Watch Out for These FMLA Compliance Pitfalls

Most employers are aware that the federal Family and Medical Leave Act (FMLA) requires covered employers to provide eligible employees with up to 12 weeks of job-protected leave (26 weeks for certain military purposes) within a 12-month period. The statute also requires employers to maintain the employee’s group health insurance during their leave and to reinstate the employee to the same or equivalent position following leave. However, employers may not be aware of the following five requirements they must follow to be in compliance with FMLA regulations and avoid claims of FMLA interference or retaliation.

No Undue Hardship Defense
There is no undue hardship defense if an eligible employee qualifies for FMLA leave. Unlike the Americans with Disabilities Act (ADA), which provides employers the defenses of undue hardship and direct threat to safety when an employee requests an accommodation, employees have a legal right to take FMLA leave if they are eligible and if the leave is for a purpose specified in the Act. It does not matter if the employee’s absence from work will place an undue burden on business operations or create a safety risk. FMLA leave is the employee’s legal right and if the leave is for a qualifying purpose, the leave must be granted.

Employers can be held liable for FMLA interference if they deny the leave or otherwise interfere with the employee while on leave. An employer can also be held liable for retaliation if it takes an adverse employment action against the employee because they took or requested FMLA leave.

Can FMLA Leave Be Deferred?
In most jurisdictions, employers cannot agree to defer FMLA leave. Employees occasionally need to take an FMLA-qualifying leave of absence but do not want it to count against their FMLA 12-week entitlement. For example, a pregnant employee may want to save her 12-week job-protected FMLA leave for after the birth of her child. However, in a 2019 Opinion Letter, the Department of Labor (DOL) Wage and Hour Division took the position that, “Once an eligible employee communicates a need to take leave for an FMLA-qualifying reason, neither the employee nor the employer may decline FMLA protection for that leave.”

The DOL position is in direct conflict with the Ninth Circuit Court of Appeals, which previously held that an employee can affirmatively decline to use FMLA leave, even if the underlying reason for seeking the leave would have invoked FMLA protection. (See Escriba v. Foster Poultry Farms, Inc.) Therefore, given the conflicting positions of the court and the DOL, employers in the Ninth Circuit, which includes California and Arizona, must carefully weigh the risks of allowing employees to defer FMLA leave.

However, because the DOL is the agency that enforces FMLA violations, employers outside the Ninth Circuit, like employers in Colorado, Wyoming, New Mexico, and Utah, are well advised to follow the position taken by the DOL in its 2019 Opinion Letter.

The Regular Workweek
FMLA is based on the employee’s regular workweek. When an employee takes leave in full-week blocks, it is easy to determine how many weeks of FMLA leave the employee is taking. However, when an employee takes FMLA leave in less than full-week increments, the computation is more complex. The percentage of a workweek taken must be based on the number of hours in the employee’s regular workweek. Employers sometimes assume that 12 weeks of FMLA leave equals 480 hours. However, unless an employee’s regular workweek is 40 hours, the 12 weeks of job-protected leave an employee is entitled to take will not equal 480 hours. For instance, if an employee’s regular workweek is 32 hours, they will only be entitled to take 384 hours of FMLA leave. Likewise, if an employee’s regular workweek is 50 hours, the employee will be entitled to take 600 hours of FMLA leave.

Properly calculating the percentage of a workweek that should count against an employee’s FMLA entitlement is particularly important when an employee takes intermittent leave. To determine the percentage of the workweek attributable to FMLA, the number of hours taken as leave should be divided by the number of hours in the employee’s regular workweek. So, if an employee takes five hours of leave and regularly works 40 hours each week, you divide five by 40, resulting in the employee having taken 12.5% of a workweek. If an employee takes the same five hours but their workweek is 32 hours, they have taken 15.6% of a workweek; and if an employee working a 50-hour workweek takes the same five hours of FMLA leave, they will have only taken 10% of a workweek. It is important for employers to properly calculate the percentage of a workweek taken in order to ensure that employees on intermittent leave receive their full 12-week entitlement.

Be Careful About Termination
Employees on FMLA leave should not automatically be terminated as soon as their FMLA leave expires. Even if you were planning to terminate an employee prior to their request to take FMLA leave, there are two important reasons why you should not terminate the employee as soon as their 12-week FMLA entitlement expires. First, in an advisory bulletin, the DOL has stated that an employee who is returned to their same or equivalent position for 30 days following FMLA leave is deemed to have returned to work and the employer has met its statutory obligation to reinstate the employee. Terminating the employee immediately upon the expiration of the 12-week entitlement period does not satisfy the employer’s obligation to return the employee to their same or equivalent position.

Second, an employee who qualifies for FMLA leave based on their own serious health condition may very well also meet the definition of having a disability under the ADA. In the 10th Circuit, under many circumstances, an extended leave of absence of up to six months would be deemed a reasonable accommodation; beyond six months, the employer has the undue hardship defense. Other jurisdictions may have established different timelines, but it is critical to understand whether the employee is entitled to additional leave as an ADA accommodation following the expiration of their 12-week FMLA entitlement. Therefore, a blanket policy of terminating employees who are unable to return to work following their 12-week FMLA leave can lead to claims under both the FMLA (failure to reinstate and retaliation) and ADA (failure to accommodate).

What About ‘Key Employees’?
There is one circumstance where an employer is not required to reinstate an employee to their same or equivalent position. FMLA regulations provide that “key employees” need not be returned to their same or equivalent position if doing so would cause “substantial and grievous economic injury to the operations of the employer.” A “key employee” is a salaried employee among the highest paid 10% of all employees working within 75 miles of the key employee’s worksite. A “substantial and grievous economic injury” is one that would threaten the economic viability of the organization or a lesser injury that has a long-term injurious effect.

An employer must advise the employee of their status as a key employee and the potential for their job restoration rights to be impacted at the time the employee requests FMLA leave. As soon as the employer makes a determination that restoration of the key employee would cause substantial and grievous economic injury, the employer must notify the key employee in writing. The key employee may then decide to return to work prior to the expiration of their FMLA leave, or they may elect to remain on FMLA leave with full health benefits.

At the end of the key employee’s FMLA leave, the employee may ask to be reinstated, and the employer must make a determination at that time if returning the employee to their former position would still create substantial and grievous economic injury. If it would not, the employee must be reinstated.

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