Thomas G. Collins, Esq., Buchanan Ingersoll & Rooney PC

2015 PACAH Spring Conference September 15-18, 2015

Managing Intermittent Leave: Empowering HR Managers

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FMLA Intermittent Leave

Who has had at least one employee who takes intermittent leave for a chronic condition:Every Monday and/or Friday;Every summer;When scheduled to work 1) graveyard shift or 2) on-call weekends;After they have exhausted PTO leave; orDays immediately before and/or after a holiday?

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COMPLAINT #1

Employee just started working here and is now requesting medical leave (FMLA)

Confirm eligibility‒ 12 months;‒ 1,250 hours in preceding 12 months,‒ at location with 50 employees

within 75-mile radius ** 50 employees in 20+ workweeks of current or preceding calendar year; count all employees on payroll (i.e., seasonal, part-time, interns, etc.); employees working from home are considered employees of “worksite” to which: a) they are assigned, b) their work is assigned, or c) they report.

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Eligibility for FMLA Leave (continued) Intermittent leave may be taken when medically

necessary due to serious health condition of a covered family member of employee or serious injury or illness of a covered service member.

Birth or adoption or placement of child on intermittent basis only with employer consent.

Annually certify employee eligibility, i.e., worked at least 1,250 hours in preceding 12 months during second FMLA leave year.

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COMPLAINT #2Does FMLA really apply to the eligible employee’s condition?

CertificationProvide healthcare provider with job description or list of essential functions of employee’s job.Incomplete or insufficient certification

‒ If missing or contains ambiguous information, company permitted to demand, in writing, employee provide complete and sufficient information within seven days or leave may be delayed or denied.

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Authentication and ClarificationExamples: It “may help” the employee to be off …; Flare-ups may occur “often”…Appropriate company reps (not employee’s direct supervisor) may contact certifying healthcare provider to confirm preparation of certification and clarify meaning of response. WARNING: HR professional or management official should be cognizant of not requesting more info than required to authenticate or clarify info request on form.

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That doctor will sign off on anything.If employer has reason to doubt validity of initial certification, second opinion may be appropriate. Employer may choose physician, but cannot be one employer uses on regular basis.If first and second opinions differ, employer may require employee to see a third physician at company’s expense. Third opinion is binding on all parties.Note: Second and third opinions do not apply to recertification process.

COMPLAINT #3

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COMPLAINT #4

Certification confirms medical condition and states employee may be out 3-4 days a month, but employee is usually absent every Friday due to “bad migraines.”

Recertification Process

Employer may request recertification as follows:If employee is taking solid blocks of leave for more than 30 days, may ask for recertification if leave extends beyond requested leave periodIf leave certified to extend more than six months, the employer may seek recertification every six monthsMay request new certification at beginning of each FMLA leave year

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Recertification (continued) May request recertification in less than 30 days if

a) employee requests an extension of leave; or

b) circumstances described by previous certification have changed significantly; or

(c) employer receives info that casts doubt on employee’s stated reason for absence or continuing validity of certification.

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Lesser utilized provision of FMLA regulations allows employers to provide copy of employee’s recent attendance records to employee’s certifying physician to inquire about whether pattern of leave is consistent with employee’s medical need for leave.

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Complaint #5

Employee Never Schedules Intermittent LeaveRequired to schedule in advance when foreseeable and schedule planned medical treatments in way that is least disruptive to employer’s operations.If you receive this type of request, ask employee about frequency of treatment, office hours of healthcare provider, weekend scheduling options and other ways to schedule appointments outside of scheduled shifts.Employers may delay or deny foreseeable requests when employees fail to provide advance notice. (Careful Here)

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Employee off work due to covered Workers’ Compensation injury for the past 13 weeks now requests three weeks of unused vacation leave?

Concurrent Leave Policy

Ensure your FMLA policy includes provision stating all paid leave (PTO, vacation, workers’ compensation, etc.) runs concurrent with FMLA leave.

COMPLAINT #6

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COMPLAINT #7

Employee off on FMLA leave is on vacation in Mexico for a week?

“Stay Close to Home on Paid Leave” Policy

Pellegrino v. Communications Workers of America

Third Circuit Court of Appeals upheld employer’s policy, as condition of receiving paid sick leave, requiring employees to remain close to home unless for medical treatment or family needs with company’s advance approval.

Fraud, Misrepresentation, Dishonesty Policies

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Employee on FMLA leave is the cashier on duty at Target store and is waiting on HR Manager from current employer.

No Moonlighting PolicyProhibit employees from engaging in outside employment; at minimum, prohibit while on paid or unpaid leave.

COMPLAINT #8

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COMPLAINT #9

Employee calls in on Monday morning and indicates that he will be on FMLA leave intermittently for the next 10 weeks due to an injury.

Call-In PolicyUnder regulations, an employer may require employee provide written notice of need for leave and follow company’s call-in procedures (i.e., call in by a designated time) and provide sufficient information to designate leave as FMLA leave. Employer can also require employees call in periodically and report status and intent to return to work.

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Complaint #10

How do I track employee who calls in and reports that he or she is “taking FMLA” or is “going to be out sick?”

Employees are required to provide sufficient information for employer to designate time off as FMLA leaveTrain your front-line supervisors

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Social Media as an Investigation Tool

The modern private investigator to combat FMLA abuse.

Employers are increasingly using social media to review employees’ activities and determine whether employees are abusing FMLA leave.

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COMPLAINT #11: Fraudster Fred

Fred began taking intermittent FMLA leave because of leg pain complications from a car accident. During absence, several co-workers saw pictures Fred posted on Facebook of himself drinking at a local festival. Co-worker printed out copy of photos and forwarded to HR. Fred’s FMLA certification indicated need for leave based on inability to engage in physical activities. Can you terminate Fred for FMLA fraud?

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Jaszczyszyn v. Advantage Health Physician NetworkCo-worker sees Facebook photos of employee out on FMLA leave for back pain at a local festivalEmployer invited employee back to work to discuss her leave, confirm scope of FMLA leave, and acknowledge company’s fraud policyEmployer showed employee Facebook photos. Employee responded that she was in pain during festival, but just didn’t show pained face in photos. Sixth Circuit upheld decision that employee’s response did not overcome employer’s honest belief defense.

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Lineberry v. RichardsNurse on FMLA leave for injury and doctor certified need due to substantial lifting and mobility restrictions. While on leave, co-worker sees Facebook photos of employee vacationing in Mexico featuring employee riding in boat and lying on her side of bed holding up two bottles of beer in one hand. Nurse’s supervisor informed of photos, called nurse, told her if she was well enough to sit on long flight and go through customs, she could come back to work. Nurse claimed she rode in wheelchair in airports and through customs and was unable to stand for long period of time. After returning to work, employer confronted employee with Facebook photos. Nurse admitted lying about using wheelchair in airport; was then terminated for violating company’s dishonesty policy and misuse of FMLA leave.

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Complaint #12Employee’s unforeseen leave is wreaking havoc on our organization!If employee’s need for intermittent leave is foreseeable, employer may transfer employee during period of intermittent leave to available alternative position for which qualified and better accommodates recurring period of leave; must have equivalent pay and benefits, but not equivalent duties. Alternate position provision also applies to employees requesting reduced work schedule leave, as long as hourly rate and benefits remain same. Note: Cannot eliminate benefits that would not otherwise apply to part-time employees, but can proportionally reduce PTO leave if employer’s normal practice is to base PTO entitlement on number of hours worked.

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Tracking intermittent FMLA leave is impossible!Employers are required to use shortest time period allowed for other types of leave (e.g. 6, 10 or 15 minutes) or 1-hour increments, whichever is shorter. Eligible employee is entitled up to total of 12 workweeks of leave or 26 workweeks for military caregiver leave and total number of hours contained in those workweeks is necessarily depending on specific hours employee would have worked but for use of leave. Make sure company’s paid leave policies use the same time period

– E.g. 8 hours of PTO may be taken on 1-hour increments

Complaint #13

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Calculating FMLA leave for my employees is a nightmare! If employee who would otherwise work 40 hours/week takes off 8 hours, employee would use 1/5 of week of FMLA leave. Similarly, if full-time employee would otherwise work 8 hour days and works 4 hour days under reduced leave schedule, employee would use ½ week of FMLA leave.

Complaint #14

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Calculating time (continued)

If employee is part-time, amount of FMLA leave is determined on pro-rata basis by comparing reduced schedule with employee’s normal schedule.

Sarah normally works 30 hours/week, but only works 20 hours and takes 10 hours of FMLA leave. Sarah’s 10 hours leave constitute 1/3 of week of FMLA leave.

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Calculating time (continued) If employee’s schedule varies from week to week to

such an extent that employer is unable to determine with any certainty how many hours employee would otherwise have worked, a weekly average of hours scheduled over 12 months prior to beginning of leave period (including any hours for leaves of any time) would be used for calculating employee’s leave entitlement.

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If employee would normally be required to work overtime but cannot for FMLA reasons, hours employee would have been required to work may be counted against employee’s FMLA entitlement. This FMLA provision does not apply to voluntary overtime.

Example: If employee normally works 48 hours/week, but is unable to work more than 40 for FMLA-qualifying reasons, employee would utilize 8 hours of FMLA protected leave out of 48-hour workweek or 1/6 of week of FMLA leave.

Calculating time (continued)

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Won’t docking my exempt employees’ pay jeopardize their FLSA exempt status? Leave taken intermittently and charged to employee at an hourly rate does not affect exempt status of an employee who is otherwise exempt from overtime requirements of the FLSA

Complaint #15

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Summary Confirm Eligibility Certification – Second & Third Medical Opinion Recertification Scheduling Intermittent Leave Implement Helpful Policies

– Concurrent Leave

– “Stay Close to Home on Paid Leave”

– No Moonlighting

– Call-In Use Social Media Transfer to Alternate Position

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RECENT & PROPOSED CHANGES TO THE FLSA

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March 13, 2014 President Obama signed a presidential memorandum directing

the U.S. DOL to advance overtime protections for workers.

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Presidential Memorandum “I hereby direct you to propose revisions to

modernize and streamline the existing overtime regulations. In doing so, you shall consider how the regulations could be revised to update existing protections consistent with the intent of the Act; address the changing nature of the workplace; and simplify the regulations to make them easier for both workers and businesses to understand and apply.”

-President Obama That sounds harmless…

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Notice of Proposed Rulemaking

The Notice of Proposed Rulemaking (“NPRM”) was published on July 6, 2015 in the Federal Register (80 FR 38515).

http://www.gpo.gov/fdsys/pkg/FR-2015-07-06/pdf/2015-15464.pdf

Written comments on the Proposed Rule were due by September 4, 2015.

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Key Proposed Changes Standard Salary Level Increase

– Increasing the standard salary level for the white collar exemptions to the 40th percentile of weekly earnings for full-time salaried employees (this would amount to an estimated salary of $970 per week, or $50,440 per year, in 2016);

Inclusion of Incentive Payments– Allowing nondiscretionary bonuses, incentive

payments, and commissions to partially satisfy the standard weekly salary level requirement.

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Key Proposed Changes Highly Compensated Employees Update

– Increasing the total annual compensation requirement needed to maintain the highly compensated employee (“HCE”) exemption to the annualized value of the 90th percentile of weekly earnings of full-time salaried employees (or approximately $123,000 annually); and,

Automatic Updates– Establishing a mechanism for automatically

updating the salary and compensation levels going forward.

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Standard Salary Level Increase

CurrentProposed Change

Minimum Salary = $455 per week or $23,660 per year

Minimum salary = $970 per week or $50,440 per year

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Standard Salary Level Increase

1975 – 62% of full-time salaried workers were eligible for overtime pay.

Today – 8% of full-time salaried workers are eligible.

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Standard Salary Level Increase

If the proposed changes become law, it is estimated that, within the first year, overtime protections would be extended for roughly 5 million workers.

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Standard Salary Level Increase

“That’s how America should do business. In this country, a hard day’s work deserves a fair day’s pay. That’s at the heart of what it means to be middle class in America.”

- President Obama

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Standard Salary Level Increase

It is predicted that the Rule will be adopted by the end of 2015 to take effect in the beginning of 2016.

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Inclusion of Incentive Payments In addition to the above, the DOL is

“considering” allowing employers to include a portion of nondiscretionary bonuses in meeting the proposed salary-level requirements. – Currently, such bonuses are only included in

calculating total annual compensation under the HCE test.

In particular, the DOL is considering whether employers may meet up to 10 percent of the salary level requirement through nondiscretionary bonuses, incentive payments, and commissions.

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Inclusion of Incentive Payments The DOL believes that such bonus payments

should be made on a monthly or more frequent basis to be included in the salary level amount.

It does not currently believe it is appropriate to include commissions or discretionary bonuses in the salary level requirement.

The DOL is seeking comments on the appropriateness of including any such forms of additional compensation in the salary level needed to meet the salary-basis portion of the white collar exemptions.

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Highly CompensatedEmployees Update

The DOL maintains a special exemption—involving a less rigorous duties test—for HCEs.

This exemption currently applies to an employee who earns a total annual compensation of $100,000 or more, and “customarily and regularly” performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee.

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Highly CompensatedEmployees Update

The DOL proposes increasing the salary level requirement for this exemption from the current threshold salary of $100,000 per year to an amount equal to the 90th percentile of earnings for full-time salaried workers.

In 2013, this figure corresponded to a $122,148 annual salary.

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Automatic Updates

The DOL proposes incorporating automatic annual updates to the salary level test to ensure that salary levels change consistently and gradually (rather than requiring new regulations be issued in order to update the salary requirement).

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Automatic Updates The DOL has requested comments on the

methodology it should use to automatically update the standard salary level and HCE compensation requirements. Currently, it is considering two approaches:– (1) a “fixed percentile” approach tied to the 40th

percentile of earnings for full-time salaried workers (and tied to the 90th percentile of such earnings for HCE compensation); or,

– (2) an approach that adjusts salary and compensation levels based on changes in the Consumer Price Index (a commonly used economic indicator for measuring inflation).

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No Proposed Changes to “Duties” Test

The DOL has not proposed changes to the existing duties test.

It stated that “[a] regularly updated salary level will assist in screening out employees who spend significant amounts of time on nonexempt duties and for whom exempt work is not their primary duty.”

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No Proposed Changes to “Duties” Test While the DOL currently has chosen not to propose

changes to the “duties” portion of the white-collar tests, it has solicited comments on whether such changes should occur:– Whether exempt employees should be required to spend a

minimum amount of time on exempt work;– Whether the DOL should adopt the “California” requirement

that more than 50% percent of an exempt employee’s time be spent performing exempt duties;

– Whether the DOL should reconsider reinstating a long and short duties test (which existed prior to the 2004 regulatory amendments); and

– Whether the DOL should eliminate the “concurrent duties” rules for executive employees (which currently allow a manager to perform exempt and nonexempt duties at the same time).

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Although not directly addressed in the proposed rule because it was considered “beyond the scope of this rulemaking,” the DOL acknowledged that currently exempt employees who work remotely on electronic devices may pose overtime concerns for employers should they lose their exempt status due to the forthcoming rule change.

Other Acknowledgments in the NPRM

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Other Acknowledgments in the NPRM

In response to this concern, the DOL stated that it will publish a Request for Information “in the near future” seeking information from stakeholders on the use of electronic devices by overtime-protected employees outside of scheduled work hours.

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Reactions to Proposed Changes

The Obama administration welcomed DOL’s changes, hailing them as measures designed to ensure that employees receive fair pay and that employers are not undercut by low-wage competitors.

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Reactions to Proposed Changes

But critics warn that an increased overtime threshold would result in increased business costs and a rise in the use of part-time entry-level workers.

Critics further caution that many reclassified employees might lose benefits, flexibility, status and opportunities for advancement.

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What Can Employers Do? Review current employee classifications, existing

jobs and job descriptions.– Make sure each position is properly classified as

exempt or non-exempt. In doing so, get feedback from managers to

confirm that the essential functions listed in the job description reflect actual duties of the job.– It is critical to communicate with those who know

the job and understand what the job actually entails. Evaluate the classification status of workers

carefully at the outset of the work relationship.

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What Can Employers Do? Jobs change over time so it is important to audit them

periodically. Currently, there is no requirement that employers have

to spend at least 50% of their time performing management duties to remain exempt, but the proposed changes talk about this possibly becoming a requirement.

– Something employers should be aware of in case it becomes part of the requirements for an employer to qualify as exempt.

– If it becomes a requirement, employers may need to start tracking the percentage of time spent on essential functions in order to substantiate the exempt status given for each job.

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What Can Employers Do? Consider increasing salaries of employers of exempt workers

who earn under $50,400 per year. Or, reclassify employers to nonexempt—but reclassifications

should be undertaken with caution.– Look closely at each position’s “primary duty” and make sure

any reclassification falls within the guidelines.– If any employer decides to make changes to employees’

classifications, clearly communicate those changes to the impacted employees.

Shifting employees from salary to hourly or from overtime-exempt to overtime-eligible will have a wide range of operational and legal implications for employers and what employers save in direct labor costs could be lost in decreased morale and production.

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What Can Employers Do? Regardless of whether an employer

reclassifies a position, it is good practice to have all employees review and sign off on their job descriptions.

Employers need to make sure employees comply with job descriptions, as the DOL may focus more on what an employee actually does, rather than how that employee’s job is described in determining compliance.

Be prepared for increased costs.

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Timeline for Proposed Changes Comment period closed on September 4, 2015. Comments must be considered before the final

rule is announced. The DOL will then draft final regulations. Process can take upwards of several years, or

as little as a few months. While the DOL has indicated that it wants the

changes to go into effect in early 2016, an absolute date is not certain at this time.

The last time the DOL proposed changes to the overtime rules in 2003, it took nearly 13 months to issue final rules in 2004.

Thomas G. Collins| 717-237-4843 | thomas.collins@bipc.com

Thank You!