4 FMLA HistoryEnactment The Family Medical Leave Act (“FMLA”) of 1993 was enacted on February 5, 1993 and became effective on August 5, 1993 for most covered employers.Revisions New regulations interpreting the FMLA were issued in November 2008 with an effective date of January 16, 2009, these amendments included active duty and military caregiver leave. Additional revisions issued February 6, 2013 (effective March 8, 2013) implementing National Defense Authorization Act for Fiscal Year 2010 and the Airline Flight Crew Technical Corrections Act.Accountability The United States Department of Labor is the governmental agency responsible for enforcement of the FMLA.Coverage Nearly 60% of employees meet all criteria for coverage and eligibility under FMLA.1Utilization Based a 2012 survey, 13% of all employees reported taking leave for a FMLA reason in the past 12 months.21, 2 Source: US Dept of Labor Wage and Hour Division, FMLA is Working (2013).
6 Employer ObligationsAn employer must, within predetermined time frames:Evaluate eligibility for leave- Hours worked Location- Tenure Employee StatusCalculate entitlement for leave- How much time available- Coordination with state leave lawsDetermine 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 lawsConfirm in writing within 5 business days of notice for leave:- Eligibility- Rights and responsibilitiesConfirm in writing within 5 business days of receipt of information:- Designation of leave
7 Methods for Calculating FMLA Leave Fixed year Method:Under the fixed 12-Month Period method, an eligible employee (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.Any other 12-Month period.Rolling Forward Method: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: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.Note: Flight crew employees have fixed entitlements of 72 days for ‘regular’ FMLA and 156 days for military caregiver leave
8 Who is Covered by the FMLA? Which employers are covered?Private Sector: 50 or more employees for at least 20 weeks in the current or preceding calendar year.Which employees can take FMLA leave?Been employed for at least 12 months (does not need to be consecutive)Any week in which employee is maintained on the payroll counts (including weeks when no work is performed)Employed at a site with 50 or more employees within a 75 mile radius of larger siteHas worked at least 1,250 hours during the 12 months prior to the leave request (consecutive)Only actual work time countedLeaves of absence, paid or unpaid, including FMLA leave, not countedPursuant to USERRA, employees returning from military service shall be credited with hours that would have been performed but for the military service.What about Temporary employees?Time worked counts toward employee’s hours and tenure requirementsNote: Flight Crew members have different requirements based on airline industry scheduling equivalentsSo which employers and employees are covered under the FMLA
9 When Can an Employee Take FMLA Leave? Birth of a childPlacement of a child for adoption or foster careTo care for a spouse, child, or parent with a serious health conditionBecause of the employee’s own serious health conditionBecause of a Qualifying ExigencyTo care for a family member injured in the line of duty – Military Caregiver leave
10 Birth of a Child Both mothers and fathers are eligible But if they work for the same employer, they are only entitled to 12 weeks jointlyThey can split up the leave however they wantCan overlapEach spouse eligible to take his or her own remaining weeks for other purposesRemember, this is a separate kind of leave from leave related to pregnancy
11 Adoption or Foster Care Covers absences required in order for the placement to occurAttorney meetingsCourt appearancesDoctor visitsGoing to pick up the childFoster care leave only applies to arrangements sanctioned by stateEmployer has right to request documentationRule applies even if children are relatives of your employees
12 Care for Loved Ones Spouse Son or daughter Parent Husband or wife as defined by state law.Includes common law marriageSon or daughterBiological childAdopted or foster childStepchildLegal wardAny child employee has day-to-day responsibility for (practical or financial care if the person intends to assume the responsibility of a parent)Under 18, or incapable of caring for herself due to mental or physical disability at the time FMLA leave is to commence.ParentBiological or adopted parentsDoes not include in-laws or grandparents, except if that individual acted as a parent to the employee when he/she was a childYou can request documentation – but proceed with care!
13 General Categories of Serious Health Conditions Inpatient carePregnancy-related conditionsContinuing Treatment: incapacity and treatmentChronic health conditionsPermanent long term conditionTreatment to prevent incapacitation or restorative surgery
14 Serious Health Condition: Examples AllergiesAsthmaAlzheimer’s diseaseDiabetesEpilepsyMental illnessRestorative/plastic surgeryafter an injuryRemoval of cancerous tumorsStrokeSubstance abuse* Remember: applies to employee or loved one
15 Examples of medically-related absences NOT typically covered by the FMLA Routine check-upsMinor illnesses, injuriesEven if there is a doctor’s visitChild falls on playground at school, needs stitchesEmployee goes to emergency room with chest pains, turns out to be gasElective cosmetic treatments not requiring inpatient careLasik eye surgeryBut if inpatient care is required (as part of standard treatment, or due to complications) it will qualify.Absences caused by substance abuseBut absences caused by treatment for addiction typically will be covered.
16 Military Amendments Active Duty Leave Up to 12 weeks of unpaid leave to address a qualifying exigency arising out of the fact that a spouse, son, daughter, or parent of the employee is on covered active duty (or has been notified of an impending call or order to covered active duty) in the Armed Forces.Covered active duty includes members of both the regular and reserve components of the Armed Forces.Covered active duty must involve deployment to a foreign country.Qualifying Exigency is specifically defined by the regulations.
17 Qualifying ExigencyTo address any issue that arises as a result of short notice deployment of 7 or less calendar days. (7-day limit on this leave)To attend military events and activities related to the active duty or call to active duty, includes family support or assistance programs and informational briefings.Child care and school activitiesTo arrange for alternate child careTo provide child care on an urgent immediate need basisTo enroll in or transfer to a new school or daycareTo attend disciplinary meeting with school or daycare (arises out of active duty or call to active duty).
18 Qualifying Exigency (continued) Financial and legal arrangementsMake or update financial or legal arrangements to address absence.To act as covered military member’s representative before an agency regarding military benefits.CounselingTo attend counseling (other than by healthcare provider) for oneself, the covered military member or the child, provided need for counseling as a result of active duty or call to active duty.R&R leave (15-day limit)To spend time with covered military member during periods of deploymentPost-deploymentTo attend ceremonies, briefings, etc. for a period of 90 days following the termination of active duty status.
19 Qualifying Exigency (continued) Parental CareMust be parent of servicemember who is incapable of self-careTo arrange for alternate care when the active duty or call to active duty status necessitates a change in existing arrangementsTo provide care on an urgent immediate need basis when the need to provide care arises from the active duty or call to active dutyTo admit or transfer to a care facility when admittance or transfer is necessitated by the active duty or call to active dutyTo attend meetings with staff at a care facility (e.g. hospice or social service providers) when meetings are necessary due to circumstances arising out of active duty or call to active duty“Catch-all”To address other events provided employer and employee agree it is a qualifying exigency and agree to timing and duration.
20 Military Caregiver Leave Leave to provide care for covered service member who is employee’s injured spouse, son, daughter, parent, “next of kin.”Covered servicemember - current member or veteran of either the Armed Forces, National Guard, or Reservesveteran’s discharge or release must be under conditions other than dishonorable during the 5-year period preceding the start of leaveOctober 28, 2009 – March 8, 2013 excluded from 5-year periodNot a SHC (serious health condition); a “serious illness or injury” incurred by service member in the line of duty on active duty, and which may render service member unfit for duty.Serious injury or illness extended to also mean those that existed before the beginning of the member’s active duty which were aggravated by service in line of duty on active duty.“In the line of active duty” is defined in military regulations to include any injury suffered while in the military, even if not caused by the performance of military duties, i.e. cancer.There is an exclusion for injuries caused by the service member’s misconduct.
21 Military Caregiver Leave An eligible employee is entitled to 26 work weeks of leave to care for a covered service member with a serious injury or illness during a single 12-month rolling forward period, regardless of the calculation method used by an employer.Different (and potentially separate) 12-month period(s)The leave entitlement is applied on “per-service member, per-injury basis” such that eligible employee may be able to take more than one period of 26 workweeks of leave if leave is to care for different covered service member or same service member with subsequent injury or illness; but maximum 26 weeks in each 12 month period.Employee entitled to both caregiver leave and regular FMLA (even for same SHC of covered military member).Maximum 26 weeks in each 12-month period for “regular FMLA” and “military caregiver leave.”Employer responsible for designating leave as FMLA qualifying.
22 Types of Leave Single Block of Leave: Intermittent Leave: Leave taken in separate blocks of time for a single illness or injury.Can be for planned treatmentsOr for conditions which “flare 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 qualifiesFMLA 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 policiesAn employee cannot be forced to take off more time than he needs
23 How Do You Deduct Leave for Intermittent or Reduced Schedule Absences? FMLA leave is based on the employee’s normal workweek.If employee normally works a 5-day week and takes off one day, the employer should deduct 1/5 of a week of FMLA leaveIf employee who normally works an 8-hour day is put on a 4-hour per day reduced leave schedule, he would use ½ week of FMLA leave each weekWhen employee works part time, FMLA deduction is made on a pro-rata basis by comparing new schedule with old schedule.If employee normally works 30 hours per week, but is put on a 20-hour per week reduced schedule, he is using 1/3 week of FMLA leave each week.
24 Intermittent and Reduced Schedule Leave Increment of time clarifiedEmployer must account for leave using increment no greater than the shortest period of time that employer uses to account for other forms of leaveIncrement cannot be greater than 1 hourCannot reduce by more than amount of leave actually takenIf increments for other forms of leave vary based on time of day or shift, FMLA increment can vary as long as it remains consistent with other forms of leave taken at the same time of the dayFlight Crew increment no greater than 1 day
25 Tips for Managing Intermittent Leave Remember eligibility rule – once employee is deemed eligible, he remains so for 12 months going forwardBut he still can only take 12 weeks during your chosen 12-month periodAlways require medical certificationForm should specifically state whether intermittent or reduced leave is required – send it back if it does notRequire recertification as allowed by the regulationsRequire foreseeable leave to be scheduled so as to be least disruptive to your operations
26 Tips for Managing Intermittent Leave Consider possibility of temporary transfer to a position where intermittent absences won’t have such an impactThis is only allowed for planned medical treatmentCarefully track all timeBe careful about enforcing attendance policiesCheck with Human Resources
28 FMLA/Leave Management Services Scope and complexity of the lawKey: colored areas indicate stateswith additional leave regulations
29 State Leave Laws FMLA-like Leave Laws Pregnancy disability Bonding Bone marrowVolunteer Fire Fighters (Emergency workers)School Activities Leave LawsDomestic Violence/Crime Victim Leave LawsKin Care
30 Top 10 Mistakes Improperly determining eligibility “Deeming” employees FMLA eligible3. Failure to providerequired noticesUsing a calendar year 12 month periodFailure to calculate leave entitlement appropriatelyFailure to properly designate FMLA timeInappropriate use of medical certificationsFailure to request a new certification and redetermine eligibilityin a new leave yearImproper use of recertifications10. Failure to monitor intermittent leaves closely
31 The risk of Non-compliance Failing to comply with the law can be costly.Managers can be held personally responsible for violations.Companies can be faced with expensive legal fees and settlement fees.The Case:In Schultz v. Advocate Health and Hospitals Corp., a long-time employee alleged his former employer terminated him in retaliation for using FMLA to care for his two ill parents.The employee took intermittent leave over several months and during this period began having problems with his supervisors who established performance standards he was unable to meet. The problem escalated until the employee was terminated.The Result:A federal jury awarded $11.65 million to the employee. The award consisted of $10.75 million against the employer and $900,000 individually against the two supervisors.11 Schultz v. Advocate Health and Hospitals Corp., N.,D. Ill., No. 01 CV 702, 10/30/02.
32 The Risk of Non-compliance Failing to comply with the law can be costly.Managers can be held personally responsible for violations.Companies can be faced with expensive legal fees and settlement fees.The Case:In Allen v. A.G. Edwards & Sons*, Inc., the Plaintiff, Donald Allen brought suit against his employer, A.G. Edwards & Sons, Inc. for violations of the ADA and FMLA as well as State Laws on constructive discharge. In 2001, he was diagnosed with Bi-Polar disorder and briefly hospitalized. When he returned to work, the company refused to reinstate him to his old job. A.G. Edwards had options under FMLA and ADA but was concerned about the Plaintiffs ability to perform his job. Allen claimed he was demoted to a Financial Consultant job that required him to report to the former Assistant Branch Manager and was not reinstated to an equivalent position. The Employer argued that there was no FMLA violation because they had returned him to a manager position.The Result:The arbitration panel ultimately found for the Plaintiff and found that the Employer violated the FMLA . Allen was awarded 1.25 million dollars.*NASD # , June 26, 2006
33 The Risk of Non-compliance Failing to comply with the law can be costly.Managers can be held personally responsible for violations.Companies can be faced with expensive legal fees and settlement fees.The Case:Lubke v. Arlington*. The Plaintiff, Kim Lubke sued the City of Arlington, alleging he was discharged in violation of FMLA as a result of missing work to care for his ill wife. Lubke was scheduled to work from December 31, 1999 through January 1, On December 30, 1999, Lubke telephoned a call box and left a message stating that he would not be working during the Y2K weekend because he needed to stay home with a sick wife. Lubke was terminated for dereliction of duty, unauthorized absence and insubordination. At trial, the employer asserted that Lubke’s leave was not protected by the FMLA because he failed to provide timely and adequate medical certification required supporting his claim leave.The Result:The jury rejected the employers claim and found that the employer had violated the FMLA and awarded Plaintiff over 1 million dollars in damage. On appeal, the Fifth Circuit affirmed the jury verdict. *2006 WL , June 30, 2006US Court of Appeal, Fifth Circuit
34 The Risk of Non-compliance Failing to comply with the law can be costly.Managers can be held personally responsible for violations.Companies can be faced with expensive legal fees and settlement fees.The Case: Lore v. Chase Manhattan Mortgage Corp*. The Plaintiff, Nicholas Lore, requested leave to address several health issues. He was told an additional manager would be hired to assist with his responsibilities and enable him to take leave. When the additional manager was not hired, Lore inquired of his manager again requesting leave. Less than one month later, Lore was terminated. Lore sued Chase Manhattan for failing to grant him, an eligible employee, leave under the FMLA. In addition, Lore argued Chase Manhattan unlawfully retaliated against him for his attempts to exercise his rights under the FMLA.The Result: A jury found for the employee and awarded him $2,227,241. With liquidated damages equal to the amount of the verdict and prejudgment interest added in, the recovery equaled between $6.2 and $7.6 million.*2008 Lore v. Chase Manhattan Mortgage Co., 2008 WL (N.D. Ga., 2008)
35 The Risk of Non-compliance Failing to comply with the law can be costly.Managers can be held personally responsible for violations.Companies can be faced with expensive legal fees and settlement 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 state 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 more than $1 million plus prejudgment interest. 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 (4th Cir. March 4, 2009)
36 What Can You Do About Abuse of FMLA? Strictly follow certification requirementsDon’t be afraid to seek clarification or ask for second or third opinions, particularly when dealing with employees with a history of attendance problemsBe consistent – don’t selectively enforcePut everything in writing, it gives employees less “wiggle room”Stay in touch with absent employees – there is no prohibition against contacting them, asking about their statusKeep your eyes and ears open – if circumstances have changed, request recertificationBut your documentation must be solid
38 Key FMLA Findings From Employers The most frequently cited HR organizational challenges with FMLA*:Source: DMEC/Spring Consulting, 2012 Employer Leave Management Survey (2013).
39 The Challenges Facing Employers Leave policies must comply with both federal and state leave lawsEach leave request must be individually evaluated for eligibility and qualifying conditionsDocumentation must be collected, verified, recorded and filed for every leave requestManagers may be found to be individually liable. Employers are subject to fines and/or other penalties if there is a violation of the FMLAIntermittent leaves are difficult to trackIt is difficult to coordinate STD & FMLA when they are outsourced separatelyRetention and termination of employeesProductivity and employee moraleIndirect costs of covering absences (overtime, temporary workers, outside contractors)
43 The Costs of In-house Administration ProductivityEmployee leaves disrupt work routines and cause confusion and distraction among remaining staffLeaves can require replacement workers and/or overtime wagesManagers must consider any impact of FMLA absence separately from otherperformance issues, complicating the entire management processLegal/ComplianceState leave laws are numerous and change often. Employers and their legal counsel must constantly survey court rulings and changes in the laws to remain up-to-date.Failing to comply with the law can be costly and managers can be held personally responsible for violationsLitigation costs are roughly $100K to $200K per claim not including settlement costs.1Tracking & AdministrationAbout half of employers report that the cost of complying with FMLA has increased over the years. Less than 1% said the cost decreased.2Other tracking and administration costs include maintenance of records, storage and supplies in conjunction with the administration of other benefits such as STD and workers compensation.1 Based on Unum internal experience, 2007.2 ABT Associates for U.S. Dept of Labor, Family and Medical Leave in 2012: Technical Report (2013).
44 FMLA Administrative Options In-Source versus Out-Sourcing-Factors to consider:Employer SizeDemographicsIndustryLocation and number of operational sitesAbsence Management PhilosophyCompany CultureCurrent Capabilities
45 Outsourcing Evaluation - Look for Robust Leave Management Services Capabilities Whether managing in-house or with a Carrier/ TPA, look for these capabilities:Single integrated solution, one vendor administering STD and FMLASingle point of intake (STD/FMLA)Web based reporting that allows drill down into dataReal time updates to changes in state leave laws or federalIn-house legal and technical expertise, includes newsletter to employerProven scale with large customer base and covered lives, strong customer persistencySuperior customer satisfaction survey resultsAdministration for all separate state leave lawsLook for case studies showing enhanced productivity though reduction of lost timeIndemnification
46 The Case for Integration Because of the significant overlap that exists between short term disability and FMLA leaves, managing these leaves separately can cause additional costs and result in employees absent from work longer than entitled.
47 Clients benefit from our Centers of Excellence Employeror EmployeeToll-free callSTD SpecialistQuarterback of the overall processDetermine eligibilityAssess medical expertise for disabling conditionEvaluate functional capacityComplete job analysisCalculate benefitsSupport return-to-work effortsSupport integration with health programsAbsence Management SpecialistIntake new leave/Claim and inform employeeSet expectations and next stepsRecord intermittent hoursAnswer questions related to leave and disability claimKnowledgeable aboutcustomer’s unique needsFMLASpecialistFMLA SpecialistFor disability claims, follows STD decisionState and Federal leave eligibility and designationCoordination between Federal, State and Corporate policiesFamily leave, bondingIntermittent management
48 Lost Time CostsThe Total Financial Impact of Employee Absences Survey Highlights October 2008Mercer Guy Carpenter, Oliver Wyman
49 Lost Time CostsThe Total Financial Impact of Employee Absences Survey Highlights October 2008Mercer Guy Carpenter, Oliver Wyman
50 The Big Picture!The Total Financial Impact of Employee Absences Survey Highlights October 2008Mercer Guy Carpenter, Oliver Wyman
51 Case Study-Intermittent Leave Management* Company-Outdoor Clothing and Gear Retailer# US Employees4,500 year round11,500 at peak (December)Products & Services – Retail SalesOffering clothing and outdoor gear for customers to enjoy the outdoors.Contact Centers provide world class legendary service to customers4 year round centers & 1 seasonal center in Northern New EnglandHandle inbound order & customer service calls 24 hrs/day, 7 days/week days a yearDaily Call Volume: 35,250 calls off peak; 133,500 calls during peakCall Center Operations are supported by centralized planning functions(Finance, Systems/Technology, Quality, Training, Workforce Planning)*This case study is true, although the employer name and other identifying characteristics have been removed or changed to preserve confidentiality.
52 Case Study-Intermittent Leave Management 1,170 call center staff year round increasing to over 4,340 employees at PeakAnnual Turnover: 7-8%Short term disability Absence in ‘05 – 2,850 days (est. equivalent of 11 FTE’s)Workers’ Compensation Lost Time in ‘05 – 53 daysIntermittent FMLA Absence:Year prior to outsourcing:Equivalent of 1,100 days or est. 92 days/monthFirst 5 months after outsourcing:Reduced to the equivalent of days or est. 38 days/month58.7% reduction in lost time