The U.S. Department of Labor (DOL) issued its final regulations clarifying and interpreting significant changes to the Family and Medical Leave Act (FMLA) of 1993; the changes took effect Jan. 16. As you probably know, FMLA is the federal law that provides eligible employees the right to take up to 12 weeks of job-protected, unpaid leave for absences that, until these recent changes to FMLA, only stemmed from reasons such as caring for one's serious health condition or his or her immediate family members or for the birth or placement of a child.
The final regulations recently have been the subject of significant discussion following DOL's initial proposed changes to FMLA in February 2008. Those proposed changes were highlighted in "A new FMLA," May 2008 issue, page 40.
The new regulations were developed in response to the more than 4,600 public comments received after the proposed regulations were published and address the passage of military leave provisions in the National Defense Authorization Act (NDAA) for fiscal year 2008, multiple court decisions invalidating portions of DOL's former regulations, DOL's 15-year experience enforcing and administering FMLA, and extensive discussions with various stakeholders.
The final rules are intended to clarify existing provisions and alleviate the friction between employers and employees that resulted from previous ambiguities and inconsistencies. Although only time will tell whether DOL accomplished its objectives in formulating the final regulations, one thing is clear: Your obligations as an employer have changed, and you need to be prepared to address these changes when administering FMLA leave.
Military leave
Service member leave
DOL's new regulations clarify and define key terms and conditions set forth by the NDAA that former President Bush signed into law in January 2008. The NDAA significantly expanded FMLA by providing extended leave to eligible employees to care for covered service members or address a qualifying exigency arising from a covered family member's active duty status or notification of an impending call to active duty status in support of a contingency operation.
Specifically, FMLA now provides eligible employees with up to 26 weeks of leave in a single 12-month period to care for a covered service member who is an employee's spouse, child, parent or next of kin (meaning a service member's nearest blood relative) and a member of the armed forces who is undergoing medical treatment, recuperation or therapy; in outpatient status; or on the temporary disability retired list because of a serious injury or illness incurred in the line of duty.
Unlike traditional FMLA leave, service member family leave does not require a service member to suffer from a serious health condition and the leave is available not only to FMLA-covered family members but also to next of kin and parents of children of any age.
For purposes of service member family leave, "serious injury or illness" is defined as an injury or illness that may render a person medically unfit to perform the duties of his or her office, grade, rank or rating. "Outpatient status" refers to the status of a member of the armed forces assigned to a military medical treatment facility as an outpatient or a unit established for the purpose of providing command and control of members of the armed forces receiving medical care as outpatients.
Service member family leave generally is a one-time entitlement that does not renew each year as do other types of FMLA-qualifying leave. Employees may be entitled to take more than one period of 26 workweeks of leave only if the leave is to care for different covered service members or the same service member with a subsequent serious injury or illness. Employees are not entitled to an additional 26 weeks of service member family leave based on an aggravation or complication of the initial serious injury or illness for which the employee already received 26 weeks of leave.
Also, the 26-week leave entitlement includes an employee's 12-week FMLA leave entitlement to care for the serious health condition of the employee or an immediate family member or the birth or placement of a child.
Therefore, an employee who exhausts the 12 weeks of leave for his or her own serious health condition would be entitled to an additional 14 weeks to care for an eligible service member undergoing medical treatment during the same 12-month period. Alternatively, an employee who exhausts the entire 26 weeks of leave to care for a service member is not entitled to any additional time in a 12-month period to care for his or her own serious health condition.
Moreover, eligible employees may take the 26 weeks of leave intermittently or on a reduced leave schedule if medically necessary. As with other FMLA-qualifying leave, if an employee requests intermittent leave or leave on a reduced leave schedule, you may require the employee to transfer temporarily to an available alternative position for which the employee is qualified that has equivalent pay and benefits and better accommodates recurring periods of leave.
You may continue to require all such leave to be supported by a sufficient certification issued by a health care provider. DOL has developed a new form you may use for medical certifications for service member family leave. An employee also must provide, in the case of foreseeable service member family leave, at least 30 days' notice before the leave is to begin or, if the treatment date requires leave to begin in fewer than 30 days, notice as soon as practicable.
Finally, employees may elect (and you may continue to require employees) to substitute their accrued paid time off for any part of the 26-week service member family leave, and if an employee cannot return to work at the end of the scheduled service member family leave because of the continuation, recurrence or onset of the condition, you may require a certification issued by the service member's health care provider to that effect.
Qualifying exigencies
DOL's new rules also address the NDAA provisions that amended FMLA to provide eligible employees with up to 12 weeks of leave because of any "qualifying exigency" arising because an employee's child, spouse or parent is on active duty or has been notified of an impending call to active duty in support of a contingency operation. The rules now list the situations that fall within the scope of "qualifying exigencies," a term that previously had not been defined. Although the list of categories is exhaustive, it encompasses a wide range of events arising from a covered military member's active duty or call to active duty.
Specifically, covered employees now may take FMLA leave to:
Updated notice requirements
Eligibility notice
The updated regulations change the timing and content of the eligibility notice you must provide an employee after being notified of a need for FMLA leave. The updated regulation increases the time in which an employer must notify an employee whether he or she is eligible for FMLA leave from two days to five days. Eligibility requires working for 12 months and 1,250 hours and being employed at a work site with at least 50 employees within 75 miles. If an employee is not eligible for FMLA leave, the notice must state at least one reason for ineligibility.
Rights and responsibilities
The updated regulations also create an entirely new notice obligation for employers called a notice of rights and responsibilities. This notice must be given to employees at the same time as the eligibility notice. The rights and responsibilities notice is intended to inform employees of their rights and obligations (and consequences for any failure to meet those obligations) when requesting or qualifying for FMLA leave, while on leave and upon return from leave.
Among the information that must be included in the rights and responsibilities notice are whether the employee must provide medical certification or other information to substantiate the need for leave; the right (or requirement, at the employer's discretion) to substitute paid leave and any requirements for qualifying for paid leave; whether and how the employee must pay health care premiums while on leave; the right to job restoration upon completion of leave; and whether the employee is considered a "key employee" (a salaried FMLA-eligible employee who is among the highest paid 10 percent of all employees) who may not be entitled to job restoration.
The rights and responsibilities notice eliminates the need for "provisional" grants of FMLA-qualifying leave. Once the eligibility and rights and responsibilities notices have been provided, you may delay the actual designation of leave as FMLA-qualifying until five business days after you receive medical certifications and any other required information. DOL has prepared a prototype joint eligibility and rights and responsibilities notice, but you are not required to use that specific form.
Designation notice
The new regulations also change the timing and manner of an employer's notice designating leave as FMLA leave.
As with the eligibility notice, DOL has increased the time in which you must notify an employee you have designated leave as FMLA leave to five days. This five-day period runs from the time you receive enough information—from either the employee or a health care provider—to allow you to make the designation determination, which, in some cases, will run concurrently with the five-day period in which the eligibility determination must be made.
If the amount of leave is known, the designation notice must state how much will be counted against the employee's FMLA leave entitlement. If the amount of leave is unknown at the designation stage (e.g., where unforeseen intermittent leave is needed), you must, upon the employee's request (but no more often than every 30 days), inform the employee how much leave has been counted against his or her FMLA entitlement.
If you will require the employee to furnish a fitness-for-duty certification upon return to work, the designation notice must state that fact. If you require the fitness-for-duty evaluation to address the employee's ability to perform essential job functions, you must include a list of those essential functions with the designation notice. DOL has established an optional prototype designation notice incorporating these updated requirements.
Importantly, the new regulations clarify an inadvertent failure to designate notice no longer will require you to provide additional leave beyond the statutory 12-week entitlement. This revision directly addresses the Supreme Court's 2002 decision in Ragsdale v. Wolverine World Wide Inc.
In that case, the court invalidated the penalty provision of a regulation that prevented an employer from counting leave against an employee's 12-week FMLA entitlement if the employer failed to properly designate the leave as FMLA leave. The penalty would have required an employer to provide an additional 12 weeks of FMLA-protected leave after the 30 weeks of leave the employee already had taken. The court found such a result was inconsistent with the maximum statutory requirement of 12 weeks of protected leave and at odds with the remedial requirement that an employee must suffer individualized harm to impose liability on the employer.
In light of these considerations, the new regulations exclude the punitive language confirming an employee's FMLA entitlement is capped at 12 weeks. Rather, if you fail to give proper notice designating leave as FMLA-qualifying as required under the regulations and an employee can show harm as a result, you may be held liable for that harm, such as lost compensation and benefits; other monetary losses; and other equitable relief, including employment, reinstatement and promotion.
General notices
The regulations still require employers to provide employees with general notice of their FMLA rights through a posting maintained in the workplace. The updated regulations allow employers, if they wish, to meet the general notice requirement by maintaining an electronic posting of the general notice in lieu of a physical poster. However, if your employees work in areas where they do not have ready access to computers, you must post a physical notice. Likewise, because the general notice must be accessible to job applicants, as well, a general notice must be posted in areas accessible to job applicants.
The new regulations also make clear that all covered employers—even those with no eligible employees—must post the general notice.
You also must place a general notice of FMLA rights in your employee handbook or distribute similar written materials to employees concerning benefits and leave. If you do not maintain a handbook or similar materials, you must provide the general notice to all employees upon hire. Regardless of the format, the posted and distributed notices should be identical.
DOL has created a new prototype general notice that incorporates the changes made in the updated regulations, including the provisions for military personnel and their families. Similar to the other DOL prototype notices, you are not required to use them as long as the notices you use contain at least as much information.
Medical certification
The updated regulations seek to alleviate employer and employee concerns about FMLA's medical certification process. Most notably, within five days (instead of two days) of receiving notice of the need for leave, you may require an employee to submit a complete medical certification from a health care provider to determine whether such leave is FMLA-qualifying.
You can request such medical certification be submitted within 15 days but must be prepared to extend the deadline if an employee shows an inability to meet it despite "diligent, good-faith" efforts. If the submitted certification contains insufficient, vague, ambiguous or otherwise nonresponsive information, you may request, in writing, that the employee cure specific, noted deficiencies within seven days, but, again, be ready to extend the deadline if the employee cannot comply with it despite "diligent, good faith" efforts to do so.
The updated rules explain it is the employee's responsibility to provide complete, sufficient certification or authorize his or her health care provider to release complete, sufficient certification to support the request for FMLA leave. Although this change permits you to communicate directly with health care providers—as long as the requirements of medical privacy regulations are met, including that such contact is not made through the employee's direct supervisor—you still are not permitted to ask for any information beyond that required by the certification form.
The new DOL medical certification form (WH-380-E) issued with the updated regulations allows health care providers to disclose, at their discretion, "other relevant facts" about an employee's health condition, including such information as symptoms, diagnosis or any regimen of continuing treatment. The new form also enables employers to request other detailed information, such as the date the condition started and its anticipated duration, dates and anticipated frequency of treatment, whether any medication was prescribed, whether the condition is pregnancy, the amount and type of leave needed (continuous or intermittent), and an explanation regarding when the condition is expected to cause periodic flare-ups that could necessitate intermittent absences from work.
In another notable departure from the old regulations, the new regulations enable employers to list an employee's essential job functions on the medical certification form and/or attach a job description. Using this information, a health care provider can specify which job functions an employee cannot perform because of the condition and, later, verify whether the employee can perform the position's essential functions upon return to work.
In its essence, the submitted medical certification form must establish the employee's inability to perform job functions and indicate the inability's likely duration. An employee's failure to procure a complete, sufficient certification is treated as a failure to provide certification altogether, resulting in possible denial of FMLA leave.
Defining leave
Serious health condition
The updated regulations also reflect numerous challenges to the definition of "serious health condition." The six definitions of "serious health condition" scattered throughout the old regulations and the objective test for continuing treatment were criticized for being unnecessarily vague and confusing and also for the perceived lack of seriousness inherent in certain conditions the definition covers. Indeed, DOL admitted in explaining the revised regulation that it, too, struggled with the terms used to define "serious health condition."
As a result of the ambiguities, the public urged DOL to:
These suggestions stemmed directly from employers' frustration with what they identified as the "weekend FMLA problem" (their inability to know or verify that employees who call in sick on Friday or Monday claiming an FMLA absence are entitled to FMLA leave).
Indeed, DOL noted no issue received more substantive commentary than employee use of unscheduled intermittent leave, which typically is based on recurring minor health conditions, giving employees opportunities to misuse FMLA leave to take vacations or long weekends when they otherwise would not be able to do so.
Nevertheless, DOL rejected these suggestions to redefine "serious health condition," explaining it could not identify a better alternative to the current definition, particularly considering medical conditions that are benign to some may be truly incapacitating to others.
However, it implemented a new structure for the definition designed to clarify the definition and provide employers and medical practitioners better guidance to determine whether a health condition qualifies for FMLA coverage.
Similar to the definitions set forth in the old regulations, the new regulations define a "serious health condition" as "an illness, injury, impairment or physical or mental condition that involves inpatient care or continuing treatment by a health care provider," which is further defined as:
For ease and clarification, the various definitions now are grouped together and set forth in a separate regulation.
However, without significant substantive changes to the definitions, DOL fails to adequately address the problems associated with FMLA abuse by employees suffering from relatively minor conditions.
But DOL did make some changes. It added the qualifier "full" to the definition of "continuing treatment," which now requires one to suffer from a "period of incapacity of more than three consecutive full calendar days," in an effort to discount partial days. The updated regulations also clarify this definition requires at least two visits to a health care provider within 30 days of the beginning of the period of incapacity (unless extenuating circumstances exist) as opposed to the old regulation's open-ended time frame.
Therefore, if an employee visits a physician and is told not to report to work for more than three days because of a health condition but is not prescribed any medication, whether the condition is considered a "serious health condition" under FMLA will depend on whether the health care provider determines additional follow-up treatment is needed within 30 days of the beginning of the initial period of incapacity.
Accordingly, if an employee does not need a follow-up appointment for two months, for example, the condition is not considered a serious health condition. On the other hand, if the physician schedules a follow-up appointment two weeks after the initial visit, the condition is considered a serious health condition.
The updated regulations also specify the first visit to a health care provider or the only visit must occur within seven days of incapacity.
According to the old regulations, an employee could suffer three days of incapacity then visit his doctor months later and still be deemed to be suffering from a serious health condition. By implementing the seven-day and 30-day time limits, the updated regulations provide employers with more certainty as to whether an individual qualifies for FMLA leave. At the same time, they prevent employers from making quick judgments that deny FMLA leave when employees otherwise qualify.
Intermittent leave
Intermittent or reduced schedule leaves may be taken in increments as small as an employer's payroll system will capture. DOL clarifies employers may account for leave using an increment no greater than the shortest time period an employer uses to account for use of other forms of leave, such as sick leave and vacation, provided it is not greater than one hour.
DOL recognized the enormous burden imposed on employers by having to allow employees to take FMLA leave in increments as small as a payroll system will capture, particularly when leave is unscheduled and an employee only needs to leave for a few hours during the middle of a shift when his or her work is not conducive to such absences.
For instance, a machine operator could use intermittent FMLA leave to miss 15 minutes in the middle of a heavy production run to which he was assigned, causing his employer to cease production—or at least temporarily suspend it—to call in a replacement worker. The machine operator could then return to production, which leaves the employer with the dilemma of what to do with the surplus of workers.
The problem is exacerbated when the machine operator consistently leaves at times when work is heaviest, allowing him to avoid the most difficult work. DOL attempted to address such situations, in part, by requiring in the updated regulations that employees taking intermittent leave because of medical necessity now make a "reasonable effort" (as opposed to a mere "attempt") to schedule leave so as not to unduly disrupt operations though "reasonable effort" is not defined.
DOL carves out an exception to this smallest unit rule for physical impossibilities. Under the new regulations, employers now may require intermittent or reduced schedule FMLA leave in larger increments for a "physical impossibility," which means an employee is physically unable to access (or depart from) a work site after the start (or before the end) of a shift.
Examples include a flight attendant or railroad conductor scheduled to be aboard an airplane or train or a laboratory employee who is unable to enter or leave a sealed "clean room" during a certain time period. Now, if there is a physical impossibility, the entire absence is considered protected FMLA leave.
Employee eligibility
The updated regulations clarify under what circumstances an employee's service must count toward the eligibility requirement that the employee must have worked 12 months to qualify for FMLA leave. Under the old regulations, the 12 months of service did not have to be consecutive, but there were no time restrictions requiring employers to consider prior service within a certain period of time. Employee groups argued all prior service should be considered, and employer groups urged DOL to implement a temporal limit.
The updated regulations provide that employment periods preceding a break in service of more than seven years need not be counted. However, such time would be counted if the break is the result of National Guard or reserve military service obligation or the parties agree in writing that the employee would be rehired following a break in service. But because FMLA requires covered employers to maintain records for only three years, it will be incumbent on employees to prove prior employment if an employee relies on a period of employment that predates the employer's records.
Notwithstanding this burden on employees, it may be prudent for you to retain separate records documenting the dates of employment for former employees to track their FMLA eligibility in the event they are rehired.
The updated rules also address confusion about whether leave time could count toward fulfilling the requirement of 12 months of service.
The updated regulations explain that though leave time counts toward the service requirement, employee eligibility must be determined on the date leave commences. This means, for instance, that if an employee has fulfilled the 1,250 hours requirement but has only worked 11 consecutive months when she goes on leave for the birth and bonding of a newborn, the first month of leave is non-FMLA leave. But one month later, she meets the 12-month eligibility requirement, and, thereafter, she is entitled to 12 weeks of FMLA-protected leave.
Pay and benefits
Substitution of paid leave
The former regulations allowed employers to require employees to comply with company policies for requesting and taking paid sick and medical leave when an employee wished to substitute such paid leave for FMLA leave. However, DOL interpreted the former regulations as requiring employers to allow employees, upon request, to use paid vacation and personal leave (as opposed to paid sick or medical leave) as substitution for unpaid FMLA leave even if an employee had not complied with his or her employer's rules for requesting and taking such leave.
The updated regulations clarify that when substituting any type of paid leave for FMLA leave, an employee is entitled to the paid leave only if he or she qualifies for the leave under his or her employer's paid leave policy and adheres to that policy.
However, if an employee receives paid disability leave concurrently with FMLA leave, you may not require the employee to also use other types of paid leave, such as vacation. You and the employee may agree to use such additional paid leave time to the extent necessary to supplement any shortfall between the disability payments and employee's typical earnings.
Consistent with the former regulations, the updated rules state you may only require an employee to substitute paid leave for FMLA leave if the employee has accrued and is eligible for the paid leave at the time FMLA leave is taken.
The new regulations further clarify that employers do not have to relax their medical certification standards for employees substituting paid leave. Instead, employers can require such employees to submit a complete medical certification.
Finally, the new regulations also remove language in the old regulations that prohibited you from requiring an employee to comply with FMLA procedural requirements for requesting and qualifying for leave if you have less stringent procedural requirements for taking paid leave. DOL determined the old regulation conflicted with FMLA and that all employees seeking FMLA leave may be required by employers to fulfill FMLA requirements even if an employer has less stringent requirements for requesting other paid leave.
Failure to pay premiums
You may allow an employee's health insurance to lapse during FMLA leave (after a grace period and notifying the employee) if an employee fails to pay the employee portion of health insurance premiums while on FMLA leave. But the updated regulations make clear that if you allow such coverage to lapse, you still have a duty to reinstate the coverage upon the employee's reinstatement and can be liable to the employee for any damage suffered by a failure to reinstate the coverage.
DOL stressed that employers should consider keeping an employee's health coverage current and attempting to recoup any unpaid premiums in other ways, such as payroll deductions, if allowed.
Although employers and employees are free to enter into agreements that state an employee will be responsible for repaying any unpaid premiums, many state wage laws prohibit employers from actually deducting such costs directly from an employee's wages unless consent is given at the time of the deduction, making it difficult for employers to recoup such costs short of going to court to enforce the agreement.
You will need to carefully document all communications with employees concerning health insurance coverage during FMLA leave and be certain your FMLA policies and notices clearly spell out employees' payment obligations during that time.
Perfect attendance bonuses
DOL changed the treatment of perfect attendance awards and other bonuses and incentives related to attainment of certain goals to allow employers to deny such bonus awards to employees who have not reached those goals because of FMLA leave as long as employees taking non-FMLA leave are treated identically.
This addresses the unfairness perceived by employees and employers alike as a result of the old regulations' mandate that employees who are absent for FMLA leave remain eligible for perfect attendance and other nonproduction-related bonuses.
Therefore, under the new regulation, if you maintain a policy denying perfect attendance bonuses to any employee who—but for some form of approved leave under your policy—would have had perfect attendance, you may deny the bonus to similarly situated employees on FMLA leave.
Other noteworthy changes
The new regulations require employees to comply with their employers' absence-reporting policies and procedures as long as these do not require notice to be given sooner than the DOL regulations require and except in "unusual circumstances."
For example, if an employer's policy requires employees to call a certain number to report an absence but the day an employee needing leave calls no one picks up and/or the voice mailbox is full, that employee must be given an opportunity to report his or her absence either at a later time or using other means. The rule further clarifies that any unprotected leave taken before FMLA leave is granted cannot be counted against FMLA leave.
The new regulations include some additional employer-favored changes.
For one, the regulations clarify that simply calling in "sick" will not suffice to provide adequate notice of a need to take FMLA leave. In addition, they eliminate the previous language that employees could take up to two days from an absence to notify the employer of the need for FMLA leave. If quicker notice is possible, it should be provided. Finally, the new regulations distinguish between employees who require FMLA leave for the first time and employees who were granted FMLA leave in the past. The first-timers need not ask for FMLA leave by name but should provide notice sufficient to make you understand the need for FMLA leave and its anticipated timing and duration. But employees who have taken FMLA leave in the past must either specifically reference the qualifying reason for the leave or specifically ask for FMLA leave.
Under the updated rules, failure or delay in compliance will lead to discipline under regular disciplinary procedures and a proportional delay of FMLA coverage. For example, an employee who provided a 15-day notice of foreseeable leave instead of the DOL-required 30-day notice can be penalized with a proportional 15-day delay of FMLA leave. Notably, the employer can apply regular attendance and/or disciplinary policies and procedures to the employee during the 15-day interim period.
In addition, whether an adult child has a disability for purposes of FMLA coverage should be determined at the time leave is to commence and cannot be based on facts and circumstances that occur after the leave commences.
An employee who needs to care for a qualifying family member need not be the only individual or family member available to care for the family member.
Holidays are another issue the updated changes address. When a holiday occurs during an FMLA leave and the employee would not be required to be at work because of the holiday:
For example, say an employee has a work schedule of Monday through Friday and Friday is a holiday on which the employee would not typically be required to report to work. If the employee needs FMLA leave only for Wednesday through Friday, the employee would use only two days of FMLA leave.
The updated regulations also clarify that employees may waive (through settlement or separation agreements) their claims to previous FMLA violations (but not prospective violations) without DOL or court supervision of such waivers. This change is in response to federal court rulings interpreting the current regulations to prohibit any waiver—either retrospective or prospective—of FMLA rights without court or DOL supervision.
The updated regulations seek to clarify that if an employee voluntarily accepts light-duty work instead of taking FMLA leave, the time spent on the light-duty assignment does not count against FMLA leave entitlement nor does it affect the employee's right to job restoration under FMLA. This rule addresses conflicting court cases, some of which have held that an employee's time spent on light-duty work may be counted as reducing his or her available FMLA time.
Former regulations allowed employers to require a fitness-for-duty certification before an employee returned to work following FMLA leave as long as the employer maintained a uniformly enforced policy requiring such certifications for all other similarly situated employees. The updated regulations make two changes to the process:
Update your policy
DOL has implemented many other changes not mentioned here, all of which undoubtedly affect employers' current FMLA policies and the manner in which they are interpreted and enforced.
If you are covered by FMLA, we suggest you immediately modify your FMLA policy to address the many changes to the new service member family leave entitlements for military families and to reflect the revised regulations, all of which are now in effect.
Jason C. Kim is a partner in the employment law group of the Chicago-based law firm Neal, Gerber & Eisenberg LLP. Nineveh Alkhas is an associate attorney at the same firm.
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