Leave Laws Are Ever
Changing –
Are You Keeping Up?
Leave Laws Are
Ever Changing –
Are You Keeping Up?
Cheryl Jez,
Regional Practice Leader
214-432-1311
Presented By:
FMLA – What is it?
Intent/Eligibility
Why is it so challenging
FMLA Facts and Statistics
Case Law and Non-Compliance Exposure
Building a Business Case to Understand Your Options
Industry Best Practices
Questions
Agenda
Intent of FMLA
Balance workplace demands with family
needs
Ensure job-protection
Healthcare continuation
Minimize discrimination related to approvals
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www.dol.gov
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FMLA Eligibility
12 months; need not be consecutive (exclusion: 7 year gap)
AND
1250 hours in the preceding 12 months (24 hrs/wk) - Some states may
vary on requirements for both months and hours
50+ employees/75 mile radius – surface miles by available
transportation from worksite (usually waived)
“No fixed worksite” (i.e. sales): headcount of site they report to
Determined at time of request; may re-request count during a leave
Key employees: 10% highest paid within 75 mile radius - not denied
coverage; employer allowed to deny job restoration if grievous
economic hardship (usually waived)
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Health Benefits Under FMLA
Employers must maintain group health coverage
Employees must pay their portion of premium. If
unpaid, benefits could cease with appropriate
employee notification
Employers can recover unpaid premiums
Employer not obligated to maintain any other
benefits unless benefits are continued for other
leave types
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Job Protection Under FMLA
Entitles employee to resume pre-leave or equivalent
position with equivalent pay and benefits
No FMLA protection for layoffs or a reduction in work force
If employment would end as an active employee, the employee can
be terminated while on leave
No entitlement to accrue seniority while on leave
(promotions and benefits)
Employment contracts
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FMLA Serious Health Condition definition is broad
and is intended to cover many physical and
medical conditions
• Employees Own Serious Health Condition
• Care for employees (well) child after birth, or
placement for adoption / foster care
• Care for employees spouse, child, parent, (next of kin
if service member) who has a serious health condition
• Deployment Activities for Military
Qualifying Event
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Impact of State Regulations
Key: colored areas indicate states with
additional leave regulations
WA MT
OR ID WY
NV
CA
UT
AZ
CO
NM
TX
OK
KS
NE
SD
ND
WI
IA
MO
MN
IL IN OH
MI NY
VT
ME
NH
PA
MA
RI
CT NJ
DE DC
MD
WV VA KY
FL
NC TN
SC GA
AR
AL MS
LA
AK
HI
ADA Considerations
Consider ADA:
when an employee requests restrictions
when you receive a Healthcare Provider’s
certification requesting restrictions
when FMLA exhausted
when a company policy exhausts
when you are considering terminating an employee
when you are considering replacing an employee’s position
ADA Considerations
If an employee is on leave and you want to affect a change in their status
Obtain current medical information
- Will the employee be able to return to work with or without restrictions if they are allowed an extension of their leave?
- If no, can proceed with action.
- If yes, how long to you anticipate the employee will need?
1 week, 4 weeks, 2 months, etc. ?
- Depending on the anticipated RTW date and any potential restrictions the employer is to make a decision on extending the leave based on business necessity and “burden on the employer”.
Why Is FMLA So Challenging?
Complexity and exposure in three overlapping areas:
Overlay of state regulations; constantly changing
Relation to other programs
Hard-dollar costs (real as well as potential)
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Legal
Compliance Abuse of
Privilege
Administration
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Employer Leave Policy
Employer must specify in FMLA policy that
FMLA time runs concurrent with Group Disability
and Workers’ Compensation
Employer must specify if employee is unable to
return to work after 12 weeks, he or she may lose
job and benefits protection (must consider ADA rights)
Absence Types
Continuous
Four or more consecutive calendar days off of work
Could be Friday, Saturday, Sunday and Monday
Intermittent
Reduced number of days in a workweek
Reduced number of hours in a day
Intermittent Criteria
Must meet a serious health condition definition
Can be a single injury/illness day
-doctor appointment, prenatal exam, physical therapy, chemotherapy,
morning sickness
Must be measured in smallest increment of time that other leaves
are allowed but not longer than one hour
Can be intermittent for care of newborn if agreed upon by employer
CA requires 2 week minimum with twice less than
2 weeks allowed
Must be calculated according to employees schedule
Regularly scheduled required OT missed can be FMLA
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Drivers/Trends of Intermittent Leaves
-Chronic diseases of self or family members
-Care of Adult Child-definition of disability is ADA
-Strict Attendance Policies leads to increased open leaves for
protected time off
-Winter Holidays, Summer Time, Weekends
(seen often with high PTO balances)
Intermittent FMLA Management
Verify the doctor is qualified to certify FMLA
Consult with Medical Professionals
Verify the certification is complete; frequency and duration are clearly indicated
Frequency and duration is checked for each absence and if trends develop, request is made for updated information
Check patterns of multiple intermittent leaves which may be indicated for one person; child's asthma, employee’s migraine, father's chemotherapy
Routinely analyze the file for patterns and every 60 days analyze the “day of the week” usage
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FMLA Facts
and Statistics
DOL FMLA Facts
2012: Approximately 10 million employees took FMLA leaves of
absence
Employees have utilized FMLA over 100 million times since it went into
effect in 1993
FMLA Facts and Statistics
Between 4% and 10% of U.S. employees are absent on any given day. (Employee Benefit News September 2010)
Lost time claims can cost organizations more than $19,000 per
employee per year. (Employee Benefit News September 2010)
40% of leaves are > 10 days (US Department of Labor, 2012)
It costs employers an average of $78,000 to defend an FMLA lawsuit,
regardless of outcome (U.S. Department of Labor Wage and Human Resource
Division 2006)
Employers using decentralized FMLA management are more at risk of
over-entitling their employees to FMLA leaves. (Mercer, Sept 2009)
Regulatory Outlook
Health Family Act - Federal Paid Family leave as an option
State Leave Laws
As of April 2013 - 96 bills since January 1, 2013
13 states have proposed paid family leaves
Military leaves – increase activity of employees taking extended leaves for injured service members and their parents; increased rest and recuperation leave from 5 to 15 days, coverage for all service members
Leave laws ever changing:
Federal Law: Major overhauls in 2009 and 2013
Multiple requirements surrounding eligibility, qualifying reasons, time available
DOMA impact on FMLA entitlement – June 2013
FMLA Metrics by Industry
(EMPAQ Annual Report, Program year 2010)
Internal FMLA Headaches
Inconsistent internal administration
Intermittent leave usually over 20% reported
Incorrect information relayed to employee
Supplementary use of sick and vacation time
Domestic Partner eligibility concerns
Integration of federal/state and company policies
Denying a leave based on not meeting the definition of a Serious
Health Condition
Cannot require employee to return to a Transitional Work
Assignment
Ever expanding and complex State Leave Laws
Companies Turn to Experts-Outsourcing
Impact of DOL 2013 Changes
More time off of work is protected
Why employers outsource
Consistency in administration
Risk avoidance (Litigation, HIPAA, GINA)
Compliance with the law
Reduce Internal Management Costs
Employer size 2007 2010
All employers 14% 25%**
100 – 999 employees 5% 13%*
1,000 – 4,999 employees 11% 29%*
5,000 or more employees 25% 37%**
10,000 or more employees 24% 39%**
** Up by 50% or more
* More than doubled
(Mercer Absence and Disability Management Survey, 2010)
Companies Turning to Experts
Case Law
&
Non-Compliance
Exposure
Failing to Train Supervisors
Hurley v. Kent of Naples, Inc (January, 2013)
– Employee fired after requesting leave. Hurley claimed
interference with his FMLA leave rights. Awarded damages of
over $750,000. Employers total cost with attorneys fees and
costs for both sides, exceeded $1.2M.
Planning: Train managers and supervisors on the basics of FMLA.
Have a clear process for managing FMLA within your organization
and enlist the aid of human resources.
Intersection of FMLA and ADAAA
Interstate Distribution Company – Class Action Suit
(November, 2012)
Interstate’s FMLA policy violated ADA. They had a “no
restrictions” policy. Denied reasonable accommodations and
automatically fired employees when FMLA exhausted with no
accommodations. ADA requires employers to offer reasonable
accommodations to disabled employees.
Judgment rendered: $4.85M
Planning: Employers need to ensure their polices do not interfere
with another entitlement an employee may have.
Interference – Preventing Double Dipping
Pellegrino v. Communications Workers of America (CWA) (3rd
Circuit Court of Appeals, 2012)
Pellegrino went on vacation while on FMLA leave and was fired
upon her return and sued for interference.
– CWA policy required:
Employees on paid sick leave must “remain in the immediate vicinity
of their home during the period of such a leave,” unless they obtain
prior written permission to travel.
Employees on FMLA leave must use their paid sick leave
concurrently until it runs out
The latter requirement is a common policy that federal law has deemed OK.
Planning: Appeals Court said that employers can require employees to
remain home during sick leave. The fact that the leave ran concurrently with
FMLA leave didn’t make the no-vacation rule illegal.
Misuse of Leave
Lineberry v. Richards (February 2013)
Richards was scheduled to go on a prepaid vacation to Mexico
the same month her FMLA started. With doctor’s approval, she
went to Mexico and posted her vacation photos on Facebook. (There she was having fun in a motorboat … lying on a bed holding beer bottles
… and even holding her two 15-pound infant grandchildren in her arms.)
While on leave, she sent her supervisor an email saying how
hurt she felt that her co-workers hadn’t given her a get-well card!
Instead of a get-well card, Carol’s supervisor replied with his
own email, saying, “The staff were waiting until you came back
from your vacation in Mexico to determine the next step.”
Planning: Clearly communicate that misuse of leave is grounds for
termination
FMLA Non-Compliance Costs
Employees who successfully sued for wrongful termination
based on FMLA Absence received on average between
$87,500 - $450,000 in damages (Source: EEOC)
According to the U.S. Department of Labor, managers and
supervisors can be sued directly and held personally liable for
paying damages (Shultz v. Advocate Health & Hospitals Corp.)
A federal jury recently awarded a Chase Manhattan regional
manager more than $2.2 Million for violations of the FMLA
(Lore v. Chase Manhattan Mortgage Corp.)
Non Compliance Penalties
Failure of the employer to provide the required written notice can be
considered “interference” with employee’s FMLA rights
Potential Costs
Employers may be liable “for:
compensation and benefits lost by reason of
the violation
for other actual monetary losses sustained
as a direct result of the violation
for appropriate equitable or other relief,
including employment, reinstatement,
promotion, or any other relief tailored to
the harm suffered
Direct cost of FMLA and Absence
Payroll costs due to unscheduled absences - $760,000 annually.
(Commerce Clearing House (CCH) Unscheduled Absence Survey)
Overall direct costs of FMLA nationally was $21 billion (Employment
Policy Foundation Analysis)
Lost productivity due to FMLA cost employers $4.8 billion in profit.
Employers paid $10.3 billion to replace workers who took FMLA
and paid $5.9 billion in healthcare coverage for employees on
FMLA.
Costs of unscheduled absence plans (sick leave, Short and Long Term
Disability, salary continuation, workers’ compensation) can add up to
4.4% of payroll (Marsh/Mercer Survey)
The most common method of covering unplanned absences is
OVERTIME WORK
Potential Cost of Mismanagement
Actions by employees:
Civil actions under State Laws
Civil actions under the ADA
lost wages, liquidated damages, prejudgment
interest, relief; attorneys’ fees, individual liability
Civil Actions by the Dept. of Labor
60% of actions filed with DOL are resolved in employees favor
Penalties for Non-compliance
recover lost wages, salary, employee benefits and actual monetary losses suffered
Class Action – Litigation $$
(Schultz v. Advocate Health and Hospitals Corp $12,000,000); (Charlene Roby v. McKesson $19,000,000)
Verizon Settlement – California $6,000,000 - 2011
Building a Business Case
and
Understanding Your Options
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Building a Business Case
Consistency
Compliance
Reduce administration expense
Reduces litigation exposure
HIPAA
Tracking tool
FMLA requirements
“Where are my employees?”
Productivity value
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Do Nothing
“As is” with best practices review
Invest in “human capital” (administrative, legal)
Invest in a technology solution
Outsource administration (tracking and/or management)
Other (hybrid models)
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Leave Administration Options
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Best Practices to Outsourcing
System Features/Technology
Counts time by federal, state, local requirements and company paid and
unpaid policies (roll backward, roll forward, fixed date)
Streamlines eligibility determination
Captures complex intermittent leave scenarios
System programmed for accuracy and administrative ease
Call center and telephone technology must be state of the art
Technology driven communication process to all levels
Ability to capture ROI – denied leaves
Best Practices to Outsourcing
Strong Processes
-Management of medical certification (not tracking of the leave)
-Medical escalation process
(managing complex issues)
-Legal escalation process
keeping employer informed of “red flags”
-Structured return-to-work process
-Intermittent absences managed to certification
Industry Best Practices:
“What Can I Do Right Now?”
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Industry Best Practices
1. Review and update leave policies for accuracy and thoroughness:
The law has recently allowed for more controls if documented
2. Develop leave policies which can be applied uniformly across
organization:
Provides for ease of use and reduced “inconsistency”
Reduces training complexity
Increases compliance
3. Centralize your approach to leave:
Significantly reduces exposure for inconsistent management
More comprehensive and accurate data
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Industry Best Practices (cont.)
4. Establish relationship between HR/Benefits and Risk Management:
Ensure tracking and consistency for work comp lost time
5. Seek out technology and its applications across all leaves:
Ensures compliance from Federal / State perspective
Ability to track and report
Best opportunity to manage “productivity”
Tracking, management, or both
Standalone or bundled
6. Set base line metrics that can be tracked against over time:
Data is power
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Questions?