FMLA: Forgetting Minutiae Leads to (legal) Actions

This post was co-authored by Jennifer Fowler-Hermes and John Getty.

The Family and Medical Leave Act (or the FMLA) is often viewed as a convoluted maze of arcane rules. Generally, the FMLA requires covered employers provide qualifying employees up to 12 weeks of unpaid leave for certain qualifying events. This simple explanation belies how technical the FMLA can be. Because it is very technical, the FMLA is one of the laws that employers most frequently ask questions about. Taking one wrong turn can easily lead to employer liability. This post is the first in a series to help employers stay on the right path.

In this series, we will review not only the basics of the FMLA, but also several areas where employers often go astray. Our journey through the FMLA starts with a handy map summarizing the steps an employer should follow when dealing with the FMLA labyrinth.

Step 1:  An employer determines whether or not it is a covered employer.

Step 2:  If it is covered, an employer should then prepare and share an FMLA leave policy with its employees and must post certain notices to its employees.

Step 3: If an employee requests FMLA leave, or the employer learns that an employee’s absence may be for a qualifying reason, then a covered employer must determine whether the employee is eligible for FMLA leave. If the employee is not eligible, the employer must notify the employee of the decision and utilize the appropriate designation form. If the employee is eligible, the employer must proceed to the next step.

Step 4: Provide the employee eligibility and rights and responsibilities notices to the employee.

Step 5:  The employer must then determine if the leave request is for an FMLA-qualifying reason.

Step 6: The employer should determine whether the employee qualifies as a “key employee” for whom specialized rules apply. Key employees will be addressed in a separate post in this series.

Step 7: The employer may require the employee go through a certification process, which is optional.

  • If the certification process is utilized, then the employer should notify the employee about the certification and provide time for certification.

Step 8: The employer must either grant or deny the leave request and provide a designation notice to the employee.

Step 9: After leave is granted, then the employer must:

  • Restore the employee to the same or an equivalent position at the end of the leave (unless the employee is a “key” employee); and
  • Maintain benefits during the leave (with exemptions – which will be discussed later in the series).

Step 10: Maintain records for the entire decision-making process.

Because it’s part of the first step in navigating the FMLA maze, and it represents a core concept of the FMLA, below you will find a serious of questions and answers designed to assist in understanding the concept of the “covered employer.”

What is a covered employer? 

It’s an  employer that has legal obligations under the FMLA.

Who are covered employers?

There are a couple types of covered employers subject to the provisions of the FMLA. One of the main covered employers are private employers with 50 or more employees during 20 or more workweeks in the current or previous calendar year.

Public agencies, regardless of the number of employees the public agency employs (public agencies include state, local and federal employers, and local educational agencies), are also covered employers. In addition, public and private elementary and secondary schools are covered employers, regardless of the number of persons employed.

Finally, covered employers also include any person who acts in the interest of the employer toward any of the employees of such employer, and any successor in interest of the employer.

How does a private-employer count employees to determine coverage?

With few exemptions, any employee whose name appears on the employer’s payroll will be considered employed each working day of the calendar week and must be counted regardless of whether compensation is received for the week. However, employees added to the payroll after the beginning of a calendar week or terminated before the end of a calendar week are not counted.

There are special issues that arise when an employer does not by itself have the requisite number of employees but is considered a joint employer with a second company. For example, when two or more businesses exert control over the workplace or working conditions, it is possible that the employees of both businesses are counted together.

What about employees on paid or unpaid leave?

They are counted so long as the employer reasonably expects the employee to return later to active employment.

Does the same rule apply for employees on disciplinary suspensions?

Yes, again, so long as the employer reasonably expects the employee to return later to active employment, the employee is counted.

What about employees who are laid off?

Employees on temporary or permanent layoff are not counted.

The questions and answers above summarize the main issues with that crop up at Step 1.

*The next FMLA post in this series will skip ahead to Step 3 and address what makes someone an employee eligible for FMLA leave, since it is one of the other important concepts to understand while navigating the FMLA.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
(941) 552-2558

John Getty
jgetty@williamsparker.com
(941) 329-6622

Let’s Try this Again: Department of Labor Proposes Salary Increases for White-Collar Exemptions

Please note: This post has been updated to reflect a corrected annual minimum salary threshold of $35,308 which represents a nearly $12,000 per year increase from the current salary requirement of $23,660.

The U.S. Department of Labor issued a much-anticipated proposed rule addressing the “white-collar” exemptions for the Fair Labor Standards Act. If the proposed rule is enacted later this year, the new minimum salary threshold will be $35,308 per year (or $679 per week). This represents nearly a $12,000 per year increase from the current salary requirement of $23,660 (or $455 per week). Thus, once this new rule goes into effect, for an employee to be exempt from the FLSA’s minimum wage and overtime rules, the employee’s salary will need to meet the new threshold.

Importantly though, the DOL will not be altering any other aspects of the “white-collar” exemption tests. It won’t be changing the various tests for executives, administrative staff, or professionals. Nor does the DOL’s new rule include periodic automatic increases to the minimum salary threshold as the Obama-era DOL had proposed before a district court stopped it in 2016.

Depending on how quickly the DOL moves through the rule-making process and issues the new rule, the new minimum salary threshold will likely go into place late summer or early fall of this year. For that reason, as they did in 2016 in response to the prior proposed increases, employers will want to begin evaluating their staff to determine who may be affected and determine how they want to proceed.  Additionally, because of this rule change, employers will also want to audit all of their employees to make sure each one is properly classified, and if not, take this opportunity to reclassify employees in a manner that tries to minimize liability for any past misclassifications.

John Getty
jgetty@williamsparker.com
(941) 329-6622

Important Notice for Employers Required to Submit EEO-1 Report

The Equal Employment Opportunity Commission issued a notice this morning that, due to the recent partial lapse in appropriations, the deadline to submit EEO-1 data will be extended until May 31, 2019. The EEO-1 is an annual survey that requires certain employers to file the EEO-1 report. The EEO-1 Report, Standard Form 100, is a compliance survey that requires company employment data to be categorized by race/ethnicity. As set forth on the EEOC’s website, all companies that meet any of the following criteria are required to file the EEO-1 report annually:

  • The company is subject to Title VII of the Civil Rights Act of 1964, as amended, with 100 or more employees; or
  • The company is subject to Title VII of the Civil Rights Act of 1964, as amended, with fewer than 100 employees, if the company is owned by or corporately affiliated with another company and the entire enterprise employs a total of 100 or more employees; or
  • The company is a federal government prime contractor or first-tier subcontractor subject to Executive Order 11246, as amended, with 50 or more employees and a prime contract or first-tier subcontract amounting to $50,000 or more.

Details instructions for the 2018 EEO-1 filers, including the exact date of the survey opening, will be forthcoming. Filers should refer to the EEO-1 website in the coming weeks for updates on the new schedule. Also, see the EEOC’s FAQ for further information.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
(941) 552-2558

Another Business Resolution: Conduct a Pay Audit in 2019

Pay Audits are different from wage and hour audits. A wage and hour audit looks at whether employees are being paid in compliance with state and federal wage and hour laws. A pay audit reviews whether there may be discrimination in pay practices within an organization. With the #metoo movement and a renewed focus on pay gaps, an internal review of pay practices could save a business from liability under the primary statutes used to combat discriminatory pay gaps – Title VII, the Florida Civil Rights Act, and the Equal Pay Act.

As with other types of claims brought under state and federal discrimination statutes, a claim of disparate pay based on any protected characteristic is subject to the same administrative filing requirement and provides the same remedies as a wrongful termination case. On the other hand, under the Equal Pay Act (which only covers disparities based on gender), there is not an administrative filing requirement, and the definitions and statute of limitations for an employee to bring a claim is the same as those in place for the Fair Labor Standards Act. Further, Equal Pay Act claims do not require proof of intent to discriminate on the part of the employer. And, not having intent as a requirement makes it easier for an employee/former employee to establish a prima facie case. Under the Equal Pay Act, an employee need only show that she works at the same location, performs substantially equal work (regardless of job title), works under substantially equal working conditions, and is paid less than a male counterpart.

In a perfectly competitive labor market, the value an employee contributes to a business should determine that employee’s wage. However, in the real world, there are disparities of income that may be due to differences in labor productivity, and there are wage disparities across genders and ethnicities. When it comes to gender, disparities may be due to:

  • Compensating wage differentials: men may be employed in more dangerous or “dirty” jobs that pay more
  • Choice of college major and choice of career
  • Time constraints: mothers may have only limited time to pursue career advancement
  • Different negotiating skills of men and women
  • The number of years of work experience
  • The number of years in continuous employment
  • The number of hours spent at work
  • Employer discrimination

As set forth above, employer discrimination is only one of several reasons why a gap may exist and employers may have pay gaps that are based on non-discriminatory reasons.  Both the civil rights statutes and the Equal Pay Act provide several defenses to claims of discriminatory pay. Employers can avoid liability by proving the pay differential is due to one of the following reasons:

  • Seniority System
  • Merit Pay System
  • System that measures quality or quantity of work
  • Factor based on any factor other than sex  (this is considered a “catch all” defense)

It is good for employers to be aware of any gaps that exist in its pay practices and understand why they exist. When an employer does not have an explanation, that is when litigation and potential liability can ensue. Below are a few ways that businesses can help prevent (and if necessary defend) discrimination in pay claims:

  • Evaluate all forms of compensation (starting salary, benefits, bonuses, shift differentials, overtime, training opportunities, separation pay, etc.) at least annually for potential pay disparities based on race/ethnicity and gender
    • Evaluate how pay raises and bonuses are determined to ensure that decisions are made in a non-discriminatory manner.
    • Evaluate how you assign your employees to specific jobs.
    • Focus on job recruitment, placement and how pay is assigned to job classes.
  • In addition to an annual assessment, throughout the year conduct periodic “spot” checks for potential compensation problems.
  • Correct problems as soon as they are discovered.
  • Evaluate how women and minorities are placed in your workforce. Do not make assumptions about what they can or cannot do.
    • Does your hiring process seek diversity in the qualified applicant pool?
    • Do you offer career training or opportunities for both genders?
    • If starting salaries and signing bonuses are negotiated, ensure that such a practice does not have an adverse impact on women or minority workers.
    • Evaluate whether all workers have equal opportunity for advancement. Placing one gender in areas that lead to greater advancement could be a violation of law.
  • Periodically review your performance evaluation process and the ratings given to each employee to determine whether the process or the ratings unfairly disadvantage women, or any other protected classes.

This post is part of a series of business resolutions to consider for the new year. In case you missed them, our previous posts in the series discussed Florida minimum wageemployee performance management, and employee handbook/wage audits.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
(941) 552-2558

Business Resolutions: Ensuring Your Business Starts the New Year Off Right

When was the last time that your business had a wage audit to evaluate whether your employees are properly classified under the Fair Labor Standards Act, or had your employee handbook reviewed and revised to bring it up-to-date with the law and current company practices? If it has been a few years, then this may be the year that your business resolves to invest in a wage audit and/or handbook review.

Wage audits include an evaluation of your job positions, pay and overtime policies, as well as payroll records of each position within an organization or department. Sometimes, audits can also include interviews with employees to ascertain if there are any issues that management should be aware of. Audits can reveal if a business has any issues with, not only misclassification of employees as exempt when they should be non-exempt, but whether managers are following the organization’s policies regarding overtime. As a company grows and changes, often the duties of its employees also change. Sometimes these changes are significant enough that a change in classification is in order and a failure to adjust the classification could result in liability. Further, a wage audit can often help to determine if an organization’s accountant or payroll company is calculating overtime in accordance with the applicable regulations. Many a lawsuit are filed against employers who believe that since they have enlisted the assistance of a third party, employee overtime is being calculated appropriately. That is not always the case.

Employee handbooks should be reviewed every couple of years, not only to ensure that the handbook reflects the current state of the law, but also that it reflects the actual practices of a company. Businesses grow and change, and actual practices can start to diverge from what is reflected in the handbook. It is always better to have a handbook that provides policies and procedures that the company is currently using and enforcing. It is never recommended for a company to have policies that it does not follow.

This post is part of a series of business resolutions to consider for the new year. In case you missed them, our previous posts in the series discussed Florida minimum wage and employee performance management.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
(941) 552-2558

Another Business Resolution: Ensure Your Business Implements Florida’s New Minimum Wage

The next suggested resolution in our series of business resolutions is one that all businesses in Florida should implement, as it is legally required. On January 1, 2019, Florida’s minimum wage will increase from $8.25 to $8.46 an hour. Employers should be prepared to make appropriate pay adjustments for their minimum wage earners. Failing to pay non-exempt employees Florida’s statutory minimum wage can result in claims against employers pursuant to Section 24, Article X of the State Constitution and Section 448.110, Florida Statutes. The maximum tip credit ($3.02) that can be taken by Florida employers with tipped employees will remain the same, but the direct wage paid to tipped employees will increase from $5.23 to $5.44 an hour.

In addition to raising the minimum wage, Florida employers are required to post a minimum wage notice in a conspicuous and accessible location. You can download the 2019 Florida Minimum Wage Notice from the Florida Department of Economic Opportunity’s website. This notice requirement is in addition to the requirement that employers post regarding the federal minimum wage (which has not been increased). There will also be commercially available Florida-specific “all-in-one posters” that satisfy both the federal and state notice requirements.

In case you missed it, our first business resolution of this series covered employee performance management.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
(941) 552-2558

What Are Your Company’s Business Resolutions for the New Year?

As 2019 approaches, many companies reflect on the year that has gone by, remembering both the triumphs and missteps. As this year comes to a close, many businesses will be making business resolutions for the new year. You may already have some goals set, but if you do not, this post will be the first in a series designed to provide insight into areas where companies may want to focus in the year ahead.

We will start this series off with our colleague John Hament’s recent article from our Requisite X publication, “Adapting to Change: Reinventing Employee Performance Management.” As explained in this article, for some employers there can be downsides to the traditional annual performance evaluation system. Recognizing these downsides, and ascertaining if a different approach is good for your organization, may be a worthwhile business resolution.

Stay tuned for more resolutions to consider in 2019.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

Nonprofits Misuse of Volunteers During the Holidays Can Be Frightful

Although every penny saved may help support a valuable cause, it is important that an organization not let its use of volunteers lead to legal liability. Volunteers are the foundation upon which many successful nonprofits are built. Properly utilized, volunteers enable a nonprofit to devote valuable capital and resources elsewhere in the organization, allowing it to have a greater impact on its desired cause. Although the work of volunteers is valuable to a nonprofit’s mission, an organization’s management must exercise caution in engaging volunteers to ensure the nonprofit does not inadvertently misclassify individuals as volunteers when they may be considered employees under applicable law. With the holidays upon us, nonprofit organizations often rely more heavily on volunteers. Consequently, they should take extra care that its volunteers are not in fact employees.

As Ryan Portugal explains in our latest edition of Requisite, which focuses on issues related to the operation, management, and sustainability of nonprofit organizations, circumstances in which a volunteer will be treated as an employee under wage and hour laws can have costly legal ramifications for nonprofit organizations.

Read the full article. 

For more articles, giving data, and an interview with A.G. Lafley, view the digital version of Requisite X – The Nonprofit Edition.

Office Holiday Parties: Avoid Adding Your Company to the Naughty List

Harvey Weinstein, Kevin Spacey, Michael Oreskes, Brett Ratner, Louis C.K., Charlie Rose, and Matt Lauer are a few well-known names that have already appeared on the naughty list for 2017. Although the Mad Men days of the sexy secretary sitting on Santa’s lap (the boss’s lap) with his arms wrapped around her while both are drinking a dry martini SHOULD be a vestige of the past, there are those that believe that “keep your hands to yourself” does not apply to them.  And, there are those that understand the “hands-off” rule, yet when under the influence of alcohol, find their inhibitions on the copy room floor.

This year, with stories of sexual harassment and abuse dominating the news, it is more important than ever for employers to consider the potential risks associated with any planned celebration. Employers should keep in mind that office policies that are generally recognized in the workplace sometimes are forgotten when there is a party, especially a party with libations. A holiday office party can embolden inappropriate behavior, from simple innuendos to unwelcome touching that could lead to claims of sexual harassment. The office holiday party can be a quagmire of potential employment issues, even beyond sexual harassment. These issues can include claims due to on-the-job injuries (workers compensation), unpaid wages for attending the party (the Fair Labor Standards Act), or other types of workplace harassment or discrimination (e.g. religion).

As you prepare for your office party, consider whether alcohol should be available, as most issues arise due to someone bending the elbow a bit too much. If you do decide to provide spirits make sure you have someone (a designated responsible adult) that is watching to ensure that your workforce does not get too “relaxed” and cross the line. Possibly limit how much alcohol is served and make sure any employee that drinks a little too much has a ride home. Evaluate in advance whether the party is going to be mandatory or not. If its voluntary and employees do not feel compelled to attend, then employers are not required to compensate employees for their attendance. Review the plans for the party in advance to see if there are any activities that could be considered inappropriate or offensive to members of any protected class.  Finally, make sure that employees understand that the company’s policies and procedures, especially those related to conduct, are still in effect at the party. Most parties are benign and conclude with no real issues to speak of, but you don’t want to be the exception to the rule. You do not want your CEO or VP added to the naughty list.

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
941-552-2558

A Clue to the NLRB’s Future Focus?

In regulatory action last week, the current board of the National Labor Relations Board not-so-subtly identified several areas where the Board wants to reverse course. Specifically, on October 16, 2018, the Board’s General Counsel released four advice memorandums issued during the Obama administration addressing several topics, including dress codes, replacement of striking employees, and video recordings of workplace strikes.

It is uncommon for advice memos to be released, especially those from prior administrations.  Most times, such releases happen after a matter has been resolved or the General Counsel has directed a region to dismiss a case. When memos are released, it is because the Board wants to draw attention to a trending topic or point of emphasis. In this instance, the Board released advice memos that were quite favorable to labor unions and workers:

  • In two advice memos involving Walmart dating to 2013, the Board’s General Counsel at that time recommended that the regional director bring unfair labor practices when the retailer (1) told a plainclothes security guard that he could not wear union clothing while undercover; and (2) prohibited workers from wearing union insignia shirts and then disciplined them for engaging in a work stoppage (which the General Counsel opined was not an unprotected sit-in strike);
  • In a different 2013 memo, the General Counsel found that Boeing acted unlawfully when it recorded union solidarity marches that happened on its property while it also had a rule in its employee handbook that blocked employees from using cameras on its property; and
  • In another advice memo issued in early 2017, the then-General Counsel concluded a California fishery committed an unfair labor practice when it unlawfully replaced striking employees by giving temporary employees permanent positions.

These memos are noteworthy since the current General Counsel, Peter Robb, and the Board at large are unlikely to support the positions espoused in the Obama era memos. For instance, in December 2017, the Board has changed course in the Boeing matter, concluding that the Board’s previous edicts on handbooks gave too much credence to employees’ rights and too little to employers’ interests.

Considering the reversal in Boeing matter, the fact that the General Counsel released the other advice memos on the same day potentially signals those advice memos do not reflect the Trump-era General Counsel or Board’s position. For that reason, employers may wish to challenge similar unfair labor practice findings in other settings.

Still, although these advice memos may be a relic of the Obama-era Board, another administration’s Board could renew the legal theories and positions contained in the advice memos. Thus, at the very least, employers should remain mindful of the views taken in the advice memos and consider potential protective steps.

John Getty*
jgetty@williamsparker.com
(941) 329-6622
*Admitted in Louisiana and Georgia