FMLA Compliance Seminar TASC Confidentiality This Seminar and

FMLA Compliance Seminar

TASC Confidentiality • This Seminar and all materials presented are the property of TASC. No part of this seminar or any of the materials provided may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission from TASC. To the extent allowed by law, TASC intends to recoup any value lost by an unauthorized use or disclosure including the TASC profits that may have been lost or the profits made by the disclosing party. • IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that if any advice concerning one or more U. S. Federal tax issues is contained in this seminar material or is provided by a speaker at the seminar, such advice is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code; or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein, and you should seek advice based on your particular circumstances from an independent tax advisor.

FMLA Topics • • • FMLA Defined FMLA Eligibility FMLA Qualifying Events Understanding FMLA Employer Rights Types of Leave Continued Benefits Notification Requirements Records and Storage

FMLA Defined • Family Medical Leave Act of 1993 (FMLA) Enacted by Congress in 1993, the Family Medical Leave Act was a Federal Law intended to help employees better balance the demands of the workplace with the demands of their family and health. It has since been expanded to include Military caregiver leave, and leave for Military families during times of deployment to a foreign country.

What is FMLA? • Federal law applying to: – all public employers, elementary and secondary schools regardless of the number of employees and; – all private employers with over 50 employees on 20 or more weeks the previous or current calendar's year payroll • Requires employers to have a written policy • Requires employers have posted signage in a common area – $110. 00 per day fine possible for willful violations • Illegal to interfere, deny, or retaliate against an employee for utilizing FMLA rights.

FMLA Requirements • Employees have to give notice of an event to an employer – Employees don’t have to know what FMLA is, or use the words FMLA • Employers have 5 days from the date of notice to respond with – – Notice of Rights and Responsibilities Notice of Eligibility Request for Medical Certification Outline Return to Work Requirements

FMLA Requirements • Employee has 15 days to provide medical certification • Employer has 5 days from the date medical is received to send Designation notice to the employee • Employers must have record of what days and times are FMLA protected and retain these records for 3 years

Record Retention • DOL and FMLA regulations require that the following records be stored for 3 years – Basic payroll and identifying employee data, including name, address, occupation, rate of pay, terms of compensation, daily hours worked, deductions from wages and total compensation paid – Dates FMLA leave is taken by FMLA eligible employees – Hours of the leaves if not full days – Copies of all notices – Any documents describing employee benefits or employer policies regarding the taking of paid or unpaid leave

FMLA Employee Eligibility • Employee must have 12 months of service, and also needs 1250 hours worked in the 12 months preceding their need for Leave. – 12 months does not have to be consecutive, 1250 hours does have to be in past 12 months. – Work at a location where there are 50 employees of the employer within a 75 mile radius – Former employees are also covered and are able to bring lawsuits (not re-hired due to past record) up to seven years.

FMLA Qualifying Events • Serious health condition for employee – Serious health condition has it’s own definition under the FMLA regulations • Birth of a child – Also covers Fathers for paternity leave • Placement of a child for Adoption or foster care • Serious health condition of a family member – Family Member is defined as only parents, spouses, and children under 18. Children over 18 have to meet additional requirements • Qualified Exigency – For employees with deployed family members • Caring for Military Personnel* *26 week events

Definition: Serious Health Condition 1. Conditions requiring an overnight stay in a hospital or other medical care facility; or 2. Conditions that incapacitate employee or family member (for example, unable to work or attend school) for more than 3 consecutive days and have ongoing medical treatment (either multiple appointments with a health care provider, or a single appointment and follow-up care such as prescription medication); or 3. Chronic conditions that cause occasional periods for employee or family member are incapacitated and require treatment by a health care provider at least twice a year; or 4. Pregnancy (including prenatal medical appointments, incapacity due to morning sickness, and medically required bed rest).

Definition: Serious Health Condition. Adult Child over 18 • On January 14, 2013 the Department of Labor issued additional guidance clarifying the criterion for a child over age 18 to qualify for care under FMLA. • This clarification is in response to the Americans with Disability Act (ADA) being amended by the ADAAA (Americans with Disability Act Amendments Act of 2008) to expand the definition of disability. • Children over the age of 18 must be: – – – Disabled according to ADAAA Have a serious health condition Incapable of self-care Need care for that condition Age the child became disabled doesn’t matter for FMLA Service member leave doesn’t limit an employee’s leave entitlement to care for a child up to age 27

FMLA Regulatory Changes Effective March 8, 2013 • Changes to Military Family Leave (a partial listing) – Expanding caregiver leave to include care for veterans discharged within the – – past five years. Allowing caregiver leave for a pre-existing injury or illness that was aggravated in the line of duty. Extending exigency leave to family members of those serving in the Regular Armed Forces. Requiring that service members be deployed to a foreign country in order for their family members to qualify for exigency leave. Extending from 5 to 15 days employee leave during a military family member’s “rest and recuperation” period. • Additional Changes (a partial listing) – Enforcement of using lowest payroll method for FMLA calculations. – Revisions regarding (a) the physical impossibility of a return to work in the middle of a shift (FY), (b) 2010 National Defense Authorization Act (NDAA) amendments, and (c) the Airline Flight Crew Technical Corrections Act (AFCTCA).

FMLA Regulatory Changes Effective March 8, 2013 (cont’d) • What do Employers Need to do? – Update applicable posters. Updated versions of the Federal poster can be located here: http: //www. dol. gov/whd/regs/compliance/posters/fmlaen. pdf – Update written policies to include the changes to the NDAA and AFCTCA amendments. A Frequently Asked Questions listing can be found here: http: //www. dol. gov/whd/fmla/2013 rule/military. FR_FAQs. htm – Educate managers to ensure they understand the additional FMLA qualifying events related to the expanded definitions.

Types of Leave • Continuous: Taken in one block of time • Intermittent: Taken in separate blocks of time as needed – Can take in smallest increment of time used by payroll. – May have incapacitations lasting up to a month. – May be a reduction of hours, such as no OT or reduced schedule. – Special rules apply to employees of local education agencies. • Generally, these rules apply to intermittent leave or when leave near the end of a school term.

Special Rules for School Instructional Employees • Leave taken for a period that ends with the school year and begins the next semester is leave taken consecutively rather than intermittently. – The period during the summer vacation when the employee would not have been required to report for duty is not counted against the employee's FMLA leave entitlement. – An instructional employee who is on FMLA leave at the end of the school year must be provided with any benefits over the summer vacation that employees would normally receive if they had been working at the end of the school year. • Rules apply only to a leave involving more than 20 percent of the working days during the period over which the leave extends. • Employees taking leave which constitutes 20 percent or less of the working days during the leave period would not be subject to transfer to an alternative position.

Understanding FMLA • Employer Defined: “. . . any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer. . . ” 20 U. S. C. § 2611(4)(ii). An “employer” also includes any “public agency”. • So what does that mean? – Supervisors can be personally liable for violations of FMLA. • A recent Chicago verdict set a record $11. 65 Million dollar verdict, with $400, 000. 00 levied against two supervisors individually

ERISA Violations - Related to FMLA • ANCHORAGE, Alaska – 2 -2013 The U. S. Department of Labor and ASRC Energy Services Alaska Inc. have agreed to a consent judgment in federal court that will result in the payment of $43, 000 in back wages for an employee who was allegedly terminated in violation of the Family and Medical Leave Act. The judgment also permanently enjoins the defendants from future violations of the FMLA. – The judgment and order resolve a lawsuit filed by the department in the U. S. District Court of the District of Alaska after an investigation by the Seattle District Office of the department’s Wage and Hour Division. The investigation found that the employee was terminated while he was on leave for a serious health condition, in violation of the FMLA. – “For more than two decades, the FMLA’s job-protected leave entitlements have served as a critical safety net for our nation’s workers and families. This law continues to help achieve a healthy, productive balance between the demands of work and family life, ” said Donna Hart, director of the Wage and Hour Division’s Seattle District Office. “This judgment demonstrates the department’s commitment to ensuring employees receive all of the protections to which they are entitled under the FMLA, and to helping employers understand comply with the law. ” – The division found that the employer incorrectly counted against the employee’s FMLA leave entitlement weeks that he was not scheduled to be at work and terminated him for exceeding the approved amount of leave. If an employee is not scheduled to report for work, that time period is not leave and, therefore, may not count against the employee’s 12 -week FMLA leave entitlement. Investigators determined that the employer failed to comply with this requirement.

ERISA Violations - Related to FMLA (2) • Recent Violations Houston, TX • December 11, 2013 -Houston Ear, Nose & Throat Clinic required to pay more than $17, 000 in back wages following US Labor Department investigation. – The investigation found that the company violated the FMLA when an eligible employee returning to work, after taking FMLA leave, was not placed in the same full-time position held prior to using the job-protected leave. Instead, the employee was placed in a part-time position which resulted in fewer working hours and without the same benefits held before taking FMLA leave. Under the FMLA, an employee returning to work from FMLA leave is entitled to job restoration to the same or an equivalent position with the same pay, benefits and other employment terms and conditions. This violation resulted in $17, 390 in back wages, medical expenses and unpaid monetary benefits due to the employee. – – “No employee should have to worry about their job when facing a serious health condition, ” said Cynthia Watson, regional administrator for the Wage and Hour Division in the Southwest. “Coming back to work with the same seniority and benefits following an FMLA-related absence is not an option, it is the law. This employee’s reinstatement and subsequent collection of back wages should send a clear message to other employers that compliance with the FMLA is critical. ” The employer was charged with several additional FMLA violations, including failing to provide the employee with the required notice designating the leave as FMLA; failing to keep the proper records required by FMLA; and failing to have a current FMLA policy reflecting the most recent provisions of the law. The employer agreed to reinstate the employee to the previously held full-time position with the same pay rate and benefits; pay all the back wages due; ensure that all eligible employees taking FMLA leave are properly provided with the required notices; maintain the necessary records; update its written FMLA policy; and conduct FMLA training with its managers.

ERISA Violations - Related to FMLA (2) • Knoxville, TN October 8, 2013 - Motel 6 agrees to pay nearly $52, 000 in back wages and to comply with the FMLA following US Department of Labor investigation – – – “A typical violation in the hotel and motel industry is the failure to pay required overtime premiums, ” said Nettie Lewis, district director of the Wage and Hour Division’s Nashville District Office. “These employees have worked long hours. As a result of our investigation, they are being paid the wages they have earned and now know the benefits and protections of the FMLA. We encourage other hotel and motel employers to learn from this case, review their practices and make a diligent effort to limit future liability by complying with the FLSA and FMLA. ” An investigation conducted by the Division’s Nashville District Office disclosed that employees regularly worked more than 40 hours a week, but were only paid straight-time wages for all hours worked. The FLSA requires that workers be paid time and one-half their regular rates of pay for all overtime hours worked. The employer failed to post required FMLA posters in an area visible to workers and did not provide information about the FMLA in the company’s handbook, in violation of FMLA requirements. The Wage and Hour Division has noticed the noncompliance in this industry and is concentrating its resources on investigating and remedying violations, informing workers of their rights and providing compliance assistance to employers. Since 2009, the division has concluded nearly 5, 000 cases involving hotel and motel employers, resulting in more than $15. 1 million in back wages and FMLA violations for more than 28, 000 workers nationwide.

WHD Budget 2014

WHD Budget 2015

WHD investigations • Last year, the WHD received more than 2, 100 complaints alleging violations of the Family and Medical Leave Act (FMLA), and its investigations concluded that violations occurred in about half of those cases. The most common violations involved employers refusing to grant FMLA leave, illegally terminating employees who requested leave, and discriminating against employees who requested leave.

Employer Rights • Expect 30 -day notice for planned absences and notice within 2 days of an unplanned event. • May require certification of condition from employee as frequently as every 30 days. • May insist on a second opinion. • May choose to require that paid time be used before unpaid time off is granted. • Employer is not liable for FMLA violation if the employee is not providing notice of the need for leave. Employee does not have to use the term FMLA for the employer to be obligated to recognize the event as a qualifying event under FMLA.

Continued Benefits • Employees accrued benefits are retained while on Leave: – – – Health insurance - mandatory Life insurance - if accrued Disability - if accrued Sick leave - if accrued Pensions - if accrued • Benefits must be in force while Leave commences. • Employee responsible premiums may still be requested while on Leave. • May recover employer share of premiums if employee does not return from Leave.

FMLA Cost Association • Productivity – Leaves disrupt work routines and may cause confusion and distraction. Replacement workers and overtime wages may be required. – Extensive supervisor training is necessary. – Managers must consider FMLA absences separately from other performance issues. • Legal – State Leave laws are numerous and change often, requiring constant monitoring. – Managers can be held personally responsible for violations. – Litigation can cost $100 K - $200 K per claim, not including settlement costs. • Tracking & Administration – Records maintenance and storage, supplies, staff time may duplicate management of other benefits such as disability and workers’ compensation. – HR is diverted from more strategic responsibilities.

Why Outsource FMLA? • Outsourced FMLA Administration is: – Consistent – Efficient and accurate – Compliant – a reduction in your company liability and manger and supervisor liability – Centralized • Positive Work Culture – – Greater employee attraction and retention Reduces workload for HR professionals Monitors potential FMLA abuse by employees Increasing employee comfort related to FMLA requests by removing PHI from HR staff

Outsourcing Advantage • Limit your risk • Reduce your workload • Distance your company from the personal aspect of FMLA administration • Increase your Bottom Line & Peace of Mind!

FMLA Employee & Employer Responsibilities

Compliance Solutions

Why FMLAMatters? • • • Consultative session to review LOA policies 24/7 online FMLA activity reports Provides all FMLA notices Documentation of all communications Provides storage and processing of medical certification for FMLA Hold-harmless language installed in our service agreement Health and legal professionals on retainer Toll-free and online Leave request options Staff trained on Federal and State Leave laws Provides policy review to ensure compliance Provides management and supervisory training in event identification and reporting • Account management team for superior service

Service Features • • • Complete compliance with FMLA state and federal regulations. Complete tracking of employee Leave. Fair application of FMLA regulations and policies. Eligibility determination available. Centralized and accurate record keeping. Access to experienced employee benefits professionals. Training for supervisors and managers on company procedures and FMLA state and federal regulations. Full review of FMLA eligibility and entitlement. FMLAMatters Administrative Manual. FMLA activity reports. Immediate denial notification.

Administrative Services • Multiple methods to report an FMLA event: – Telephone – Employer On-line – Employee On-line (when eligibility is determined with TASC) • FMLAMatters assumes the responsibility and liability associated with FMLA Leave request by: – Training management on recognition and process – Determinations: Eligibility and Entitlement – Performing day-to-day administration and support We deliver company compliance with a hold-harmless guarantee.

Thank You!