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Posts Tagged ‘FMLA’

IRS and DOL Announce Employers Can Take Immediate Advantage of Tax Credit Offsets Under the Families First Coronavirus Response Act

Posted on: March 23rd, 2020

By: Jeffrey A. Hord

On Friday, the Internal Revenue Service and U.S. Department of Labor issued an announcement regarding the timing of reimbursement by the federal government to employers for paid emergency leave and expanded FMLA leave required under the new Families First Coronavirus Response Act (“FFCRA”). This guidance (available here) represents an important step towards providing employers with greater clarity as to how and when their businesses can obtain tax relief relating to the cost of providing Coronavirus-related leave to employees.

As we covered in this Blog last week, the FFCRA requires private employers with fewer than 500 employees to provide paid sick leave and paid family leave for certain individuals impacted by the COVID-19 pandemic. Understandably, small businesses have been extremely anxious about the financial burden of complying with these new requirements, particularly during this time of economic uncertainty and unrest. For this reason, the FFCRA created a series of refundable tax credits for employers providing paid emergency sick leave or paid FMLA leave.  As written, however, the FFCRA left unanswered many key questions regarding the process for obtaining these credits, the timing of subsequent reimbursement, and so on.

In Friday’s announcement, the DOL and IRS made clear that employers can begin to “take immediate advantage” of these tax credits by retaining and accessing funds that they would otherwise pay to the IRS in payroll taxes. Here are some of the “key takeaways” highlighted in the announcement:

  • Complete Coverage
    • The tax relief provisions of the FFCRA are intended to provide “dollar-for-dollar,” 100% reimbursement for Coronavirus-related employee leave.
      • Health insurance costs are also included in the credit: the amount of the credit is increased by the employer’s “Qualified Health Plan Expenses” that are allocable to the qualified sick leave wages.
    • Employers face no payroll tax liability.
  • Prompt Recoupment of Employer Costs
    • Employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.
      • Payroll taxes available for retention include withheld federal income taxes and both the employer and employee shares of Social Security and Medicare taxes.
    • In other words, any taxes held in escrow for payment on FICA, Social Security and Medicare taxes now could be used to pay employees taking paid leave under the new law.
    • If these retained payroll taxes are not enough to cover the cost of leave paid out to employees, employers will be able file a request for an accelerated payment from the IRS.
      • The turnaround time for such requests is expected to be “two weeks or less.”
  • Relaxed Compliance
    • The Department of Labor is issuing a “temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act.”
      • Under this policy, DOL will not bring an enforcement action against any employer for violations of the FFCRA until May 2, 2020—thirty (30) days after its effective date—so long as the employer has “acted reasonably and in good faith” to comply.
        • According to DOL, “good faith” exists when: (i) violations are remedied and the employee is made whole as soon as practicable by the employer, (ii) the violations were not willful, and (iii) the employer submits a written commitment to comply in the future.
  • Small Business Protection
    • Businesses with fewer than 50 employees are eligible for an exemption from the leave requirements relating to school closings and/or unavailable child care.
      • As with the exemptions set forth in Sections 3102 and 5111 of the FFCRA, the employer must show that compliance would “jeopardize the viability of the business as a going concern”; i.e., the ability of the business to remain open and continue operating.
      • DOL will be providing emergency guidance establishing simple and clear criteria defining the circumstances that will meet the standard of “jeopardy to the viability of an employer’s business as a going concern.”
    • While not referenced in Friday’s announcement, small business (with fewer than 50 employees) are already exempt from civil liability in an FMLA lawsuit relating to the FFCRA’s expanded family leave provisions.[1]

This announcement is sure to give some comfort to employers worried about how they would cover paid leave mandates without knowing when they might be reimbursed for those substantial costs. Cash flow concerns have already caused many businesses to make difficult furlough and termination decisions; hopefully, this guidance will help employers navigate through this unprecedented time.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the Coronavirus pandemic, including issues related to Labor & Employment, Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

 **DISCLAIMER: The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19. The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement. We can only give legal advice to clients. Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG. An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest. As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce educational content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such. We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.** 

[1] See Emergency Family and Medical Leave Expansion Act, Section 3104.

U.S. Department of Labor Issues COVID-19 Guidance on FLSA and FMLA

Posted on: March 20th, 2020

By: Catherine Scott

As the federal government continues to grapple with questions from employers regarding COVID-19, the federal agencies have begun to roll out new guidance. The latest comes from the U.S. Department of Labor (DOL), which has issued guidance for employers seeking answers concerning their obligations pursuant to the Fair Labor Standards Act (FLSA) and Family and Medical Leave Act (FMLA).

DOL Guidance for FLSA

The FLSA provides rules and regulations concerning how employees must be paid, including the payment of wages and overtime. Employers around the country have wrestled with whether they can reduce salary and/or hours or furlough or lay off employees as the economy slows down due to COVID-19 and whether employees are required to be paid and in what manner.

The DOL has answered several frequently asked questions concerning these issues. The latest guidance provides as follows:

  • For non-exempt, hourly employees, employers can reduce their hours and/or pay, so long as minimum wage and overtime requirements are met. Non-exempt, hourly employees also can be placed on an unpaid leave of absence or furlough or be laid off due to an economic slowdown;
  • For exempt employees, employers are generally required to pay these employees their full weekly salary if any work is done during the workweek (subject to exceptions, such as when the employer is open for business and an employee, who has no PTO remaining or hasn’t qualified, misses an entire day of work).  Of course, exempt employees can be required to use any accrued, unused vacation or paid time off under the FLSA for any missed time so long as they are still being paid their salary.
  • All employees must generally be paid for telework performed at home, subject to the limitations described above;
  • Employees of private organizations are generally not allowed to volunteer their normal services without pay, subject to a few limited exceptions. Employees may volunteer for public organizations without pay if they (a) perform such services for civic, charitable or humanitarian reasons without promise, expectation, or receipt of compensation; (b) offer their services freely and without coercion, direct or implied; and, (c) are not otherwise employed by the same public agency to perform the same services as those for which they propose to volunteer.

Pay issues can be complicated and very fact-specific (and state-specific) so if you have a question about furloughs, layoffs, or schedule or compensation reductions (whether temporarily or permanently), please contact us so we can assess the individual factual and legal circumstances of your situation.

DOL Guidance for FMLA

Similarly, employers have wrestled with their obligations under the FMLA and whether they must provide job-protected leave to employees who need time away for a qualifying reason.  Initially, it is important to understand that any employer that has between 50 – 500 employees should first familiarize itself with the Families First Coronavirus Response Act as that Act (which will be effective April 2, 2020) substantially expands some of the obligations traditional imposed on employers under the FMLA.  For those employers, however, that are below 50 or above 50 employees, you should keep the following principles in mind in dealing with the Coronavirus.

  • Employees who develop complications from COVID-19 may have a “serious health condition” that would trigger FMLA leave. The same is true of a “family member,” defined by the FMLA as a spouse, child, or parent, who develops complications from COVID-19;
  • However, leave taken by an employee to avoid exposure to COVID-19 would not be covered by the traditional principles of the FMLA;
  • The traditional FMLA does not currently cover employees who require leave to tend to healthy children or children who have been dismissed from school or childcare by their state governments;
  • The traditional FMLA provides only for unpaid leave to employees who qualify; however, the FMLA allows for employees to substitute paid leave in place of unpaid leave in certain circumstances and if the employer’s policies provide for such paid leave;
  • Employees seeking to use FMLA leave are required to provide 30-day advance notice of the need to take FMLA leave when the need is foreseeable and such notice is practicable.  In addition, employers may require employees to provide:
    • medical certification supporting the need for leave due to a serious health condition affecting the employee or a spouse, son, daughter or parent, including periodic recertification;
    • second or third medical opinions (at the employer’s expense);
    • periodic reports during FMLA leave regarding the employee’s status and intent to return to work; and
    • consistent with a uniformly-applied policy or practice for similarly-situated employees, a fitness for duty certification. (Employers should be aware that fitness-for-duty certifications may be difficult to obtain during a pandemic.)

The Department of Labor is generally encouraging employers to be flexible in dealing with situations involving employees affected by COVID-19, including re-examining both paid and unpaid leave policies in place at the employer and allowing paid telecommuting to occur.

Additional information: 

The FMG Coronavirus Task Team will be conducting a series of webinars on Coronavirus issues every day for the next week. We will discuss the impact of Coronavirus for companies in general, but also for business in insurance, healthcare, California specific issues, cybersecurity, and tort. Click here to register.

FMG has formed a Coronavirus Task Force to provide up-to-the-minute information, strategic advice, and practical solutions for our clients. Our group is an interdisciplinary team of attorneys who can address the multitude of legal issues arising out of the Coronavirus pandemic, including issues related to Healthcare, Product Liability, Tort Liability, Data Privacy, and Cyber and Local Governments. For more information about the Task Force, click here.

You can also contact your FMG relationship partner or email the team with any questions at [email protected].

**DISCLAIMER: The attorneys at Freeman Mathis & Gary, LLP (“FMG”) have been working hard to produce educational content to address issues arising from the concern over COVID-19. The webinars and our written material have produced many questions. Some we have been able to answer, but many we cannot without a specific legal engagement. We can only give legal advice to clients. Please be aware that your attendance at one of our webinars or receipt of our written material does not establish an attorney-client relationship between you and FMG. An attorney-client relationship will not exist unless and until an FMG partner expressly and explicitly states IN WRITING that FMG will undertake an attorney-client relationship with you, after ascertaining that the firm does not have any legal conflicts of interest. As a result, you should not transmit any personal or confidential information to FMG unless we have entered into a formal written agreement with you.  We will continue to produce educational content for the public, but we must point out that none of our webinars, articles, blog posts, or other similar material constitutes legal advice, does not create an attorney client relationship and you cannot rely on it as such. We hope you will continue to take advantage of the conferences and materials that may pertain to your work or interests.** 

Are You Prepared To Grant Intermittent Family Medical Leave?

Posted on: May 14th, 2019

By: David Daniels

One of the biggest employer complaints about the Family and Medical Leave Act (FMLA) is the productivity problems caused by employees’ use—and abuse—of FMLA intermittent leave.

The problem: Employees with chronic health problems often take FMLA leave in short increments of an hour or less.

The Department of Labor (DOL) took a big step to help minimize workplace disruptions due to unscheduled FMLA absences in its revised regulations, which took effect in 2009. The DOL says that, in most cases now, employees who take FMLA intermittent leave must follow their employers’ call-in procedures for reporting an absence, unless there are unusual circumstances.

Tracking Intermittent FMLA Leave

Even though managing FMLA intermittent leave can be vexing, the law does give employers some tools to combat leave abuse.

As with leave taken in one block, employees requesting FMLA intermittent leave must provide his or her employer with notice. Employees must give at least 30 days’ notice when their need for FMLA leave is foreseeable. When it’s not, they must notify you “as soon as practicable.”

A. Certify and schedule the leave.

Don’t accept FMLA requests at face value. The law gives employers the right to demand certification from the employee’s doctor of his or her need for leave. An employer can request new medical certification from the employee at the start of each FMLA year. The law also entitles an employer to ask for a second or third opinion, if necessary, before granting leave.

When employees have chronic conditions and their certifications call for FMLA intermittent leave, an employer should attempt to work out leave schedules as far in advance as possible. It’s legal to try to schedule FMLA-related absences, but an employer can’t deny them.

It’s important to immediately nail down the expected frequency and duration of FMLA intermittent leave. An employer can insist on a medical provider’s estimate of how often the employee will need time off. An employer also can wait until the provider gives an estimate to approve intermittent leave.

B. Intermittent Leave Tips.

  • Ask about the specific condition. Medical certification must relate only to the serious health condition that is causing the leave. An employer can’t ask about the employee’s general health or other conditions.
  • Allow 15 days to respond. After an employer requests certification, the employer should give employees at least 15 calendar days to submit the paperwork. If the employee’s medical certification is incomplete or insufficient, specify in writing what information is lacking and allow the employee seven days to cure the deficiency.
  • If an employer doubts the need for leave, it should investigate the certification. Under the updated FMLA regulations, the employer can contact the employee’s physician directly to clarify the medical certification. The employer’s contact person can be a health care provider, a human resources professional, a leave administrator (including third-party administrators) or a management official, but not the employee’s direct supervisor.
  • If an employer is still not convinced, it can require (and pay for) a second opinion. The employer should use an independent doctor who it selects, not a doctor who works for the employer. If the two opinions conflict, an employer can pay for a third and final, binding medical opinion.

Employees who take FMLA intermittent leave can wreak havoc with work schedules. Because their conditions can flare up at any time, their absences are by nature unpredictable. But there are ways you can legally curtail intermittent leave.

C. Use the Calendar-year Method.

Employees who take FMLA intermittent leave can wreak havoc with work schedules. Because their conditions can flare up at any time, their absences are by nature unpredictable. But there are ways you can legally curtail intermittent leave.

One way is to use the calendar-year method to set FMLA leave eligibility.

Here’s how it works. Sometime during the calendar year, an employee submits medical documentation showing she will need intermittent leave for a chronic condition. If she is eligible for leave at that time, she can take up to 12 weeks of intermittent leave until the end of the calendar year.

Then the process starts again.

If, on Jan. 1, she hasn’t worked 1,250 hours in the preceding 12 months, she’s no longer eligible—and won’t be eligible again until she hits 1,250 hours.

Final tip:  Employees who are approved for FMLA intermittent leave can take that time off as needed. But that doesn’t mean an employer isn’t entitled to some supporting documentation for each absence. An employer can ask for proof that the absence was for the chronic condition—but a simple doctor’s note to that effect should suffice. No new formal certification is required.

Wait until the end of your FMLA leave year to get the new intermittent-leave certification.

This is only a short primer on FMLA leave laws which can be a trap for the unwary employer. David Daniels the managing partner of the FMG Sacramento office. Please feel free to contact him at (916) 765-2570 ([email protected]) should you wish to further discuss the FMLA or any other areas of employment law at your convenience.

DOL Guidance Says Employers Cannot Exhaust Paid Leave Prior to Beginning Employee’s FMLA Leave

Posted on: March 18th, 2019

By: Brent Bean

The U.S. Department of Labor issued an opinion letter on March 14, 2019, re-affirming its view that employers must start the clock on an employee’s FMLA leave when the employer first learns the absence qualifies as a serious health condition under the FMLA.

The Opinion Letter specifically addressed the question of whether an employer can delay the designation of FMLA leave until after an employee first uses any paid leave the employee has accrued. Answering this question, the DOL emphasized that, once an employer has enough information to conclude that the leave is covered by the FMLA, it must designate such leave with 5 days. In issuing its answer, the DOL made clear that, even if an employee desires to delay the designation of FMLA leave so it can first use accrued paid leave, the employer is not permitted to do so.

Rather, as the Labor & Employment Group at FMG has long emphasized to our clients, if an employee has accrued paid leave, it should simply count any paid leave against the FMLA 12-week entitlement (in other words, simultaneous exhaustion of paid leave and FMLA leave). For instance, if an employee has 6 weeks of paid sick leave and wants to take 10 weeks of FMLA leave, the first 6 weeks of the FMLA leave will be paid and the remaining 4 weeks will be unpaid. When the employee returns from the 10 weeks of FMLA leave, the employee, having used his/her 6 weeks during FMLA leave, will have no more paid sick leave until the employee begins to accrue new paid sick leave time.

Not only does the DOL’s Opinion Letter reiterate that FMLA leave will always run from the date the employer learns the leave qualifies, it also clarifies the DOL’s position with respect to a 2014 Ninth Circuit opinion that permitted an employer to decline FMLA leave in favor of paid time off.  See Escriba v. Foster Poultry Farms, 743 F.3d 1236 (9th Cir., 2014).

In Escriba, the plaintiff requested leave to help her ill father in Guatemala. And when she asked for leave, she specifically requested that she be allowed to use vacation time instead of FMLA leave time for her trip. She then left for Guatemala but didn’t contact the company again until 16 days after she said she would return. When she returned, her employer notified her that it had terminated her as she had violated its three-day no-call, no-show rule. After she was fired, the plaintiff filed a lawsuit claiming FMLA interference, saying that informing her supervisors about her father’s illness should have triggered FMLA protection. The court held that the employee can delay the use of FMLA leave by opting instead to first use paid leave (even if the leave is related to an FMLA-qualifying condition).

The DOL Guidance provides that the rule in Escriba would no longer apply. Employers must designate FMLA leave once they have enough information to conclude the leave is covered and, if the employee desires to use some other form of paid leave, that leave would run concurrently.

If you have any questions or would like more information, please contact Brent Bean at [email protected].

DOL Guidance On No Fault Attendance Policies

Posted on: September 21st, 2018

By: Joyce Mocek

The Department of Labor (DOL) Wage and Hour Division issued a new opinion letter on an employer’s no-fault attendance policy which effectively froze an employee’s attendance points that had accrued prior to taking the FMLA leave.  The DOL maintained that the no-fault attendance policy did not violate the FMLA if it was applied in a non-discriminatory manner, and applied consistently with other types of leave.

The FMLA prohibits employers from “interfering with, restraining, or denying” an employee’s exercise of FMLA rights, and prohibits employers from “discriminating or retaliating against an employee.. for having exercised or attempted to exercise FMLA rights.”  29 CFR 825.220.  In its opinion letter, the DOL noted that employees cannot accrue points for taking FMLA leave under a no-fault attendance policy.  Further, the FMLA does not entitle an employee to superior benefits simply because they take FMLA leave.

In the opinion letter, the DOL advised that since the employee’s number of accrued points remained frozen during the FMLA leave the employee neither lost a benefit that accrued prior to taking the leave, nor accrued any additional benefit which he or she would not have been otherwise entitled.  The DOL thus advised that this policy would not violate the FMLA.  However, the DOL noted that if the employer counted other types of leave (i.e. active service) under its no-fault policy, then the employer may be discriminating against employees that take FMLA leave as this inconsistency would violate the FMLA.

Employers should be mindful of this recent DOL opinion letter guidance and review their no-fault attendance policy to ensure compliance and consistency with other leave policies.

If you have any questions or would like more information, please contact Joyce Mocek at [email protected].