attend to the adoption, taking two trips to Russia. The employee kept his employer informed and spoke to his HR Dept. After returning from Russia with the child, the employee was terminated based on an alleged violation of company policy. Dotson sued for FMLA retaliation. The employer argued that the employee was not entitled to FMLA protection because he failed to indicate that he needed FMLA leave. The court rejected this argument, noting that an employee does not have to expressly sate that he needs FMLA or use any magic words to trigger the employer's obligation. The Result: A jury found for the employee and awarded him $1,876,000. The employer appealed but the court affirmed the decision in the employee s favor. The court also held that the lower court erred when it failed to award the employee prejudgment interest, making the judgment even larger than that awarded by the jury. *2009 Dotson v. Pfizer, No (4 th Cir. March 4, 2009)

22 22 Next Steps? 1. Review your compensation practices. 2. Train payroll staff and managers on FMLA compliance issues. 3. Put everything in writing, it gives employees less wiggle room. 4. Don t be afraid to seek clarification or ask for second opinions, particularly when dealing with employees with a history of attendance problems. 5. Be consistent do not selectively enforce. 6. Stay in touch with absent employees there is no prohibition against contacting them, asking about their status. 7. Keep your eyes & ears open if circumstances have changed, request certification (your documentation must be solid).

23 23 Questions Crawford Advisors, LLC 200 International Circle, Suite 4500, Hunt Valley, MD East Lancaster Ave, Suite 640, Radnor, PA Via to: To Download These Slides:

24 More Than Ever The Need For Capable FMLA Administration April 20, 2011 CrawfordAdvisors, LLC Consulting, Brokerage & Administration