FMLA Qualifying Leave Must Be Under the FMLA

Employers cannot permit employees to use PTO or other paid leave prior to using unpaid FMLA leave for an FMLA qualifying condition, according to a new Department of Labor Opinion Letter. The Opinion Letter also provides that employers cannot designate more than 12 weeks of leave per year as FMLA (or 26 weeks per year if leave qualifies as FMLA military caregiver leave). 

FMLA-Qualifying Leave Must Run Concurrently With Paid Leave Policies

Under the FMLA, covered employers must provide eligible employees up to 12 weeks of unpaid, job and benefit-protected leave per year for qualifying medical or family reasons (or up to 26 weeks per year for qualifying military caregiver leave). The Opinion Letter addresses the situation where an employee anticipates a leave of absence for an FMLA-qualifying reason and the employee wants to take off more than the 12 weeks allotted under the FMLA by using other available paid leave policies (such as vacation, sick pay, PTO, etc.) at their disposal. Under this scenario, the employee notifies the employer that he or she plans to exhaust an available paid leave policy first for an FMLA-qualifying reason, and then after that time has run out, he or she desires to take the 12 weeks of FMLA leave.
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New FMLA Forms Released

Effective August 31, 2018, the Department of Labor released new FMLA forms to replace the expired forms. The new forms renewed without changes. Employers are advised to begin using the most current form available that have an expiration date of August 31, 2021.

The links to download copies of each form direct from the Department of Labor are below:

• WH-380-E Certification of Health Care Provider for Employee’s Serious Health Condition
• WH-380-F Certification of Health Care Provider for Family Member’s Serious Health Condition
• WH-381 Notice of Eligibility and Rights & Responsibilities 
• WH-382 Designation Notice
• WH-384 Certification of Qualifying Exigency For Military Family Leave
• WH-385 Certification for Serious Injury or Illness of Covered Servicemember — for Military Family Leave
• WH-385-V Certification for Serious Injury or Illness of a Veteran for Military Caregiver Leave 

Can You Be Held Personally Liable In An Employment Lawsuit?

In “Alice in Wonderland,” the Queen of Hearts once proclaimed, “Why, sometimes I’ve believed as many as six impossible things before breakfast.” This appears to be the rallying cry of many plaintiffs across the country when they file administrative charges and lawsuits. They continue to name individual supervisors and human resources directors as individual defendants despite case law that generally holds individuals cannot be found liable under some of the most common federal employment discrimination laws: Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), and the Age Discrimination in Employment Act (ADEA).

Unfortunately, the clear language in case law supporting the dismissal of individuals has not prevented plaintiffs from bringing claims under these statutes. A federal court judge in Oregon recently outlined this costly and questionable practice in his dismissal opinion in a case involving Starbucks, stating:

[Plaintiff’s] attorneys regularly file suit in state court for violations of these [discrimination] statutes against individual employees, knowing that they likely will be defended and indemnified by the employer, for the ostensible purpose of educating and deterring them from unlawful behavior. This court fails to see any need to file a lawsuit to deter such unlawful behavior. Even if employees are not sued individually, their employer surely will take appropriate action to deter any future behavior. [Plaintiff’s] attorneys also admitted that as a matter of course they sue employees prior to engaging in discovery and obtaining any evidence as to how complicit the employees may have been in the alleged discrimination or retaliation. Instead, they appear to presume that any employee who questions the plaintiff’s work performance should be sued.

Being named in a lawsuit puts individuals in a terrible position of having to personally defend themselves. Even if they are able to eventually get dismissed from the complaint, they do not come out unscathed—they often get stuck paying defense costs and are usually subjected to the invasive discovery process.

This shotgun approach to employment litigation establishes that plaintiff take the Cheshire Cat’s words to heart, in pursuit of money: “If you don’t know where you are going, any road can take you there.”

Federal And State Laws That Permit Individual Liability

The frightening aspect of this trend is that those roads do sometimes lead plaintiffs to a place where they can recover from supervisors, managers, and HR directors. At the state level, New Jersey, New York, Massachusetts, Connecticut, Ohio, Oregon, Pennsylvania, and Washington are among the states that allow plaintiffs to bring claims against individuals under the theory that they “aided and abetted” discrimination or harassment. And California allows plaintiffs to bring claims against individuals for harassment. Likewise, many states allow plaintiffs to bring claims against individuals who “retaliate” against them for engaging in protected activity. These types of laws will continue to sweep across the country as the states that have enacted them are generally at the forefront of employee rights.

At the federal level, individuals are regularly found personally liable for violations of the Fair Labor Standards Act (FLSA), the Family Medical Leave Act (FMLA), Section 1981 of the Civil Rights Act, the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Employee Retirement Income Security Act (ERISA), and the Immigration Reform and Control Act (IRCA).

For instance, a 2017 case out of the Eastern District of Pennsylvania recently held that an HR director may be individually liable for FMLA and wage violations. In Edelman v. Source Healthcare Analytics, LLC, the court determined that there is individual liability under the statute because it defines an “employer” to include “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer.” The court next found the HR director acted in the interest of the employer when she terminated plaintiff.

The court reasoned that the HR director is subject to personal liability under the FMLA because she exerted control over plaintiff’s specific leave and because she terminated her. Using this same reasoning, it appears that the court would have likely reached this same conclusion if it was a manager, or perhaps even a general counsel, who advised the plaintiff of her FMLA rights and subsequently terminated the plaintiff’s employment.

An even more recent case out of the Eastern District of Pennsylvania denied a defendant’s request to have a race discrimination claim against the individual supervisor dismissed. In a 2018 case against a trucking company, the plaintiff made four different attempts to sue a former supervisor. The fourth time was the charm, as the court recently concluded that the plaintiff pled the bare minimum for his race discrimination claim to survive against the supervisor under § 1981.

Interestingly, the only allegation relating to possible race-based discrimination was plaintiff’s allegation that the supervisor ordered him “to go home early” and “leave work until his next scheduled shift.” The supervisor allegedly made this demand upon learning about plaintiff’s report to another employee of disparate treatment between Caucasian and African-American employees.

This case should serve as a cautionary tale to all HR directors, managers, and supervisors as there were no other allegations of race-based discrimination against the individual supervisor. In fact, there were no allegations that the supervisor had any involvement in the decision to terminate the plaintiff. Further, there were no allegations that the supervisor played a role in the union’s investigation and hearing. The court simply concluded the supervisor’s decision to send the plaintiff home was enough to survive a motion to dismiss.

Takeaways

Managers, HR directors, and supervisors should heed the Queen of Hearts’ recommendations when considering what steps to take to protect themselves and their company: “It takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”

To better protect yourself and the company, you should ensure your employee handbook accurately reflects the ever-changing laws related to protected classes and all forms of harassment. Second, you should schedule annual harassment and discrimination trainings with managers and non-managers. These trainings will act as a defense in the event of a discrimination or harassment lawsuit. Also, the trainings will put employees on notice that they may be personally liable for violations of both state and federal employment statutes.

Finally, there must be an emphasis, from the top down, to take responsibility for the company’s workplace culture. Remaining complacent exposes both companies and individuals to a disgruntled employee exclaiming “off with their heads!”

Article Courtesy of Fisher & Phillips

IRS Releases FAQs on Paid FMLA Credit

The IRS released its first piece of guidance on the newly added credit for paid family and medical leave in the form of FAQs. The FAQs provide helpful information as employers work to either implement conforming paid leave policies or ensure that their current policies are sufficient. However, the IRS acknowledged that additional guidance is needed.

Background

As part of the Tax Cuts and Jobs Act enacted and signed into law in late 2017, Congress added section 45S to the Internal Revenue Code. This section allows employers to claim a general business credit for providing paid family and medical leave to certain employees. In order to be eligible for the credit, the employer must have a written policy that allows no less than two weeks of paid family and medical leave annually. This amount is prorated for part-time employees. The written policy also must provide for payment of not less than 50 percent of the amount normally paid. Although section 45S references the Family and Medical Leave Act of 1993 (FMLA), the leave does not have to be provided under the FMLA provisions. Instead, it can simply be allowed under the employer’s policy. If, however, the employer is not covered by the FMLA, the employer’s written policy must include a non-retaliation clause.

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Current FMLA Forms Now Expire June 30th

The Family and Medical Leave Act (FMLA) forms expire June 30—not on their original expiration date of May 31—but experts believe they aren’t likely to change when they’re replaced with new forms.

Employers who customize their own forms aren’t too concerned with the imminent replacement of the current forms, but employment law attorneys disagree on how much the DOL forms might be tweaked.

The FMLA forms are used to certify that an employee is eligible to take FMLA leave and to notify him or her of leave rights under the law. The forms expire under the Paperwork Reduction Act of 1995, which requires the Department of Labor (DOL) to submit its forms at least every three years to the Office of Management and Budget (OMB) for approval, so the OMB can ensure processes aren’t too bureaucratic.

The DOL is renewing the current FMLA forms on a month-to-month basis until it replaces them with new forms. But the new forms may be virtually identical to the current ones with just a different expiration date.

In 2015, the DOL made a few minor tweaks to the FMLA forms so they would conform with the Genetic Information Nondiscrimination Act.

There have not been substantive changes to FMLA or its regulations in the past three years that would require changing any of the information provided or sought on the current forms, noted Tina Bengs, an attorney with Ogletree Deakins. So it is likely that the new forms, once issued, will be approved for the maximum three-year period.

Customization of Forms

Some employers customize the DOL-recommended forms for their own use, observed Steven Bernstein, an attorney with Fisher Phillips. For example, some employers are covered by state and federal FMLAs and adjust the federal forms to reflect state law requirements. Others make minor changes, such as referring to workers as “associates” rather than “employees.”

On occasion, employers incorporate reference to their accrued leave policies, while others adopt robust language disclaiming liability under the FMLA, he said.

He cautioned, however, that an employer can be held liable for using a form that harms the employee by misleading him or her about FMLA rights, and recommended that any changes be reviewed by an outside expert to ensure that added language does not inadvertently conflict with the FMLA.

Monica Velazquez, an attorney with Clark Hill, prefers customized forms so that employers aren’t handing workers documents with the DOL logo. The logo makes the forms look more official than they are, she said, and emphasizes that their use is optional.

It is recommended if you are going to create customized FMLA forms to copy and paste the information from the DOL form into the employer’s own form. If the employer plans to use its own language, use plain English and bullet points, she said. Keep things as direct as possible.

For example, instead of an open-ended question about the employee’s treatment schedule, a customized FMLA form might ask the doctor to choose a frequency of treatment—every week, month or year—and circle the response. This would reduce the challenge of reading doctors’ often illegible handwriting. Less space for handwritten information also would reduce the chances of doctors’ filling certification forms with confusing medical lingo.

Many employers put the information about health conditions at the top of the medical certification forms, as it’s the first piece of information the employer wants—what ails the employee or family member—so the employer has a better sense of whether the employee is covered by the FMLA.

FMLA Forms

The current DOL forms are:

• Certification of Health Care Provider for Employee’s Serious Health Condition(Form WH-380-E).
• Certification of Health Care Provider for Family Member’s Serious Health Condition(Form WH-380-F).
• Notice of Eligibility and Rights & Responsibilities(Form WH-381).
• Designation Notice(Form WH-382).
• Certification of Qualifying Exigency for Military Family Leave(Form WH-384).
• Certification for Serious Injury or Illness of Current Servicemember—for Military Family Leave(Form WH-385).
• Certification for Serious Injury or Illness of a Veteran for Military Caregiver Leave(Form WH-385-V).

IRS Issues Guidance FAQs Regarding the Family Leave Federal Tax Credit

Last week, the Internal Revenue Service (IRS) issued FAQ guidance regarding the employer tax credit for paid family and medical leave. As a reminder, the Tax Cuts and Jobs Act of 2017 (the Act) provides a tax credit to employers that voluntarily offer paid family and/or medical leave to employees. The FAQs clarify some of the requirements in Section 45S of the Act that an employer’s paid family and/or medical leave policy must include. The FAQs also clarify other details, such as the basis for the credit and the tax credit’s impact on an employer’s deduction for wages paid to an employee who is on a qualifying leave.

For information on how to determine if your company can take advantage of the paid family and medical leave tax credit, read this earlier article from Jackson Lewis on this topic. You can also estimate your company’s potential annual tax savings using the Jackson Lewis Paid Family Leave Tax Credit Calculator.

5 Employee Handbook Updates to Watch in 2018

When was the last time the company handbook was reviewed? It’s a worthy priority for the new year—or anytime, really. Handbooks are living documents that should be reviewed regularly, especially considering the federal government’s focus on deregulation and ever-changing updates from state legislatures and municipalities. Here are five key issues that may trigger updates:

1. Workplace conduct and social media

Under former President Barack Obama, the National Labor Relations Board (NLRB) scrutinized social media policies and other workplace conduct standards that may limit workers’ rights. For example, in many cases the board considered employee social media posts that are critical of employers a form of protected concerted activity and thus not necessarily grounds for disciplinary action. 

With the Trump administration, the pendulum may swing the opposite way, giving employers more leeway to develop workplace conduct rules, said Bruce Sarchet, an attorney with Littler in Sacramento.

Already, the board overruled its previous standard that struck down policies if they could be “reasonably construed” to curb employee discussions about wages and working conditions—even if the policies weren’t intended to do so. “With [the] signal of a sea change in NLRB policy, employers need to pay close attention to the board’s new ‘policies on policies’ as they develop,” said Bonnie Martin, an attorney with Ogletree Deakins in Indianapolis. In the meantime, make sure your handbook’s conduct guidelines are specific and clear. 

2. Sexual harassment 

New Tax Law Provides Employer Tax Credit for Compensation Paid to Employees While on Family and Medical Leave

The new federal tax law, signed by President Trump in December, contains a number of provisions that will impact the workplace and employers. One specific change has to do with the Family and Medical Leave Act (FMLA). As many are aware, FMLA requires employers to provide certain employees with up to 12 weeks of job-protected leave annually for specified family and medical reasons. The leave may be paid or unpaid.

To encourage employers to provide eligible employees with paid leave under FMLA, the new tax law provides eligible employers with a new business credit equal to 12.5% of the amount of wages paid to “qualifying employees” during any period in which such employees are on family and medical leave as long as the rate of payment under the program is at least 50% of the employee’s normal wages. The credit increases from 12.5% by 0.25 percentage points (but not above 25% of wages) for each percentage point by which the rate of payment exceeds 50%. The credit can be used to lower an employer’s taxable income, subject to limitations, and applicable alternative minimum tax. The amount of paid family and medical leave used to determine the tax credit for an employee may not exceed 12 weeks.

To be eligible for the credit, an employer must have a written policy that provides all qualifying full-time employees with at least two weeks of annual paid family and medical leave. Part-time employees are also to be allowed a commensurate amount of leave on a pro rata basis. Qualifying employees are those who have worked for the company for at least one year and were paid no more than 60% of the compensation threshold for highly compensated employees in the previous year. (For 2018, 60% of the compensation threshold is equal to 60% x $120,000 = $72,000.)

For purposes of the credit, any leave paid for by a State or local government or required by State or local law shall not be taken into account in determining the amount of paid family and medical leave provided by the employer. For example, if a jurisdiction, such as Chicago has an ordinance that provides paid sick leave for FMLA-permitted purposes, an employer will not qualify for the business tax credit if the paid leave is provided to be in compliance with the ordinance. As a result, it is important that the employer have a clear policy in place. 

The Secretary of Treasury will determine whether an employer or an employee satisfies applicable requirements for the employer to be eligible for the tax credit based on information provided by the employer as the Secretary determines to be necessary or appropriate.

If the employee takes a paid leave for other reasons, such as vacation leave, personal leave, or other medical or sick leave, this paid leave will not be considered to be family and medical leave for purposes of the credit.  

The credit is effective for wages paid in taxable years starting on January 1, 2018. It is set to expire for wages paid in taxable years beginning after December 31, 2019. 

DOL Issues New FMLA Poster and Publishes Guide to Help Employers Administer FMLA

In late April, the Department of Labor (DOL) announced that it soon will issue a new general FMLA Notice that can be used interchangeably with their current FMLA posting.  In issuing this new directive, they also unveiled a new guide to help employers navigate and administer the FMLA.

Here’s the scoop:

New DOL Poster

Under the FMLA, an FMLA-covered employer must post a copy of the General FMLA Notice in each location where it has any employees (even if there are no FMLA-eligible employees at that location). According to the FMLA rules, the notice must be posted “prominently where it can be readily seen by employees and applicants for employment.”

The DOL has announced that it will release a new General FMLA Notice for employers to post in their workplaces.  According to the DOL, the new poster won’t necessarily include a whole bunch of new information.  Rather, the information in the notice will be reorganized so that it’s more reader friendly.

The DOL’s Branch Chief for FMLA, Helen Applewhaite, confirmed that employers would be allowed to post either the current poster or the new version.  In other words, employers will not be required to change the current poster. 

New Employer FMLA Guide

In 2012, the DOL issued a guide to employees to help them navigate their rights under the FMLA. Several years later, DOL now has issued a companion guide for employers.  According to the DOL, the Employer’s Guide to the Family and Medical Leave Act (pdf) is designed to “provide essential information about the FMLA, including information about employers’ obligations under the law and the options available to employers in administering leave under the FMLA.”

The new guide was unveiled by the DOL at an annual FMLA/ADA Compliance conference sponsored by the Disability Management Employer Coalition (DMEC). Generally speaking, the new guide covers FMLA administration from beginning to end, and it follows a typical leave process — from leave request through medical certification and return to work.

While the guide helps explain the FMLA regulations in a user-friendly manner, the guide primarily is meant to answer common questions about the FMLA, so it leaves unanswered leave issues that continue to frustrate employers in their administration of the FMLA.  However, the guide is likely to have some benefit to employers when administering the FMLA.  For instance, the guide:

1. Follows the FMLA regulations and the course of a typical leave request in a relative orderly manner.
2. Contains easy to follow flowcharts so that employers can better understand the typical FMLA process, including a “Road Map to the FMLA” that provides an overview of the FMLA process.  
3. Includes “Did You Know?” sections to give employers a heads-up on some of the lesser-known provisions and nuances of the FMLA regulations.
4. Highlights user-friendly charts and explanation of the medical certification process, including what information is required in certifications.
5. Provides a helpful overview of military family leave, which often can be a bit overwhelming to employers attempting to navigate this portion of the FMLA.

Same Sex Marriage Rights Extended Nationwide

The Supreme Court left one of its most high-profile decisions for the end of its term, holding today by a 5-4 vote that the Constitution requires states to recognize same-sex marriage. As a result, state bans against same-sex marriage are no longer permissible and all states are required to recognize same-sex marriages that take place in other states. Employers should update their FMLA policies and benefit plans to provide the same coverage for same-sex married couples as for other married couples. Obergefell v. Hodges.

Background
In 2013, the U.S. Supreme Court ruled that Section 3 of the Federal Defense of Marriage Act (DOMA), which essentially barred same-sex married couples from being recognized as “spouses” for purposes of federal laws, violated the Fifth Amendment (United States v. Windsor). On the heels of that case, same-sex couples sued their relevant state agencies in Ohio, Michigan, Kentucky, and Tennessee to challenge the constitutionality of those states’ same-sex marriage bans, as well as their refusal to recognize legal same-sex marriages that occurred in other jurisdictions.

For instance, the named plaintiff, James Obergefell, married a man named John Arthur in Maryland. Arthur died a few months later in Ohio where the couple lived, but Obergefell did not appear on his death certificate as his “spouse” because Ohio does not recognize same-sex marriage.  Similarly, Army Reserve Sergeant First Class Ijpe DeKoe married Thomas Kostura in New York, which permits same-sex marriage.  When Sgt. DeKoe returned from Afghanistan, the couple moved to Tennessee, but that state refused to recognize their marriage. 

The plaintiffs in each case argued that the states’ refusal to recognize their same-sex marriages violated the Equal Protection Clause and Due Process Clause of the Fourteenth Amendment. In all the cases, the trial court found in favor of the plaintiffs. The U.S. Court of Appeals for the Sixth Circuit reversed and held that states’ bans on same-sex marriage and refusal to recognize marriages performed in other states did not violate Fourteenth Amendment rights to equal protection and due process.

The Supreme Court accepted review of the controversy, focusing its analysis on whether the Constitution requires all states to recognize same-sex marriage, and whether it requires a state which refuses to recognize same-sex marriage to nevertheless recognize same-sex marriages entered into in other states where such unions are permitted. 

Same-Sex Marriage Is Guaranteed By The Constitution
In its ruling today, the Supreme Court sided with the plaintiffs and held that marriage is a fundamental right; as such, same-sex couples cannot be deprived of that right pursuant to the Due Process and Equal Protection Clauses of the Fourteenth Amendment. 

Practical Impact On Employers: FMLA Policies and Benefit Documents Must Be Updated  
Following Windsor, the Department of Labor issued a Final Rule revising FMLA’s definition of “spouse” to ensure that same-sex married couples receive FMLA rights and protections without regard to where they reside. Specifically, the DOL’s Final Rule adopts a “place of celebration” rule, meaning that when defining a spouse under the FMLA, it refers “to the other person with whom an individual entered into marriage as defined or recognized under state law for purposes of marriage in the State in which the marriage was entered into or, in the case of a marriage entered into outside of any State, if the marriage is valid in the place where entered into and could have been entered into in at least one State.” In other words, this broad interpretation was intended to ensure that FMLA coverage existed for same-sex couples even in states where same-sex marriage was banned.

The Final Rule had been temporarily enjoined in Texas, Arkansas, Louisiana, and Nebraska by a federal judge who ruled that the DOL did not have the authority to change the definition of “spouse,” and that the change “improperly preempts state law forbidding the recognition of same-sex marriages for the purpose of state-given benefits.” That litigation was on hold pending the outcome of this case. The Supreme Court’s decision in Obergefell paves the way for the Final Rule to go into effect, which means that employers should update their FMLA policies accordingly.

Additionally, employers should review their benefit offerings and consider the impact this decision has on employees who are in same-sex marriages. 

Ironically, the Obergefell decision does not change the fact that sexual orientation is still not a protected class under federal law for employment law purposes. Although many states and municipalities protect against discrimination on the basis of sexual orientation, the proposed amendment to Title VII of the Civil Rights Act of 1964 remains in limbo.