Archive for August, 2017

When does 1 + 1 = 1? . . . Joint Employer Coverage under the FMLA.

Think back a couple of posts ago to when we talked about a covered employer under the FMLA. I told you then that generally a single entity will be considered the employer under the FMLA unless it meets the joint employer test at § 825.106.  I also said we would talk about joint employers in a couple of weeks.  It has been a couple of weeks.

What, you say, is a joint employer?

(a) Where two or more businesses exercise some control over the work or working conditions of the employee, the businesses may be joint employers under FMLA. Joint employers may be separate and distinct entities with separate owners, managers, and facilities. Where the employee performs work which simultaneously benefits two or more employers, or works for two or more employers at different times during the workweek, a joint employment relationship generally will be considered to exist in situations such as:

(1) Where there is an arrangement between employers to share an employee’s services or to interchange employees;

(2) Where one employer acts directly or indirectly in the interest of the other employer in relation to the employee; or,

(3) Where the employers are not completely disassociated with respect to the employee’s employment and may be deemed to share control of the employee, directly or indirectly, because one employer controls, is controlled by, or is under common control with the other employer.

29 CFR §825.106(a).

Now we are going to cut right through all of the mumbo jumbo and get right to the meat of the matter, because the most common joint employer relationship occurs when you retain a temporary employment agency to provide you with temporary employees.  Not a PEO, mind you, or a vendor or contractor that provides so-called turnkey services, but a real live temporary agency.

First thing you need to know is this:  You have to count your temps when determining if you have 50 employees and are a covered employer.   That’s right, temps count, for both you and the temporary agency.

(d) Employees jointly employed by two employers must be counted by both employers, whether or not maintained on one of the employer’s payroll, in determining employer coverage and employee eligibility. For example, an employer who jointly employs 15 workers from a temporary placement agency and 40 permanent workers is covered by FMLA.

29 CFR §825.106(d).

Here is the second thing you need to know.  The temp agency has to give all the required notices and do the paperwork and provide the leave and maintain benefits.  (All things we will talk about later.)

(c) In joint employment relationships, only the primary employer is responsible for giving required notices to its employees, providing FMLA leave, and maintenance of health benefits. Factors considered in determining which is the primary employer include authority/responsibility to hire and fire, assign/place the employee, make payroll, and provide employment benefits. For employees of temporary placement agencies, for example, the placement agency most commonly would be the primary employer.

29 CFR §825.106(c).

Now you may be thinking that is great, nothing for me to do and you would be wrong.  Less for you to do, but not nothing.  You have to give the temp their job with you back when they are ready to come back from leave.

(e) Job restoration is the primary responsibility of the primary employer. The secondary employer is responsible for accepting the employee returning from FMLA leave in place of the replacement employee if the secondary employer continues to utilize an employee from the temporary placement agency, and the agency chooses to place the employee with the secondary employer. A secondary employer is also responsible for compliance with the prohibited acts provisions with respect to its jointly employed employees, whether or not the secondary employer is covered by FMLA. See §825.220(a). The prohibited acts include prohibitions against interfering with an employee’s attempt to exercise rights under the Act, or discharging or discriminating against an employee for opposing a practice which is unlawful under FMLA. A covered secondary employer will be responsible for compliance with all the provisions of the FMLA with respect to its regular, permanent workforce.

29 CFR §825.106(e).

And that, my friend, is what a joint employer is – now you know.

“One, Two, Buckle my Shoe. . . .” Counting Employees under the FMLA

Last time we talked about who was a “covered employer” .  You remember:

(a) An employer covered by FMLA is any person engaged in commerce or in any industry or activity affecting commerce, who employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year.

29 CFR §825.104(a).

And we talked about who a person was and what a single integrated employer was and what interstate commerce meant.  But we left something out.  What about the 50 employee thing?  You know . . . “who employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year.”  Id.

OK, there is a Reg for this too, but you knew that already or I would not be writing about it, right?

29 CFR §825.105 deals with counting employees.  Which is much like counting sheep only it is way more confusing and will put you to sleep much faster.  We have to start with “employ” – what does that mean?  Well, same meaning as under the FLSA.  You can see it here, but to avoid a “click”

By statutory definition the term ‘employ’ includes (section 3(g)) ‘to suffer or permit to work’.  The act, however, contains no definition of ‘work’.  Section 3(o) of the Fair Labor Standards Act contains a partial definition of ‘hours worked’ in the form of a limited exception for clothes-changing and wash-up time.

29 CFR § 785.6.

Helpful, don’t you think?  Look at it this way – it is basically anybody you pay to work for you that is not an independent contractor.  And we all know that virtually no one qualifies as an independent contractor anymore, right?  So when are you “employing” someone?  How about when:

(a) The definition of employ for purposes of FMLA is taken from the Fair Labor Standards Act, §3(g), 29 U.S.C. 203(g). The courts have made it clear that the employment relationship under the FLSA is broader than the traditional common law concept of master and servant. The difference between the employment relationship under the FLSA and that under the common law arises from the fact that the term ‘employ’ as defined in the Act includes ‘to suffer or permit to work.’ The courts have indicated that, while ‘to permit’ requires a more positive action than ‘to suffer,’ both terms imply much less positive action than required by the common law. Mere knowledge by an employer of work done for the employer by another is sufficient to create the employment relationship under the Act.

29 CFR §825.105(a).

That’s right – if you know someone is doing work for you, that is enough to create an employment relationship under that Act.  But we need more than that, so the DOL gives us more:

(b) Any employee whose name appears on the employer’s payroll will be considered employed each working day of the calendar week, and must be counted whether or not any compensation is received for the week.

29 CFR §825.105(b).

So any employee on the payroll is covered, right?  Well sort of, but only in the good old USA (or its territories).  Not employees who are employed in a foreign country.  Employees in Canada?  Don’t count.  Employees in Mexico?  Don’t count.  Employees in China?  Don’t count.  (And this does not mean employees on a business trip, they still count, presumably they are on the US payroll.)

But what about employees who are on the payroll but are not working?  Someone, say, on a leave of absence?  Yes, they count too, assuming that they have a reasonable expectation of coming back to work.

(c) Employees on paid or unpaid leave, including FMLA leave, leaves of absence, disciplinary suspension, etc., are counted as long as the employer has a reasonable expectation that the employee will later return to active employment. If there is no employer/employee relationship (as when an employee is laid off, whether temporarily or permanently) such individual is not counted. Part-time employees, like full-time employees, are considered to be employed each working day of the calendar week, as long as they are maintained on the payroll.

29 CFR §825.105(c).

And then there is this whole “each working day of the calendar week thing.”  What is that all about?  Well, section (b) really takes care of that when it tells us that any employee on the payroll will be considered to have employed “each working day of the calendar week and must be counted whether or not any compensation is received for the week.”  With one exception – of course, there is always an exception:

(d) An employee who does not begin to work for an employer until after the first working day of a calendar week, or who terminates employment before the last working day of a calendar week, is not considered employed on each working day of that calendar week.

29 CFR §825.105(d).

And that gets us to the heart of the matter:

(e) A private employer is covered if it maintained 50 or more employees on the payroll during 20 or more calendar workweeks (not necessarily consecutive workweeks) in either the current or the preceding calendar year.

29 CFR §825.105(e).  Man, all the way to (e) before we actually got to the count.

So what does all of this mean?  When am I actually a covered employer?  Let’s say today I have 49 employees and tomorrow number 50 starts, am I covered?  NO!  You have to have 50 for 20 or more workweeks in the current or preceding year.  So once you get to 50 you won’t actually be a covered employee until you have 50 for 20 or more weeks.  Now, weeks do not need to be consecutive, so if you have 50 for 10 weeks and then someone quits and you are down to 49 for 5 weeks and then you hire one more and you are back to 50, once you get back to 50 for 10 more weeks (and assuming the year has not changed) you are covered.

And once you are covered, you are going to be covered for a while:

(f) Once a private employer meets the 50 employees/20 workweeks threshold, the employer remains covered until it reaches a future point where it no longer has employed 50 employees for 20 (nonconsecutive) workweeks in the current and preceding calendar year. For example, if an employer who met the 50 employees/20 workweeks test in the calendar year as of September 1, 2008, subsequently dropped below 50 employees before the end of 2008 and continued to employ fewer than 50 employees in all workweeks throughout calendar year 2009, the employer would continue to be covered throughout calendar year 2009 because it met the coverage criteria for 20 workweeks of the preceding (i.e., 2008) calendar year.

29 CFR §825.105(e).

Clear?  As mud, right?  See you next time.

What does it all mean and who does it mean it for? Part 1 – A Covered Employer Under the FMLA.

Last week we started with the first of the FMLA Regulations.  Today you are going to skip down the Regulations a bit.  Skip already, you say?  Yes, but relax, it’s not really anything that’s important and the important stuff we will come back to.  We started with 29 CFR §825.100 which just explains what the FMLA is in broad terms.  We are going to skip 101 which is the “Purpose of the Act”, 102 which are the definitions, and 103 which is nothing, it’s reserved.  Why are we skipping the definitions?  We aren’t really, we will come back to them as we need them.   So that gets us to 29 CFR §825.104, Covered Employer.

So who is covered by the FMLA?

(a) An employer covered by FMLA is any person engaged in commerce or in any industry or activity affecting commerce, who employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year.

29 CFR §825.104(a).

That seems pretty simple, doesn’t it?  If you, and by you I mean a “person”, are a “person” who engages in interstate commerce or an activity affecting commerce and you employ 50 or more employees for each working day for 20 or more calendar workweeks either this year or last, you are a “covered employer.”

So who, or what rather, is a “person”?  Simple – a person is what a person always is under the law:

Person means an individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons, and includes a public agency for purposes of this part.

29 CFR §825.102.  (See, I told you we would get back to the definitions.)

It also means any person acting in the interest of an employer.  So corporate officers may be a “person” for purposes of the FMLA.  See § 825.104(d).

And interstate commerce is just as simple.   The FMLA uses the NLRA’s definition of interstate commerce:

Commerce and industry or activity affecting commerce mean any activity, business, or industry in commerce or in which a labor dispute would hinder or obstruct commerce or the free flow of commerce, and include ‘commerce’ and any ‘industry affecting commerce’ as defined in sections 501(1) and 501(3) of the Labor Management Relations Act of 1947, 29 U.S.C. 142(1) and (3).

29 CFR §§ 825.104(b) and 102.

Now generally, a single entity will be considered the employer under the FMLA.  For example, a corporation that employs employees will be considered the employer and not the various divisions or establishments of the corporation.  See § 825.104(c).  And where one corporation owns another corporation it is generally a separate employer unless it meets the joint employer test at § 825.106 (which we will talk about in a couple of weeks) or the integrated employer test that we will talk about now.  See § 825.104(c)(1).

Sometimes two or more entities might be considered a single integrated entity for determining who the employer is.  That way a really crafty “person” can’t set up, say, 5 different LLCs and have each of them have, say, 25 employees so that none of them are covered by the FMLA.  When that happens the DOL might just call those 5 different LLCs a “single integrated employer.”

(2) Separate entities will be deemed to be parts of a single employer for purposes of FMLA if they meet the integrated employer test. Where this test is met, the employees of all entities making up the integrated employer will be counted in determining employer coverage and employee eligibility. A determination of whether or not separate entities are an integrated employer is not determined by the application of any single criterion, but rather the entire relationship is to be reviewed in its totality. Factors considered in determining whether two or more entities are an integrated employer include:

(i) Common management;

(ii) Interrelation between operations;

(iii) Centralized control of labor relations; and

(iv) Degree of common ownership/financial control.

29 CFR §825.104(c)(2).  If one or more of those things is present, then two nominally separate entities might just be considered a single employer under the FMLA.

Pretty straight forward.  That is a covered employer under the FMLA.  Got 50 employees?  You are going to want to keep reading as we go along then.

It’s Time to Start Over Again . . . Again. . . The FMLA Edition.

So once again I have been terribly negligent in keeping up on this blog.  In fact I have not posted since . . . man, since November of last year.  My only excuse is I have been a bit busy.  And busy is good, but it does mean the old blog has been neglected.  So I am going to go back to what we did before.  We will start another series on another statute.  This time I think we will focus on the Family and Medical Leave Act.  I don’t know about you, but I can use a bit of a refresher.  And we are going to do it the same way we did the FLSA series, using the Regulations as our road map.  So here we go . . .

A little bit of history to start.  For those of you that don’t know, the Family and Medical Leave Act (or as we are going to call it, the FMLA) was enacted by the 103rd Congress and signed into law by President Clinton on February 5, 1993.  That is right about the time I was just getting into this law thing (actually I graduated from law school in 1992 for those of you that are interested).  The FMLA is administered by our old friend the Wage and Hour Division of the United States Department of Labor.  Recognizing the increased number of single parent households and households in which both parents work, the purpose of the FMLA is “to balance the demands of the workplace with the needs of families to promote the stability and economic security of families, and to promote national interests in preserving family integrity.” See https://www.dol.gov/whd/regs/statutes/fmla.htm#SEC_2_FINDINGS_AND_PURPOSES

So what does it do?

(a) The Family and Medical Leave Act of 1993, as amended, (FMLA or Act) allows eligible employees of a covered employer to take job-protected, unpaid leave, or to substitute appropriate paid leave if the employee has earned or accrued it, for up to a total of 12 workweeks in any 12 months (see §825.200(b)) because of the birth of a child and to care for the newborn child, because of the placement of a child with the employee for adoption or foster care, because the employee is needed to care for a family member (child, spouse, or parent) with a serious health condition, because the employee’s own serious health condition makes the employee unable to perform the functions of his or her job, or because of any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a military member on active duty or call to covered active duty status (or has been notified of an impending call or order to covered active duty). In addition, eligible employees of a covered employer may take job-protected, unpaid leave, or substitute appropriate paid leave if the employee has earned or accrued it, for up to a total of 26 workweeks in a single 12-month period to care for a covered servicemember with a serious injury or illness. In certain cases, FMLA leave may be taken on an intermittent basis rather than all at once, or the employee may work a part-time schedule.

29 CFR §825.100

Now that is a lot of stuff!  “Eligible employees” and “covered employers” and “workweeks” and “serious health conditions” and “ qualifying exigencies.”  And next time we will start digging into what all that means.

For the two of you that still read this thing, thanks for sticking with me.  See you next time, and it won’t be 9 months, I promise.