“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.