The federal Family and Medical Leave Act of 1993 has been around for about 15 years. The law provides eligible employees with up to 12 weeks of job-protected leave. The reasons for leave include their own or a covered relation’s “serious health condition,” or to care for a newborn or adopted child.

While the law is fairly easy to describe, employers usually find it hard to administer according to its terms. Employers have hired entire teams of employees whose entire job is devoted to administer leaves. Some large employers even have “outsourced” leave management to third party administrators.

Administering FMLA leave is so hard primarily because of regulations that the U.S. Department of Labor promulgated following the law’s passage. The regulations broadly interpreted the law, permitting never-ending “intermittent” leave, restricting employers’ ability to verify the bona fides of a leave request, permitting employees to give little or no notice, defining “serious health condition” so broadly that it includes almost any ailment, etc.

After years of litigation over the FMLA’s meaning, including invalidation of a few of the regulations because they were not adequately grounded in the statute, the DOL undertook to review and revise the regulations. On February 11, 2008, the DOL issued a “Notice of Proposed Rulemaking,” in which the DOL outlines some changes it intends to make to its regulations. Some are technical; others are intended to better organize the rules. Some, however, are alterations to the interpretation of the law. In addition, the DOL seeks comments about the new leave provisions for families of members of the military under the National Defense Authorization Act. If you do not have time to sift through 127 pages of three-columned text in tiny type, here are the main proposed changes and their effect on the FMLA.

Employer Status

Under existing law, temporary staffing firms often will be considered “joint employers” with the company to which staff is assigned. The proposed regulation will exclude “Professional Employer Organizations” or PEOs from the joint-employer provisions. PEOs are vendors that provide administrative services, such as payroll, benefits administration and the like. They are distinguished from “temporary staffing agencies,” which remain susceptible to joint employer claims.

Eligible Employees

The DOL addressed when breaks in service will not be counted in determining whether an employee has been employed for the 12 months required to confer eligibility. One appellate decision held that an employee could have an unlimited break in service and still be eligible upon return. Under the new regulations, the DOL places a five-year limit on breaks in service, except when the break is due to military obligations, or when there is a written agreement requiring reinstatement. The proposed regulations also clarify that employees assigned to flexible worksites will be “eligible” based on the worksite in which they physically work after being assigned to a particular place for one year or more.

Serious Health Condition

Employers seeking relief from the loose definition of “serious health condition” will be disappointed by the proposed regulations. In fact, the DOL made clear that the minor illnesses listed as examples of non-serious conditions are not disqualified as a matter of law. Rather, the proposed regulations emphasize that problems such as colds, ear aches, the flu, routine dental procedures, and the like are ordinarily not “serious health conditions,” but they may be. On the other hand, the proposed rules will tighten the definition of “continuing treatment,” a requisite for “serious health conditions.” To be “continuing” based on multiple visits to a health care provider, at least two visits must occur within 30 days. The draft regulations require a “chronic” condition to require treatment at least twice per year.

Types of Leave

The proposed regulations are reorganized to consolidate discussions concerning certain types of leave. These include: leaves for substance abuse, to bond with a newborn, to bond with an adopted or foster child, and pregnancy leave.

Intermittent and Reduced Schedule Leave

Although this area of the law generally creates the most administrative problems for employers, and is the most susceptible to abuse, the DOL did not make many changes. Under existing regulations, employees must merely “attempt” to schedule leave so as to not disrupt the employer’s operations. This provision will now require a “reasonable effort.” The proposed regulations also contain an explanation of how to count intermittent leave taken during overtime hours.

“Substitution” of Paid Leave

The DOL’s proposed rules clarify that “substitution” simply means that employer paid leave programs, such as PTO, sick time, vacation, etc., “run concurrently” with FMLA. The draft proposes that employers may apply their normal eligibility requirements to such paid leave programs while counting the time off against the FMLA entitlement. The DOL did not address whether employers may require employees to use such paid leave when they are receiving other paid benefits, which was addressed by the Seventh Circuit in Repa v. Roadway Express last year. (Under Repa, employers may not do so.)

Bonuses

The DOL proposes to revise its discussion of bonuses to clarify that employees on FMLA may be ineligible for bonuses that would have been earned if the employee were actively employed. The proposed regulations emphasize that the employee’s eligibility must be on the same terms as any other form of absence. This proposal will make it possible for employers to reward employees for “perfect attendance” without having to give bonuses to employees on FMLA.

Releases

The DOL appears set to permit releases of past or existing FMLA claims without court or DOL approval. If adopted, this provision would negate the Fourth Circuit’s decision in Taylor v. Progress Energy, which held that releases cannot include FMLA claims. It would still be unlawful to prospectively release FMLA rights, consistent with current law and interpretations.

Notices

The proposed regulations will consolidate and explain the various notice requirements in the FMLA. On-line notice will be expressly permitted under specified conditions. Employers will have to distribute general FMLA information in employee handbooks, or at least annually. Employers will have five business days, rather than two, to notify employees they are eligible for leave once the employer receives sufficient information to know the employee is requesting FMLA-covered leave.

The draft regulations also impose additional requirements regarding the content of such notices, including a statement of job duties if a fitness-for-duty examination is required as a condition of reinstatement. The regulations deal with “designation” of leave, recognizing that retroactive leave may be allowed absent a showing of individualized harm, and that employers may not be able to designate leave until they have sufficient information that leave is FMLA-qualifying.

Medical Certification

The proposed regulations explain the difference between an incomplete and inadequate FMLA medical certification. Employees will have seven days to correct problems. Employers will be required to specify the perceived deficiencies. Significantly, the new regulations clarify that employers may deny leave after the employee is given an adequate chance to cure the certification but fails to do so. Similarly, employers may deny leave when employees do not cooperate in providing certifications.

The proposed rules also implement some changes to the medical certification forms to make them easier for health care providers to complete. The revised medical certification form will expressly require healthcare providers to designate intermittent leave as “medically necessary,” an omission from the current form. Finally, the DOL intends to make it possible for employers to authenticate the medical certification form without employee consent, and to clarify information in the form if the employee authorizes the healthcare professional to do so under existing HIPAA requirements. Employees who fail to consent may lose FMLA entitlement if the clarifications are necessary for the employer to validate the need for leave.

Military Leave

The DOL did not issue proposed regulations regarding the recent enactment of leave for families of qualifying service members under the National Defense Authorization Act. However, the DOL seeks comments regarding a number of issues, such as what is a “qualifying exigency,” which entitles eligible employees to time off.

Standard Forms

The DOL is proposing to revise a number of its standard forms to reflect the new regulations. These include the WH-380 medical certification form, the Publication 1420 notice of rights, the WH-381 model notice of eligibility to employees, and a new WH-382 model “designation” notice. Of course, these forms will not necessarily be complaint with California law, so employers must carefully consider how to revise their current forms.

Conclusion

It is impossible to detail in this column every proposed change in the FMLA regulations. To read the proposals, including the DOL’s synopsis of feedback it received from employers, employees, and advocacy groups, access them on the Internet at http://www.dol.gov/esa/whd/fmla/FedRegNPRM.pdf.

To summarize, though, the proposed regulations at most make only modest changes to some of the most vexing aspects of the FMLA. Nevertheless, employers and employees will welcome some of the clarifications.

For those employers seeking different or further revisions, the DOL desires comments regarding proposed regulations they become final. Employers wishing to have their voices heard may do so by April 11, 2008. Comments may be sent electronically, via www.regulations.gov, referencing RIN 1215-AB35. They also may be submitted by mail to: Richard M. Brennan, Sr. Regulatory Officer, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue, N.W., Washington, D.C. 20210.

Once the regulations are finalized, there will be new posters to hang and new policies and procedures to draft and administer. Additionally, it will remain to be seen whether the California Fair Employment and Housing Commission will undertake to revise its own regulations. In situations where both state and federal law provide for leave, the more employee-generous provisions apply. Employers should carefully monitor the progress of these regulations and ensure compliance once they are issued.

X