New DOL Regulations Change & Clarify Family and Medical Leave Rules

November 17, 2008

Today, the federal Department of Labor (DOL) issued its much-anticipated final regulations under the federal Family and Medical Leave Act (FMLA).  This e-update explains some of the more significant changes affecting employers under the new, non-military family and medical leave rules.    

Employee Eligibility.  The basic eligibility requirements of 12 months of total employment and 1250 hours of work in the year immediately preceding the start of the requested leave remain the same; however, how those numbers are calculated has changed.  In determining whether the employee has 12 months of total employment, under the new regulations employers need not count periods of employment preceding a break in service of 7 years or more unless the break in service was for military leave, or where a collective bargaining or other written agreement gives the employee an expectation that s/he would be rehired after such a break in service. 

In determining the 1250 hours requirement, the employer must now credit an employee returning from National Guard or Reserve military duty with the hours of service that s/he would have worked but for the military service.  The hours to be credited to the employee should be based on the employee’s pre-service work schedule.  

Serious Health Condition.  A “serious health condition” may still be established under the FMLA in seven different types of medical circumstances.  The most common circumstance requires incapacity for more than 3 consecutive calendar days and visiting a doctor at least twice.  If an employee is using this method to establish a serious health condition, the new regulations clarify that both doctor visits must occur within 30 days of the first day of incapacity, absent extenuating circumstances.   

In the alternative circumstance where the period of more than 3 days of incapacity is followed by one in-person doctor visit and a “regimen of continuing treatment” (e.g., prescription medication under doctor’s supervision), the new rules now require that the doctor visit must take place within 7 days of the first day of incapacity.  

For chronic serious health conditions, employees are now required to seek periodic treatment from a healthcare provider at least twice each year. 

The new rules also clarify what it means to receive “treatment” from a physician.  To count under the FMLA, an employee must have an in-person visit with his physician for an examination, evaluation or specific treatment.  “Treatment” does not include telephone calls, letters, e-mails or text messages with the physician.

Health Care Providers.  The list of eligible health care providers has been expanded to include Physician Assistants.

Substitution of Paid Leave.  The new rules provide more clarity regarding the use of vacation, sick, or PTO during leave.  Now, the employer may require the employee to use any such paid time during an FMLA leave taken for any reason.  In addition, employers may now place limitations on the substitution of paid vacation or personal leave.  For example, if an employer’s paid vacation policy requires 2 days’ notice for the use of vacation, an employee cannot use paid vacation during his or her FMLA leave unless he provides the requisite notice.  An employer must provide advance, written notice to employees of this requirement as part of its FMLA notice process. 

Additionally, the rules clarify that employers and employees may voluntarily agree to supplement paid disability and workers’ compensation benefits with paid time off benefits during FMLA leave.

Intermittent or Reduced Schedule Leave.  The final regulations provide clarification on a number of intermittent-leave issues.  It is now clear, for example, that the option to transfer employees taking intermittent leave to a different position is not available when the intermittent absences are unscheduled or unforeseeable.  Employers may transfer employees on intermittent leave to an alternate position only in cases of planned medical treatment. 

The new rules also clarify that employers should account for intermittent or reduced schedule leave using an increment no greater than the shortest period of time the employer uses to account for other forms of leave (as opposed to its payroll system), provided it is not greater than 1 hour.  For example, if the employer uses different increments to account for different types of leave (e.g., accounting for sick leave in 30-minute increments and vacation leave in 1-hour increments), the employer could not account for the FMLA leave in an increment larger than 30 minutes. 

There is also now an exception to the rule that employees may not be charged with more FMLA time than they have actually used.  Where it is physically impossible for an employee to begin or end work mid-way through a shift, the employer may count the hours of the full shift against the employee’s FMLA leave entitlement.  For example, in the case of a flight attendant whose shift (which takes place in an airplane over the Atlantic Ocean) is 8 hours, but she only needs 3 hours of FMLA leave on that particular day, the employer may charge the full 8-hour shift against her FMLA leave entitlement under the theory of “physical impossibility.”

Perfect Attendance Awards.  The new rules permit employers to deny perfect attendance bonuses or related awards to employees who take FMLA leave, as long as employees with non-FMLA absences are treated the same way.  For example, if an employer does not count paid vacation time against employees under its perfect attendance award policy, the employer cannot deny the bonus to an employee who uses paid vacation while taking FMLA leave.   

Equivalent Position.  The DOL has clarified that an “equivalent position” is one that is “virtually identical” to the employee’s prior position.  “Virtually identical” speaks to pay, benefits, working conditions, including privileges, perks and status, while “substantially similar” speaks to an employee’s duties and responsibilities.

Light Duty Assignments.  A “light duty” assignment is one where the employee is not performing the essential functions of his or her regular job, but is performing other, different job functions or a different position altogether.  At least 2 new and non-employer friendly rules apply to employees on light duty assignments. 

First, employees who voluntarily accept light duty assignments do not waive their rights to reinstatement under the FMLA during the period of time they are on the light duty assignment.  This means that an employee’s right to restoration is held in abeyance during the light duty assignment.  If the assignment is of indefinite duration, the employee’s reinstatement rights will be held in abeyance and remain open-ended until the end of the 12-month leave period that the employer uses to calculate FMLA leave.  If the assignment is finite in length, at the conclusion of the assignment, the employee has the right to be reinstated to his former position.  If the assignment ends, and the employee cannot perform the essential functions of his prior position, the employee must be allowed to take FMLA leave. 

Second, time spent working in a voluntary light duty assignment cannot be counted against the employee’s 12-week FMLA entitlement.  This rule rejects prior court decisions allowing light-duty time to be counted as FMLA leave.   

Calculation of Leave for Varied and Irregular Schedules and Overtime.  The DOL has clarified the method used to determine the amount of FMLA taken by an employee with a schedule that varies from week to week.  Employers must compare the number of hours actually worked by the employee in an FMLA workweek to the number of hours the employee would have worked but for the FMLA leave.  The result represents the percentage of an FMLA workweek that the employee has taken.  The resulting percentage should then be converted to hours and subtracted from the employee’s leave allotment.

If the employee’s schedule is so varied that a regular pattern cannot be discerned, the employer should calculate a weekly average over the 12 months prior to the leave (rather than just the prior 12 weeks as required under the current rule) and use that as the employee’s actual average workweek and the amount of FMLA time taken should be subtracted from that number.

An employer may charge overtime against an employee’s leave allotment where the employee would have been required to work the overtime, but cannot do so because of FMLA leave.  Of course, an employer is prohibited from using FMLA leave as a basis to schedule and assign overtime.

Joint Employers.  Both the old and new regulations recognize that some employees have “joint employers,” both of whom have responsibilities under the FMLA.  Under the new regulations, Professional Employment Organizations (PEOs) are not a joint employer if they simply perform administrative functions, such as those related to payroll and benefits.  The final regulations also delete the confusing (and outdated) reference to “leasing agencies.”  The final rule refers only to temporary placement agencies and PEOs.

Waiver of Rights.  The final regulations make clear that employees can lawfully waive their FMLA rights based on prior employer conduct without court or DOL approval.  Prospective waiver of FMLA rights remains unlawful.  This rule clarifies a split of opinion on the issue among various courts of appeals.

Required Employer Notices.  The DOL has consolidated all of the notice obligations into one section of the new regulations and placed new notice obligations on employers.  The rules clarify that at least 4 types of FMLA notice must be given by employers:  (1) general notice; (2) eligibility notice; (3) rights and responsibilities notice; and (4) designation notice.  The first notice is general in nature and must be given to all employees.  The other 3 notices are employee specific and are triggered upon the employer learning of the employee’s need for FMLA leave.  The DOL has created template notice documents that employers may use to ensure they are providing employees with all required information.  Employers should ensure that their FMLA policies contain each element of the DOL’s prototype notice documents.

The time for employers to provide the notices has also changed.  If the general notice is not contained in the employee handbook, it must be provided to each employee at the time of hire instead of annually.  And, in a welcome change for employers, the time period to provide the notices after learning of an employee’s need for leave has been increased from 2 business days to 5.

Where an employer has a “significant portion” of employees not literate in English, the employer must provide the poster and general notice in a language in which they are literate.

And, for the first time, the DOL now recognizes the employer’s ability to post and provide notices electronically.  However, electronic notices will not be sufficient if employees do not have employer-provided computer access. 

Required Employee Notices.  The regulations also impose new obligations on employees who are requesting FMLA leave.  For example, for unforeseeable leave, employees are now required to give notice of the need for FMLA leave on the same day that they learn of the need for leave, or the next business day -- instead of 2 business days after the need arises, as was allowed under the previous regulations.  More time must be allowed, however, if the particular facts and circumstances make it impracticable for the employee to comply.

With regard to foreseeable leaves, the employee must still provide 30 days’ advance notice, or as much advance notice as is practicable.  When 30 days’ notice is not possible, however, the employee must give notice to the employer on the same day that s/he learns of the need for leave, or the next business day, unless circumstances make this impracticable.

If an employee fails to provide timely notice (and the employer has complied with all of its own notice obligations), the employer may delay approval of the leave for the period of time that the employee reasonably should have provided notice but did not.  If the employee nevertheless takes leave, the absence is unprotected by FMLA and s/he may be subject to discipline or discharge consistent with the employer’s policies regarding any type of unauthorized absence.

The required content of employee notice has also changed.  The new rules emphasize that employees must provide enough specific information to enable the employer to determine if the absence is for a qualifying serious health condition.  Notably, if the employee is seeking additional leave for a condition that has already been designated as FMLA qualifying, the employee is now required to specifically notify the employer of this fact when requesting leave.  The regulations confirm that employees cannot merely “call in sick” for subsequent absences and trigger FMLA protection.

Employer Call-In Procedures.  An employer may require employees to follow its standard notice and procedural requirements for requesting leave.  For example, absent unusual circumstances, employers may require employees to request foreseeable leave in writing and follow a call-in procedure for absences whereby a specific phone number must be used or a specific individual must be contacted.  If employees do not comply, FMLA leave may be delayed or denied.  Under the old regulations, the employer could discipline an employee for the failure to follow the call-in procedure, but could not delay or deny the leave.  Of course, an employer may not impose stricter call-in procedures for FMLA absences than other types of absences.

Medical Certification.  The DOL has created two new prototype medical certifications for employees seeking leave for their own serious health condition or to care for a family member with a serious health condition.  The new forms require physicians to indicate their area(s) of specialty.

The time for an employer to provide the certification form to an employee requesting FMLA leave has been increased from 2 to 5 business days.  The regulations retain the 15-calendar-day time frame for an employee to return the certification form, and expressly require employers to extend the time period when an employee establishes that she has been using diligent and good faith efforts to complete and return the form.  Notably, the regulations require the employee to communicate with the employer during the 15-day period to prove that s/he is trying to obtain the certification.

Additionally, a new process must be followed when employers receive incomplete certification forms.  Employers must notify employees in writing of the specific defects and give them 7 days to cure the deficiency.  If the employee fails to comply, leave may be denied.  This process is only used when the form is incomplete, and cannot be used to “clarify” the information that is provided on the document.

Recertification and Second or Third Opinions.  The new regulations retain the general rule that recertification may not be requested more frequently than every 30 days and in connection with an absence.  There is now a new 6-month rule, which allows recertification every 6 months in connection with an absence where the original certification provided an indefinite duration for the employee’s medical condition.  Additionally, when asking for a recertification, an employer may provide information to the doctor regarding the employee’s absenteeism record.

Employer Contact with Physicians.  Employers may now contact physicians directly to authenticate an employee’s medical certification and/or clarify the information provided on it.  However, the employer may make such contact only after first attempting to cure a deficiency in the certification by contact with the employee.  Further, the employee’s direct supervisor may not contact the employee’s doctor under any circumstances.  Only the employer’s health care practitioner, human resources professional, leave administrator, management official, or third-party administrator may make such contact.  When making the contact, employers may not ask about information outside the scope of the certification.

The regulations also clarify the interaction between the FMLA and HIPAA when an employer makes contact with the employee’s doctor.  If an employee’s doctor (who is likely a covered entity under HIPAA) refuses to provide information without a HIPAA-compliant authorization from the employee, the employee has an obligation to provide such an authorization.  If he or she refuses, the employer may delay or deny the FMLA leave because the certification is unclear.        

Fitness for Duty Certification.  Employers may now require more than just a “simple statement” of the employee’s fitness for duty when returning from FMLA leave.  Employers may inquire about the employee’s ability to perform essential functions, but only if the employer provided the employee with a list of her essential job functions at the time the employer designated the leave as FMLA leave.

Additionally, under certain narrow circumstances, employers may require fitness for duty certifications at the end of each intermittent leave period (up to once every 30 days) if reasonable safety concerns exist regarding the ability of the employee to perform her job.  The DOL intends for this to be a narrow exception.  For example, it may be used for a roofer who experiences panic attacks, but may not be used (under most circumstances) for a cashier who experiences migraines.