COVID-19. What Employers Can do Now – Part 5.

Late on March 18th, President Trump signed into law the Families First Coronavirus Response Act (HR 6201), which is aimed at containing the widening effects of COVID-19. Among other things, the Families First Act creates several significant new leave and sick pay obligations for covered employers.  Those obligations will go into effect  on April 2, 2020, and expire December 31, 2020.

FMLA Leave

First, the Act creates the “Emergency Family and Medical Leave Expansion Act” which will give eligible employees of companies with fewer than 500 employees the right to take leave from their jobs for certain qualifying needs. An eligible employee is one who has been employed by the employer for 30 or more days and who has a “qualifying need related to a public health emergency.” Both full- and part-time employees are eligible.  A “qualifying need” is defined as being unable to work (or telework) due to a need for leave to care for the employee’s minor child if the child’s elementary or secondary school or place of care has been closed, or a child care provider is unavailable, due to a public health emergency.

Significantly, the provisions in the original version of HR 6201 allowing for FMLA leave due to an employee exhibiting symptoms of COVID-19 or to care for a family member exhibiting symptoms of COVID-19 were removed from the final legislation.

If an employee takes qualifying leave under the FMLA Expansion Act, the employee can take the first 10 days of leave as unpaid leave. The employee may elect to use any accrued vacation, personal or medical or sick leave instead of taking unpaid leave. After the 10 days, the employer shall provide partial paid leave for each additional day of qualifying leave. The payment for leave must be equal to at least 2/3 of the employee’s regular rate of pay multiplied by the number of hours the employee would otherwise have been scheduled to work. For employees without a fixed schedule, the employer can use a 6-month average of their daily hours worked.  Pay is capped at $200 per day and $10,000 in total per eligible employee.  Employees are entitled to take up to 12 weeks for this new qualifying need or the usual FMLA-qualifying reasons.  Employees taking leave would be entitled to job restoration.  Smaller employers (i.e., those with less than 25 employees) may be able to deny reinstatement under certain very limited circumstances provided they make reasonable efforts to offer the employee an equivalent alternative position.  If those efforts fail, the employer must attempt to contact the employee to offer an equivalent position that becomes available within 12 months of when the health emergency concludes or the employee’s leave ends, whichever is earlier.

The Act also gives the Secretary of Labor the right to issue regulations exempting employers with less than 50 employees from the leave obligation if it is determined that the obligation would “jeopardize the viability of the business as a going concern.” It remains to be seen exactly if and how this will be implemented, but it appears that this exemption would be handled on an employer-by-employer basis.

The Families First Act did not change the FMLA’s health benefit continuation provisions, which requires an employer to continue group health coverage for an employee on FMLA leave.  Whether an employee’s other benefits will continue if the employee takes leave for a public health emergency depends on the terms of the benefit plan documents and leave policies. Whether an employee’s benefits will continue during the paid sick leave provided under the Act (discussed below) also depends on the employer’s benefit plan documents and leave policies, so employers should check their benefit plan documents and leave policies. Plan amendments may be necessary to change your benefit continuation policies or procedures. 

Sick Leave

The Families First Act also creates the “Emergency Paid Sick Leave Act” which requires all employers under 500 employees to provide paid sick time to all employees (even new hires and part-time employees) who are unable to work or telework because:

  1. The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19
  2. The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19
  3. The employee is experiencing symptoms of COVID 19 and is seeking a medical diagnosis.
  4. The employee is caring for an individual who is subject to a quarantine or isolation order related to COVID-19 or who has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
  5. The employee is caring for a son or daughter of the employee if the school or place of care of the son or daughter has been closed, or their child-care provider is unavailable due to COVID-19 precautions.
  6. The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and Secretary of Labor.

Full time employees who qualify for paid sick time are eligible for up to 80 hours of paid leave.  Part time employees are entitled to leave in an amount equal to the average number of hours they work over a two-week period.   Employees must receive full pay, up to $511 per day and $5,111 in total, for time missed due to their own health reasons (reasons 1-3 above), and must be paid two-thirds (2/3) pay, up to $200 per day and $2,000 in total, for time missed to care for a child or another individual, or because they are off work due to other approved “substantially similar conditions” (reasons 4-6 above).  Unused paid sick leave does not carry over from year-to-year and does not have to be paid out upon termination of employment.

Paid Sick Leave is in addition to any other paid leave the employee is entitled to, so for Michigan employers, that means it is in addition to leave time under the Paid Medical Leave Act. 

Other Notable Provisions

The Families First Act will provide dollar-for-dollar payroll tax credits for employers to help offset the cost of paid FMLA leave and paid sick leave. 

The Act prohibits any cost-sharing for diagnostic products for the detection of COVID-19 and for health care provider office visits, urgent care center visits and emergency room visits that result in an order for or administration of the diagnostic product. The law also prohibits any pre-authorization or other medical management requirements for such services.

COVID-19. What Employers Can do Now – Part 4.

None of you are going to be surprised that everybody is publishing something about what is going on with COVID-19. I thought I would take a second to put everything we at good old WN+J have done, from employment information, to benefits information and even some tax and insurance information. So here we go:

COVID-19: Important Employee Benefit Considerations
http://www.wnj.com/Publications/COVID-19-Important-Employee-Benefit-Considerations
HR 6201 – The Impact to Employers and Employees
http://www.wnj.com/Publications/HR-6201-%E2%80%93-The-Impact-to-Employers-and-Employees
HR 6201 to Create Tax Credits to Help Employers Amid COVID-19 Crisis
http://www.wnj.com/Publications/HR-6201-to-Create-Tax-Credits-to-Help-Employers-Am
Coronavirus: Insurance Coverage for Business-Related Losses?
http://www.wnj.com/Publications/Coronavirus-Insurance-Coverage-for-Business-Relate 12
Federal Agencies Issue COVID-19 Guidance and Resources to Assist Employers and Employees
http://www.wnj.com/Publications/Federal-Agencies-Issue-COVID-19-Guidance-and-Resou
Responding to the Threat of COVID-19 in Your Workforce
http://www.wnj.com/Publications/Responding-To-the-Threat-of-COVID-19-in-Your-Workf

So that should be everything we have published so far. Like everything else in this weird time we are living, these things will be changing fast, so I will try to keep this as up to date as I can.

COVID-19. What Employers Can do Now – Part 3. UPDATED

Here is the latest update on what is going on in DC from Brianna Richardson of our Employee Benefits Group.  Well, when things move this fast, we are going to have to do some things we don’t normally do, and I am starting with updating this post.  Brianna did such a good job getting this done that we had it posted before the bill was actually passed.  The bill passed by the House had some changes in it from the proposed Bill Brianna reviewed.  Here is what the Bill as passed has to say about your obligations as an employer.  DON’T’ FORGET, the Senate still has to deal with this and then the President has to sign it, so it may change again.  If it does we will update this post again.

Yep changes have caught up to this one, Go here.
http://zomichiganemploymentlaw.wnj.com/?p=863

COVID-19: What Employers Can do Now – Part 2.

Well, things have changed just a bit since I last posted on this subject, so here is what we are going to do.  In this post I am just going to give the links to the most up to date information we have from the CDC, OSHA, the DOL and the Michigan Department of Health and Human Services.  In later posts we will talk about what else is happening, including the bill currently before Congress.

So, here are the links to the most up to date information from the various government agencies:

The CDC’s resources for Businesses and Employers is here:  https://www.cdc.gov/coronavirus/2019-ncov/community/organizations/businesses-employers.html

This link to the Interim Guidance for Businesses and Employers is here:  https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html

We also have Interim Guidance from OSHA, both generally and for employers, that you can find here: https://www.osha.gov/SLTC/covid-19/controlprevention.html, and here: https://www.osha.gov/Publications/OSHA3990.pdf, respectively.

The current FAQs from the DOL which you can find here: https://www.dol.gov/agencies/whd/pandemic

Finally, you will want to check out the EEOC’s guidance on the ADA, the Rehab Act and the Coronavirus here:  https://www.eeoc.gov/eeoc/newsroom/wysk/wysk_ada_rehabilitaion_act_coronavirus.cfm, which links to the Guidance the EEOC issued during the H1N1 pandemic here:  https://www.eeoc.gov/facts/pandemic_flu.html

Don’t forget, when you are thinking about conducting medical tests, like taking all employees’ temperatures, this guidance says: 

Direct threat is an important ADA concept during an influenza pandemic.

Whether pandemic influenza rises to the level of a direct threat depends on the severity of the illness. If the CDC or state or local public health authorities determine that the illness is like seasonal influenza or the 2009 spring/summer H1N1 influenza, it would not pose a direct threat or justify disability-related inquiries and medical examinations. By contrast, if the CDC or state or local health authorities determine that pandemic influenza is significantly more severe, it could pose a direct threat. The assessment by the CDC or public health authorities would provide the objective evidence needed for a disability-related inquiry or medical examination.

During a pandemic, employers should rely on the latest CDC and state or local public health assessments. While the EEOC recognizes that public health recommendations may change during a crisis and differ between states, employers are expected to make their best efforts to obtain public health advice that is contemporaneous and appropriate for their location, and to make reasonable assessments of conditions in their workplace based on this information.

Which gets us to what is going on at the state level.  That is important too. For those of us in Michigan, the State has a website for here:  https://www.michigan.gov/coronavirus

You should also check out this News Release from the State https://www.michigan.gov/coronavirus/0,9753,7-406-98158-521463–,00.html, which links to a PDF MDHHS, Interim Recommendations for COVID-19 (final).pdf

This last link from the State has the following current recommendations for workplaces:

  1. Encourage employees to stay home when sick and to notify supervisors of illness.
  2. Communicate and reinforce best practices for washing hands covering coughs and sneezes.
  3. Regularly clean and disinfect frequently touched surfaces like doorknobs, keyboards, cell phones, and light switches.
  4. Ensure hand hygiene supplies are readily accessible throughout the workplace.
  5. Encourage staff to tele-work when feasible, particularly individuals at risk of severe illness
  6. Implement social distancing measures as feasible, including limiting in-person meetings.
  7. Limit large work-related gatherings, (e.g., staff meetings and after-work functions).
  8. Limit non-essential work travel.
  9. Cancel or postpone large gatherings, conferences, and sporting events (e.g., greater than 100 people in a shared space).
  10. Discourage employees from eating meals in a large group setting such as a cafeteria
  11. Tailor continuity of operations plans to the COVID-19 threat.

That is it for now, but we will have more as it becomes available.

What’s on Second? New Regulations on Joint Employment under the FLSA – Part 2.

Yesterday we talked about the fist scenario under the new DOL regulations on joint employment under the FLSA.  Today we will talk about the second scenario the DOL gives.

(e)(1) In the second joint employer scenario, one employer employs a worker for one set of hours in a workweek, and another employer employs the same worker for a separate set of hours in the same workweek. The jobs and the hours worked for each employer are separate, but if the employers are joint employers, both employers are jointly and severally liable for all of the hours the employee worked for them in the workweek.


29 CFR § 791.2(e)(1).

Now here the DOL does not use the same 4-point test as they did in the first scenario.  Instead:

(2) In this second scenario, if the employers are acting independently of each other and are disassociated with respect to the employment of the employee, each employer may disregard all work performed by the employee for the other employer in determining its own responsibilities under the Act. However, if the employers are sufficiently associated with respect to the employment of the employee, they are joint employers and must aggregate the hours worked for each for purposes of determining compliance with the Act. The employers will generally be sufficiently associated if:

(i) There is an arrangement between them to share the employee’s services;

(ii) One employer is acting directly or indirectly in the interest of the other employer in relation to the employee; or

(iii) They share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other employer. Such a determination depends on all of the facts and circumstances. Certain business relationships, for example, which have little to do with the employment of specific workers—such as sharing a vendor or being franchisees of the same franchisor—are alone insufficient to establish that two employers are sufficiently associated to be joint employers.


29 CFR § 791.2(e)(2)(i) – (iii).

Scenario number 1 makes a lot of sense; we see that temp employee situation every day.  But why this one?  Well, what the DOL (and the courts for years) are preventing here is a situation where two separate say corporate entities or LLC’s or even partnerships hire the same employee and then work that employee 30 hours for one corporation and 30 hours for the other corporation in the same workweek.  If the employers are not “joint employers” that employee gets 30 hours of straight time from one employer and 30 hours of straight time for the other employer.  But if they are joint employers, the same employee is entitled to 40 hours of straight time and 20 hours of time and one-half.  And both employers are liable for paying the overtime. 

(1)(i) Example. An individual works 30 hours per week as a cook at one restaurant establishment, and 15 hours per week as a cook at a different restaurant establishment affiliated with the same nationwide franchise. These establishments are locally owned and managed by different franchisees that do not coordinate in any way with respect to the employee. Are they joint employers of the cook?

(ii) Application. Under these facts, the restaurant establishments are not joint employers of the cook because they are not associated in any meaningful way with respect to the cook’s employment. The similarity of the cook’s work at each restaurant, and the fact that both restaurants are part of the same nationwide franchise, are not relevant to the joint employer analysis, because those facts have no bearing on the question whether the restaurants are acting directly or indirectly in each other’s interest in relation to the cook.


29 CFR § 791.2(g)(1)(i) & (ii).

29 CFR § 791.2(g)(1)(i) & (ii).

Under the prior guidance this is exactly what some employee groups were trying to do.  Work at two entirely separate McDonalds and sue McDonald Corporation for overtime.  Now don’t get too excited about going out and setting up a bunch of LLCs, there are limits to the protection the new regulations provide:

(2)(i) Example. An individual works 30 hours per week as a cook at one restaurant establishment, and 15 hours per week as a cook at a different restaurant establishment owned by the same person. Each week, the restaurants coordinate and set the cook’s schedule of hours at each location, and the cook works interchangeably at both restaurants. The restaurants decided together to pay the cook the same hourly rate. Are they joint employers of the cook?

(ii) Application. Under these facts, the restaurant establishments are joint employers of the cook because they share common ownership, coordinate the cook’s schedule of hours at the restaurants, and jointly decide the cook’s terms and conditions of employment, such as the pay rate. Because the restaurants are sufficiently associated with respect to the cook’s employment, they must aggregate the cook’s hours worked across the two restaurants for purposes of complying with the Act.


29 CFR § 791.2(g)(2)(i) & (ii).

If you want to see the new regulations you can find them here and if you are an employer who has questions, give me a call.

Who’s on First? New Regulations on Joint Employment under the FLSA – Part 1.

You know, over the years we have had occasion to discuss the issue of joint employment under the FLSA.  It was a big deal during the last administration.  In fact, back then we were talking about an Administrator’s Interpretation that the Obama DOL issued to “clarify” joint employer status under the FLSA.  That guidance was concerning in that it appeared to really broaden the scope of when a joint employer relationship existed.  It was such a big deal that we at WNJ spent a fair amount of time talking about what it meant.  We even did a panel discussion or two on the issue.  And then we got a new administration, and that new administration withdrew the guidance.  And we waited. 

The wait is over.  On January 16, 2020 the Department of Labor published final regulations on the issue.  These regulations amend 29 CFR Part 791 and are an attempt to clarify when a joint employer relationship exists.  As the DOL points out, it has been a while since Part 791 was updated:  “Since this 1961 update, the Department has not published any other updates to part 791 until this final rule.”  I think we would all agree that 59 years is a long time and a lot has changed about how the workplace works in that time.  So, what do the new regulations provide?  Well, including the preamble and all the required stuff, the Federal Register publication of the new regulations is 42 pages long.  We are not going into all of that.  I’m going to try to boil it down to a manageable bite-size bit or two for you.

Let’s start with why we care.  Under the FLSA if two employers are joint employers, both employers are “jointly and severally liable” for making sure the employee gets the minimum wage and probably more importantly, overtime.  So the new regulations say that there are really two scenarios under the FLSA where the joint employer analysis is relevant. 

(a)(1) In the first joint employer scenario, the employee has an employer who suffers, permits, or otherwise employs the employee to work, see 29 U.S.C. 203(e)(1), (g), but another person simultaneously benefits from that work. The other person is the employee’s joint employer only if that person is acting directly or indirectly in the interest of the employer in relation to the employee.


29 CFR § 791.2(a)(1)

.

What are we talking about here?  Most commonly we are talking about a situation where you run a company and you hire a temporary service agency to provide you with employees.  In this case, the DOL has articulated a 4-factor test to determine if a joint employer relationship exists:

Those four factors are whether the other person:

(i) Hires or fires the employee;

(ii) Supervises and controls the employee’s work schedule or conditions of employment to a substantial degree;

(iii) Determines the employee’s rate and method of payment; and

(iv)  Maintains the employee’s employment records.


Id

Now there are some ruffles and flourishes that explain all that but the important thing to remember is no single factor standing alone is enough and the fourth factor (maintaining records) is not enough standing alone.

So how are you supposed to know how to apply that to a real life situation, like for example I own a company and I retained a temp agency go send me temps?  Well, the DOL was nice enough to include some examples in the regs.

(6)(i) Example. A packaging company requests workers on a daily basis from a staffing agency. Although the staffing agency determines each worker’s hourly rate of pay, the packaging company closely supervises their work, providing hands-on instruction on a regular and routine basis. The packaging company also uses sophisticated analysis of expected customer demand to continuously adjust the number of workers it requests and the specific hours for each worker, sending workers home depending on workload. Is the packaging company a joint employer of the staffing agency’s employees?


29 CFR § 791.2(g)(6)(i).

Sound familiar?  Sure it does, it’s you if you use temps.  So what is the answer?  DOL gives us that too.

(ii) Application. Under these facts, the packaging company is a joint employer of the staffing agency’s employees because it exercises sufficient control over their terms and conditions of employment by closely supervising their work and controlling their work schedules.


29 CFR § 791.2(g)(6)(ii).

OK Steve, now give me an example where there is a joint employer relationship.  Don’t have to, the DOL did.

(7)(i) Example. A packaging company has unfilled shifts and requests a staffing agency to identify and assign workers to fill those shifts. Like other clients, the packaging company pays the staffing agency a fixed fee to obtain each worker for an 8-hour shift. The staffing agency determines the hourly rate of pay for each worker, restricts all of its workers from performing more than five shifts in a week, and retains complete discretion over which workers to assign to fill a particular shift. Workers perform their shifts for the packaging company at the company’s warehouse under limited supervision from the packaging company to ensure that minimal quantity, quality, and workplace safety standards are satisfied, and under more strict supervision from a staffing agency supervisor who is on site at the packaging company. Is the packaging company a joint employer?


29 CFR § 791.2(g)(7)(i)

(ii) Application. Under these facts, the packaging company is not a joint employer of the staffing agency’s employees because the staffing agency exclusively determines the pay and work schedule for each employee. Although the packaging company exercises some control over the workers by exercising limited supervision over their work, such supervision, especially considering the staffing agency’s supervision, is alone insufficient to establish that the packaging company is a joint employer without additional facts to support such a conclusion.


29 CFR § 791.2(g)(7)(ii).

See the difference?  Here it seems to be that the DOL considers day-to-day supervision the deciding factor.  And in most cases you supervise your temps, so you are (and always have been) a joint employer with the temp agency.

OK, that’s cool and surprisingly not that surprising.  What about scenario number 2?  Well, let’s talk about that next time shall we?

COVID-19. What can employers do now?

I assume you all have not been burying your head in the sand and you all know now that the COVID-19, that’s what the World Health Organization has labeled the current outbreak of Coronavirus, is sort of in the news. And I am equally sure you are all wondering what, as an employer, you should be doing about it.  Before we get into that, let’s do quick refresher on the Americans with Disabilities Act. Don’t forget, the ADA places some restrictions on employers and only allows medical examinations, where the employer can show that the exam is job related and consistent with business necessity, or there is a reasonable belief that the employee poses a direct threat to the health or safety of the individual or others.  See https://www.eeoc.gov/policy/docs/guidance-inquiries.html

That’s nice, but how do we know if there is a “direct threat” from COVID-19?  While we don’t have anything from the EEOC on COVID-19 yet, during the N1H1 flu outbreak the EEOC did published guidance called PANDEMIC PREPAREDNESS IN THE WORKPLACE AND THE AMERICANS WITH DISABILITIES ACT.  https://www.eeoc.gov/facts/pandemic_flu.html

In that guidance, the EEOC stated:

Direct threat is an important ADA concept during an influenza pandemic.

Whether pandemic influenza rises to the level of a direct threat depends on the severity of the illness. If the CDC or state or local public health authorities determine that the illness is like seasonal influenza or the 2009 spring/summer H1N1 influenza, it would not pose a direct threat or justify disability-related inquiries and medical examinations. By contrast, if the CDC or state or local health authorities determine that pandemic influenza is significantly more severe, it could pose a direct threat. The assessment by the CDC or public health authorities would provide the objective evidence needed for a disability-related inquiry or medical examination.

During a pandemic, employers should rely on the latest CDC and state or local public health assessments. While the EEOC recognizes that public health recommendations may change during a crisis and differ between states, employers are expected to make their best efforts to obtain public health advice that is contemporaneous and appropriate for their location, and to make reasonable assessments of conditions in their workplace based on this information.

So, relying on the EEOC, let’s go see what the CDC is saying. And sure enough, the CDC just published Interim Guidance for Businesses and Employers to Plan and Respond to Coronavirus Disease 2019 (COVID-19), February 2020. You can find it here:  https://www.cdc.gov/coronavirus/2019-ncov/specific-groups/guidance-business-response.html

And what are the CDC’s recommendations? 

Recommended strategies for employers to use now:

Actively encourage sick employees to stay home

Separate sick employees

Emphasize staying home when sick, respiratory etiquette and hand hygiene by all employees

Perform routine environmental cleaning

Advise employees before traveling to take certain steps

So basically the CDC is advising that you tell people to stay home when they are sick. A couple of things to keep in mind. First, “Separate sick employees” does not mean quarantine them or put them in the back corner of the plant. What the CDC is saying here is if somebody comes to work sick or gets sick at work, send them home. Second, the CDC is recommending you have a lot of tissues and hand sanitizer on site and you encourage employees to use them. Probably a pretty good idea.

One other thing the CDC says you should do that I want to point out, because this is a bit of a departure from what we would normally think, the CDC is specifically instructing that if you have a confirmed case of COVID-19 in the workplace, you need to tell your employees. 

If an employee is confirmed to have COVID-19 infection, employers should inform fellow employees of their possible exposure to COVID-19 in the workplace but maintain confidentiality as required by the Americans with Disabilities Act (ADA). Employees exposed to a co-worker with confirmed COVID-19 should refer to CDC guidance for how to conduct a risk assessment of their potential exposure.

Now this DOES NOT MEAN you tell everybody that Bill has coronavirus. It simply means you tell them they have been exposed and encourage them to get checked by their doctor.

If you are an employer and you want to discuss what else you can be doing and what all of this means for your workplace, give us a call.

Substitution of paid leave

This is the last one from Malania. If I want to keep doing this I’m actually going to have to start writing these things again. Bummer.

Back again, for yet another thrilling discussion of FMLA-related leave. Are you sick of me yet? I’m sick of me. But stay tuned for a topic I think you’ll find quite useful. You see, some of you may be so lucky to work at a company that allows employees to accrue paid leave benefits, sometimes referred to as sick leave. But when, if ever, does the employee have to use this paid leave they’ve worked to save up? Turns out:

If an employee does not choose to substitute accrued paid leave, the employer may require the employee to substitute accrued paid leave for unpaid FMLA leave.

29 CFR §825.207(a) (emphasis added).

So there you have it: a seemingly straightforward answer (for once). But let’s break this down just a little bit more before we throw in the towel, starting with the definition of “substitute.” Substitute here means that an employee’s paid leave will run concurrently with their unpaid FMLA leave: i.e. the employee will get paid for a portion of their FMLA leave, with the exact portion dependent on how many accrued paid leave days the employee has socked away.

Alright, that doesn’t sound so difficult. But you may now be wondering, when, if ever, can the employee choose not to take their paid leave? Because by this point, you’re certainly smart enough to know that there’s a legal hurdle, caveat, exception, etcetera, just waiting around the corner . . . .

So let’s look at that next. The first hurdle in determining when the employee can or must substitute paid leave for FMLA leave is figuring out whether the employee qualifies to take the paid leave in the first place:

An employee’s ability to substitute accrued paid leave is determined by the terms and conditions of the employer’s normal leave policy.

29 CFR §825.207(a).

This means that if the employee doesn’t meet the company’s criteria for using their paid accrued leave, the employee does not need to take it. But, in order to determine whether or not the employee can take it in the first place, you, as the employer, are required to:

[I]nform the employee that the employee must satisfy any procedural requirements of the paid leave policy only in connection with the receipt of such payment. If an employee does not comply with the additional requirements in an employer’s paid leave policy, the employee is not entitled to substitute accrued paid leave, but the employee remains entitled to take unpaid FMLA leave.

29 CFR §825.207(a).

Slightly convoluted, but the takeaway here is this: if the employee is told that they need to do something additional in order to use their paid leave and they don’t do it, the employee can still choose to take FMLA leave (assuming that the employee qualifies for it). Additionally:

If neither the employee nor the employer elects to substitute paid leave for unpaid FMLA leave under the above conditions and circumstances, the employee will remain entitled to all the paid leave which is earned or accrued under the terms of the employer’s plan.

29 CFR §825.207(b).

Essentially, if your employee has accrued paid leave, you cannot take that leave away from your employee merely because they could have used it and chose not to. Conversely, if your employee did not qualify for FMLA leave and took paid time off instead, that wouldn’t count against the employee’s future entitlement to FMLA. I think for most of you know that will logically make sense: how could you take away someone’s FMLA leave entitlement if they didn’t qualify for it in the first place? But I digress.

Let’s end this discussion by examining two other scenarios that might come into play and make this calculus a bit more daunting: disability leave and worker’s compensation.

We’ll tackle the disability leave first. The biggest takeaway here is that leave taken due to a disability may be designated by the employer as FMLA leave if it meets all of the necessary criteria. However,

(d) Because leave pursuant to a disability benefit plan is not unpaid, the provision for  substitution of the employee’s accrued paid leave is inapplicable, and neither the employee nor the employer may require the substitution of paid leave.

29 CFR §825.207(d).

Basically, the employee and the employer can agree to use some of the employee’s paid leave during this time if, for instance, the disability benefits do not fully cover the employee’s salary. But neither the employee nor the employer can require the use of the paid leave. Lucky for you (since I suspect you’re pretty tired of reading this by now), it’s more or less the same story with worker’s compensation: neither the employee nor the employer can require the use of paid leave, but the parties can agree to have the employee use the paid leave if the worker’s compensation doesn’t cover the employee’s full salary.

Interaction with the FLSA

Here is another one from Malaina.

Fair warning: this post will likely not be thrilling. I mean, c’mon, as lawyers, we’re paid to be boring and accurate, not to write you the latest page-turner! And while I really do try to spice things up for you every once in a while, this regulation in particular is just one of those most of us would rather not look at. Ever. However, as an employer, it should hopefully offer you some valuable guidance for handling intermittent or reduced schedule leave all while maintaining compliance with the Fair Labor Standards Act. This act, also known as the FLSA for short, interacts with and at times bumps up against FMLA policy. And as boring as it may be, what we’re about to cover is something you should be aware of.

Today, the interaction we’re going to focus on in particular is an employee’s exempt status under the FLSA, and we’re going to discuss how to ensure that an employee retains his or her exempt status even during FMLA intermittent or reduced schedule leave. But before we can get to that point, we have to first understand what it means to be “exempt” under the FLSA.

Being exempt under the FLSA means that you are exempt from minimum wage and overtime pay requirements. The most typical exemptions would be for executive, administrative, or other professional positions. These exempt individuals, rather than receiving hourly wages, receive a salary. Now, there are other hoops to jump through to qualify for one of these exemptions, but that is largely outside of the scope of this blog post. You simply need to know that some employees are exempt under the FLSA and that the goal for you as the employer is to keep them that way, even during FMLA leave.

So, how to make that happen? We start with this first premise:

(a) Leave taken under the FMLA may be unpaid. If an employee is otherwise exempt from minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA) . . . providing unpaid FMLA-qualifying leave to such an employee will not cause the employee to lose the FLSA exemption.

29 CFR §825.206(a).

Simple enough. Now, to understand this next part, we need to briefly discuss one of those FLSA hoops I (conveniently) skipped over earlier. The FLSA requires exempt employees to receive at least a fixed salary each week, with only certain very limited deductions to qualify as exempt. Yet, if someone is going on FMLA leave that is unpaid they are not getting their salary. Rather than lose their exempt status, however, the regulations provide that:

(a) [T]he employer may make deductions from the employee’s salary for any hours taken as intermittent or reduced FMLA leave within a workweek, without affecting the exempt status of the employee.

29 CFR §825.206(a).

Awesome and practical: the law for once makes some sense! FMLA reduced schedule or intermittent leave is by its nature, temporary. So we allow temporary adjustments to an employee’s pay without permanent repercussions to an employee’s exempt status under the FLSA.

But there is, of course, more. Sometimes, employees may be paid according to the “fluctuating workweek method of payment for overtime.” As a refresher, that is a provision that essentially allows the employee to take home a fixed salary each week (even though actual hours worked in the week might vary), and then to receive overtime pay at one half their hourly rate for any extra hours worked.

How does this interact with the FMLA differently? Basically, the answer is this:

(b) For an employee paid in accordance with the fluctuating workweek method of payment for overtime, the employer, during the period in which intermittent or reduced schedule FMLA leave is scheduled to be taken, may compensate an employee on an hourly basis and pay only for the hours the employee works, including time and one-half the employee’s regular rate for overtime hours.

29 CFR §825.206(b).

Let’s break that down just a little bit. Essentially, the employer can, rather than paying the employee a salary, start to instead pay the employee on an hourly basis during their FMLA reduced schedule or intermittent leave. The employer must do this during the entire time in which the employee is taking the leave, and the provisions also indicate that the employer must, if he chooses to follow this policy, use it uniformly for all employees paid according to the fluctuating workweek method. Essentially, this means that as the employer, you can’t just pick and choose when to apply this and when not to; you must be consistent. But an important thing to note:

(b) If an employer does not elect to convert the employee’s compensation to hourly pay, no deduction may be taken for FMLA leave absences.

29 CFR §825.206(b).

If this sounds like the ultimate legal “gotcha” you’re probably right. On the one hand you don’t have to convert to paying the fluctuating workweek employee on an hourly basis . . . but if you don’t, you have to continue to pay the employee their full salary without taking any deductions for the leave. I think we can all guess what most employers will choose to do on that one.

Last but not least, this portion of the Code of Federal Regulations ends with the reminder that all of these provisions only apply to FMLA-eligible leave and FMLA-eligible workplaces. If you need help, just remember: if the leave doesn’t qualify as FMLA leave, you can’t do any of this fancy finagling we’ve just discussed. If you do that, you risk forfeiting the exempt status of your employees under the FLSA or the employee’s eligibility for the fluctuating workweek method of payment.

Increments of FMLA leave for intermittent or reduced schedule

In our last blog post, we talked about intermittent leave or reduced schedule leave, and how as an employer, you may ask an employee to transfer roles during such a leave in order to better accommodate a changed work schedule. But let’s back up: once an employee has been granted the intermittent or reduced schedule leave, how, as the employer, can you account for it?

           (a)(1)  When an employee takes FMLA leave on an intermittent or reduced leave schedule basis, the employer must account for the leave using an increment no greater than the shortest period of time that the employer uses to account for use of other forms of leave provided that it is not greater than one hour and  provided further that an employee’s FMLA leave entitlement may not be reduced  by more than the amount of leave actually taken.


29 CFR §825.205(a)(1).

Let’s break that down. First, no matter how you calculate other types of leave, FMLA leave cannot be calculated in increments greater than one hour. Easy enough. But if the company calculates say, sick leave, in half hour increments, for instance, that means that an employee’s FMLA leave must also be calculated in at least half hour increments. FMLA leave can always be calculated in shorter increments, but never longer than the shortest increment the company uses for other types of leaves, and notwithstanding that, never longer than one hour increments.

Okay, you may be thinking, why does this matter to me? Truth is, it certainly won’t impact how you run your business on a day to day basis, but how leave is calculated does matter for both the employer and the employee on the margins. Additionally, as with any legal rule, there are some exceptions to these calculations that you should be aware of:

           (a)(2)  Where it is physically impossible for an employee using intermittent leave or working a reduced leave schedule to commence or end work mid-way though a shift . . . the entire period that the employee is forced to be absent is designated as FMLA leave and counts against the employee’s FMLA entitlement.


29 CFR §825.205(a)(2).

The examples of when it would be “physically impossible” for someone to leave or arrive to work mid-shift include that of a train conductor or an airplane pilot. So long as your work is more flexible than that, you can more or less ignore this exception as an employer. Even a nurse, who typically would work a twelve hour shift, for example, likely does not fall into this “physical impossibility” category, because while it may be inconvenient for a nurse to work just half a shift, it’s not, by definition, physically impossible.

Yet the exception that is more likely relevant to you as the employer and one that you should definitely be aware of, concerns overtime hours:

           (c)       If an employee would normally be required to work overtime, but is unable to do so because of a FMLA-qualifying reason that limits the employee’s ability to work overtime, the hours which the employee would have been required to work may be counted against the employee’s FMLA entitlement.


29 CFR §825.205(c).

The key to understanding this provision is differentiating between required versus voluntary overtime hours. Voluntary overtime hours are not included when calculating the amount of hours an employee’s leave will cover. For example, if the employee has voluntarily picked up overtime in the past but is only required to work a 40 hour week, the employee’s leave will be calculated based on the 40 hours. The fact that the employee does not want to volunteer to pick up overtime hours during their leave will not, then, count against their leave entitlement. If, however, the employee is normally required to work 50 hours a week including required overtime, then the employee’s leave will be calculated based on a 50 hour week. This means that if the employee cannot work the required overtime or chooses not to work it, it will count against the employee’s leave entitlement.

In effect, required overtime means that the employee is entitled to more leave (since leave is calculated based on the hours the employee works each week multiplied by the number of weeks), but it also means that if the employee chooses not to pick up overtime during their leave, it counts against their FMLA leave entitlement. On the flip side, voluntary overtime means the employee is entitled to less leave, but failure to pick up overtime will not count against their leave hours.

As you can see, how FMLA intermittent or reduced schedule leave is calculated and tracked does make a difference at the margins. How your employee’s leave will be calculated is certainly worth a discussion

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