DOL's FMLA Regulations Offer Employers Life Preserver, Not Raft

March 11, 2008

The DOL received a lot to think about last year after receiving more than 15,000 comments on how to change FMLA. Last month, the DOL returned the favor by issuing 127 pages of proposed regulations.

The rules include a considerable number of clarifications and correct the 1995 regulations where they conflict with the Supreme Court ruling in Ragsdale v. Wolverine World Wide. However, the two areas of greatest need were a tightening of the intermittent leave rules and a more workable definition of serious health condition. Those two issues are largely unaddressed. Employers may not begin relying on the new regulations, forms and notices while they are in proposed format.

For a more complete analysis of the changes, please join us on Wednesday, April 9, 2008, for an FMLA webinar (details at www.infinisource.net). The following are some of the more significant changes proposed in the regulations:

Coverage

• Professional Employer Organizations (PEOs). PEOs would not be considered as joint employers with their client companies as long as they simply perform administration functions, do not have hiring-firing responsibilities and do not benefit from the employees’ work.
• The 12-month eligibility requirement. Employees must have 12 months of service before they are eligible for FMLA. While this service need not be consecutive, any service before a break in service of five or more years would not be counted, unless it was for military service or an agreed upon, unpaid leave (e.g., a sabbatical). A person must meet the 12-month requirement before any leave is considered FMLA leave.
• Serious health conditions. The DOL did not exclude colds and flu from the definition, despite legislative history indicating it should do so. It did allow that the continuing treatment requirement of two visits to a health care provider must occur within 30 days, unless there are extenuating circumstances.
• Health care provider. If it was not clear before, physician assistants would be considered health care providers.

• Counting holidays. The DOL provided a simple rule for whether you count holidays against the employee’s 12-week total. If the employee needs less than a full week of FMLA, then the holiday would not be counted; otherwise, you would count the holiday.
• Intermittent leave. Intermittent leave rules currently require employees only to attempt to schedule time off so as to not disrupt operations. The proposed regulations would raise the standard slightly to requiring a reasonable effort.
• Paid leave substitution. The DOL clarified that employees must follow the employer’s policies to substitute paid leave for unpaid leave and that employers must notify employees of any additional requirements.
• Lapse of health plan premium payments. If it was not clear before, it should be now. An employee whose coverage is cancelled due to non-payment is entitled to reinstatement upon return from FMLA leave.
• Perfect Attendance bonuses. The DOL provided a common sense correction to the prior rule that someone taking time off for FMLA should still be eligible for an attendance award.
• Waivers and releases. One of the most troublesome aspects of the 1995 regulations was the prohibition against employees ever waiving their FMLA rights. A common employment practice is to condition severance pay on the execution of a waiver that releases all legal claims. The proposed regulations would clarify that past FMLA claims may be waived, future ones may not.

• Notices. The DOL has given new names to three types of notices. First, the General Notice is simply the FMLA poster that needs to be placed in conspicuous places at the worksite. It contains several revisions from the prior version. Second, the Eligibility Notice is Form WH-381, which has also been changed. It notifies an employee as to whether he or she has been approved for FMLA. Third, the Designation Notice is the means by which an employer designates FMLA leave, currently Form WH-382. The proposed regulations would increase the time for issuing this notice from two to five business days after sufficient information is available to make the determination.
• Employer designations. Per the Ragsdale opinion, employers are permitted to retroactively designate FMLA leave. However, if an employee can show individual harm by this action, the employee may be able to collect any lost wages and benefits and other damages.
• Employee notice for foreseeable leave. Recall that foreseeable leave requires at least 30 days notice from the employee (e.g., birth of a child). The DOL would require the employee to provide an explanation if and when the 30-day notice requirement was not practicable, typically within one or two business days of when the need arises. The DOL further would make it clear that an employee’s failure to adhere to these rules could cause a delay or denial of FMLA.
• Employee notice for unforeseeable leave. Employees would have to provide the employer with sufficient information that leave is needed. Simply calling in sick would not be sufficient.

• Medical certifications. The DOL went to work in this area. The certification form itself (currently Form WH-380) has been revamped. Employers could reject incomplete certifications, including those with information that is vague or non-responsive. Employers would have to provide at least seven days to cure any certification deficiencies. Employers would also be able to contact the health care provider directly for clarification purposes.
• Recertifications. Even where the duration of the serious health condition is listed as indefinite, employers would be allowed to recertify every six months. Also, employers would be able to include with the recertification an absence record and request that the health care provider validate that it is consistent with the serious health condition.
• Fitness-for-duty certifications. Employers would be able to contact health care providers in these situations as well, if the certification needs clarification. The employer could provide the health care provider a copy of the job description and have the health care provider certify that the employee can perform the job’s essential functions. Employees on intermittent leave could be required to provide a new fitness-for-duty certification every 30 days.

A comment period is in effect for the proposed regulations through April 11, 2008. In addition, the DOL sought comment on certain issues related to the new type of FMLA leave that is currently in effect: military family leave. This is a result of the National Defense Authorization Act that became law in January.

As always, Infinisource will look to provide input on issues that are most critical to employers. Until the regulations, forms and notices are finalized, employers are encouraged to become familiar with them and ready themselves to make changes to existing policies, notices, and procedures.

A copy of these regulations is available under the Wage and Hour heading of the February 11, 2008, Federal Register: www.access.gpo.gov/su_docs/fedreg/a080211c.html.