Cracking the Code: Managing and Administering Paid and Unpaid Leaves of Absence

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1 Cracking the Code: Managing and Administering Paid and Unpaid Leaves of Absence Tuesday, October 18, 2016 New York Hilton Midtown New York, NY Your Workplace. Our Business. Maral N. Kazanjian Global Head of Employment Law, Moody s Corporation Marc A. Mandelman Member, Epstein Becker Green mmandelman@ebglaw.com (212) Amy B. Messigian Associate, Epstein Becker Green amessigian@ebglaw.com (310) Jeffrey P. Rosier Senior Employment Counsel and Director of State Government Relations, Marsh & McLennan Companies, Inc. October 15, 18, Epstein Becker & Green, P.C. All Rights Reserved. ebglaw.com 1

2 Agenda An Overview of Federal, State, and Local Leave Laws The Intersection of the Various Leave Laws Developing Leave Policies Managing and Administering Leaves 3 An Overview of Federal, State, and Local Leave Laws 2

3 An Overview of Federal, State, and Local Laws Coverage Threshold 12 months of employment 1,250 hours of service in the preceding 12 months Work at a location with at least 50 employees within 75 miles The Family and Medical Leave Act (FMLA) 12 weeks of unpaid leave during any 12-month period or 26 weeks for service member leave Reasons for Leave The birth and care of a newborn child of the employee The placement with the employee of a child for adoption or foster care The care of an immediate family member (spouse, child, or parent) with a serious health condition Medical leave when the employee is unable to work because of a serious health condition Exigency leave for family member of reservists, members of the National Guard, and members of the Regular Armed Forces Service member leave Job-protected, with medical benefits 5 An Overview of Federal, State, and Local Laws The ADA requires employers to provide reasonable accommodations to qualified individuals with a disability who can perform the essential functions of the job with or without accommodation, unless doing so would constitute an undue hardship Individualized inquiry context-specific Focus on whether the worker can perform the essential functions of the job The Americans with Disabilities Act (ADA) A leave of absence may be a reasonable accommodation, even if the employee is not eligible for jobprotected leave under the FMLA or other leave laws Disability is defined as a physical or mental impairment that substantially limits one or more major life activities; a record of such an impairment; or being regarded as having an impairment Note that under some state and local laws, such as in CA and NY, a disability can be defined more broadly Must engage in the interactive process 6 3

4 An Overview of Federal, State, and Local Laws Workers Compensation Provides coverage for employees who are injured or become ill on the job Administered by and governed by each state through state insurance programs that are funded by employers Benefits are provided regardless of fault Generally prohibits employee from suing employer 7 An Overview of Federal, State, and Local Laws Generally, these laws require paid sick leave as well as leave to care for family members Overview of State/Local Paid Sick Leave Laws These laws typically apply to all types of employees, including part-time and seasonal employees Each year, employees are typically able to accrue from between 24 to 72 hours and use from 24 to 80 hours These new sick leave laws will often trump employer sick policies, particularly if the employer is trying to create a nationwide policy 8 4

5 An Overview of Federal, State, and Local Laws States and Municipalities with Paid Sick Leave Laws California Montgomery County, MD Paterson, NJ Connecticut* Minnesota, MN Trenton, NJ Massachusetts Jersey City, NJ New York, NY Oregon Newark, NJ Portland, OR San Francisco, CA Plainfield, NJ Eugene, OR Oakland, CA Elizabeth, NJ Philadelphia, PA Emeryville, CA Bloomfield, NJ Pittsburg, PA Santa Monica, CA East Orange, NJ Seattle, WA Los Angeles, CA Irvington, NJ Spokane, WA San Diego, CA Montclair, NJ Tacoma, WA Washington, DC New Brunswick, NJ Washington, D.C. Chicago, IL Passaic, NJ *Service workers only 9 The Intersection of Leave Laws 5

6 The Intersection of the FMLA, the ADA, and Workers Compensation Example Loss of leg; on the job Loss of leg; not on the job Blind; no treatment Broken leg in cast; on the job; full recovery Hearing impairment; on the job; no ongoing treatment Impairment that substantially limits one or more major life activities Serious health condition On-the-job injury or illness Non-work related injury Local sick leave (LSL) ADA FMLA WC DBL LSL ADA FMLA WC DBL ADA FMLA WC DBL LSL ADA FMLA WC DBL LSL ADA FMLA WC DBL LSL LSL Sick child ADA FMLA WC DBL LSL Pregnancy ADA (unless disabled due to pregnancy) FMLA WC DBL LSL 11 Developing Leave Policies 6

7 Developing Leave Policies Nationwide policy that works in all locations vs. multiple policies that are specific to locations Considerations for Drafting Sick Time Policies Consideration within the policy, such as: Eligibility (full-time vs. part-time) Amount of benefit Use and accrual Caps and carryovers Purposes for use of sick time Paid time off (PTO) policies Traditional leave is generally divided into vacation, sick, and personal days PTO policy: One bank of time Nationwide Vacation, Sick, and Personal Day Policies Nationwide PTO Policy Local Vacation, Sick, and Personal Day Policies Local PTO Policies 13 Developing Leave Policies - PTO Simplifies recordkeeping Provides employees with greater flexibility Reduces employee dishonesty (i.e., using a sick day to extend a vacation or attend to a personal matter) May increase the total number of days employees are absent May drive employee behavior to use or preserve PTO depending on employee circumstances and policy on banking/forfeiture of time Advantages of PTO Policies Disadvantages of PTO Policies May allow for an overall reduction in paid days off Warning: May negate morale-boosting effects of greater flexibility Must comply with state laws that would otherwise only apply to a single category of time off (i.e., vacation) Employers may not be aware of employees need for FMLA leave 14 7

8 Developing Leave Policies - PTO Forfeiture of accrued personal time is unlawful PTO in California In other words, if a policy provides paid vacation (or personal days or PTO), the time is vested and must be paid at the employee s final rate of pay on termination of employment PTO policy cannot circumvent Ca. Labor Code (i.e., all rules regarding vacation/personal days must be followed when utilizing a PTO policy) May cause sick leave to become non-forfeitable As an alternative to unlimited carryover of vacation (PTO), reasonable accrual caps are permissible (generally 1.5x an employee s annual allotment) However, accrual caps may conflict with local paid sick leave law requirements regarding accrual and carryover Rollover caps (i.e., only 10 days) not permissible Use it or lose it policies are prohibited 15 Developing Leave Policies Best Practices When Considering a Paid Leave Policy Best Practices When Considering a Paid Leave Policy Think about pros and cons prior to switching to PTO National vs. local policies PTO vs. separate allocations Before implementing any policy, be sure that it complies with applicable laws, including the laws of the state and locality where you have operations Communicate transition with care Consistently enforce policy 16 8

9 Managing and Administering Leaves Managing and Administering Leaves Develop procedures on who is responsible for administering leaves Internal leave or benefits administrator vs. third-party administrator If using a third-party administrator, ensure understanding of rights and responsibilities of information flow Best Practices Clarify who is responsible for leave policies and any required legal updates Train HR or benefits administrators to apply policies consistently 18 9

10 Questions? 19 10