What does it all mean and who does it mean it for? An Eligible Employee under the FMLA, Part 4.

Last time we talked about the 50 employee within 75 mile test for eligibility under the FMLA.  We are going to talk about it again.  This time we are going to discuss how you determine if the employee who is requesting leave actually works within 75 miles of 49 other employees.  Let’s start with how we determine what the worksite is.  Some of this is just plain common sense and some of it probably does not apply to you, but the Department of Labor took the time to write these Regulations so we should probably at least take the time to read them.

Let’s start with the general rule:

(a) Generally, a worksite can refer to either a single location or a group of contiguous locations. Structures which form a campus or industrial park, or separate facilities in proximity with one another, may be considered a single site of employment. On the other hand, there may be several single sites of employment within a single building, such as an office building, if separate employers conduct activities within the building. For example, an office building with 50 different businesses as tenants will contain 50 sites of employment. The offices of each employer will be considered separate sites of employment for purposes of FMLA. An employee’s worksite under FMLA will ordinarily be the site the employee reports to or, if none, from which the employee’s work is assigned.

29 CFR §825.111(a).

So that makes sense, right?  A big building in New York or Chicago that has a bunch of tenants can be a worksite for all of those tenants.  It is really the last sentence of that section that matters, right?  “An employee’s worksite under FMLA will ordinarily be the site the employee reports to or, if none, from which the employee’s work is assigned.”  So what if we have a big campus with a bunch of buildings on it?  Well, that is a single site of employment too:

(1) Separate buildings or areas which are not directly connected or in immediate proximity are a single worksite if they are in reasonable geographic proximity, are used for the same purpose, and share the same staff and equipment. For example, if an employer manages a number of warehouses in a metropolitan area but regularly shifts or rotates the same employees from one building to another, the multiple warehouses would be a single worksite.

29 CFR §825.111(a)(1).

And that makes sense too, right?  But what if the employee does not have a fixed site of employment?  What if it is a salesperson or a truck driver?  We have a Regulation for that too:

(2) For employees with no fixed worksite, e.g., construction workers, transportation workers (e.g., truck drivers, seamen, pilots), salespersons, etc., the worksite is the site to which they are assigned as their home base, from which their work is assigned, or to which they report. For example, if a construction company headquartered in New Jersey opened a construction site in Ohio, and set up a mobile trailer on the construction site as the company’s on-site office, the construction site in Ohio would be the worksite for any employees hired locally who report to the mobile trailer/company office daily for work assignments, etc. If that construction company also sent personnel such as job superintendents, foremen, engineers, an office manager, etc., from New Jersey to the job site in Ohio, those workers sent from New Jersey continue to have the headquarters in New Jersey as their worksite. The workers who have New Jersey as their worksite would not be counted in determining eligibility of employees whose home base is the Ohio worksite, but would be counted in determining eligibility of employees whose home base is New Jersey. For transportation employees, their worksite is the terminal to which they are assigned, report for work, depart, and return after completion of a work assignment. For example, an airline pilot may work for an airline with headquarters in New York, but the pilot regularly reports for duty and originates or begins flights from the company’s facilities located in an airport in Chicago and returns to Chicago at the completion of one or more flights to go off duty. The pilot’s worksite is the facility in Chicago. An employee’s personal residence is not a worksite in the case of employees, such as salespersons, who travel a sales territory and who generally leave to work and return from work to their personal residence, or employees who work at home, as under the concept of flexiplace or telecommuting. Rather, their worksite is the office to which they report and from which assignments are made.

29 CFR §825.111(a)(2).

Now that section has a lot of stuff in it, so let’s break it down a bit.  First, if the employee does not have a fixed site, for example our truck driver, then their site of employment is “the site to which they are assigned as their home base, from which their work is assigned, or to which they report.”  Not necessarily the company headquarters then.

What about our salesperson?  Is home their worksite?  No, it is not.  According to this Regulation, “An employee’s personal residence is not a worksite in the case of employees, such as salespersons, who travel a sales territory and who generally leave to work and return from work to their personal residence, or employees who work at home, as under the concept of flexiplace or telecommuting. Rather, their worksite is the office to which they report and from which assignments are made.”  And the same is true for people who work from home.

With all of that in mind, how do we measure the 75 miles?  As the crow flies?  Nope, not unless you are a crow (or you can’t drive to work).  It is highway miles, when you drive.

(b) The 75-mile distance is measured by surface miles, using surface transportation over public streets, roads, highways and waterways, by the shortest route from the facility where the employee needing leave is employed. Absent available surface transportation between worksites, the distance is measured by using the most frequently utilized mode of transportation (e.g., airline miles).

29 CFR §825.111(b).

And the determination is made based on the number of employees that you have on the payroll, not by the number of employees that happen to be at work on the day the employee asks for leave.

(c) The determination of how many employees are employed within 75 miles of the worksite of an employee is based on the number of employees maintained on the payroll. Employees of educational institutions who are employed permanently or who are under contract are maintained on the payroll during any portion of the year when school is not in session.  See §825.105(c).

29 CFR §825.111(c).

And one last thing.  What about temps?  You know, co-employees?  What is their worksite?  Well, in that case the worksite is the primary employer’s site, not the secondary employer’s, but the employee counts for both employers for determining if they have 50 employees.

(3) For purposes of determining that employee’s eligibility, when an employee is jointly employed by two or more employers (see §825.106), the employee’s worksite is the primary employer’s office from which the employee is assigned or reports, unless the employee has physically worked for at least one year at a facility of a secondary employer, in which case the employee’s worksite is that location. The employee is also counted by the secondary employer to determine eligibility for the secondary employer’s full-time or permanent employees.

29 CFR §825.111(a)(3).

Well, that is enough of that.  Next time, why an employee can take a leave.

What does it all mean and who does it mean it for? An Eligible Employee under the FMLA, Part 3.

So for the last couple of weeks we have talked about the 12 month and 1,250 hour rules to determine if an employee is eligible for leave.  Now let’s talk about the third and often overlooked eligibility requirement, the 50 employee test.  Remember:

(a) An eligible employee is an employee of a covered employer who:

(1) Has been employed by the employer for at least 12 months, and

(2) Has been employed for at least 1,250 hours of service during the 12-month period immediately preceding the commencement of the leave (see §825.801 for special hours of service requirements for airline flight crew employees), and

(3) Is employed at a worksite where 50 or more employees are employed by the employer within 75 miles of that worksite. See §825.105(b) regarding employees who work outside the U.S.

29 CFR §825.110(a).

(e) Whether 50 employees are employed within 75 miles to ascertain an employee’s eligibility for FMLA benefits is determined when the employee gives notice of the need for leave. Whether the leave is to be taken at one time or on an intermittent or reduced leave schedule basis, once an employee is determined eligible in response to that notice of the need for leave, the employee’s eligibility is not affected by any subsequent change in the number of employees employed at or within 75 miles of the employee’s worksite, for that specific notice of the need for leave. Similarly, an employer may not terminate employee leave that has already started if the employee count drops below 50. For example, if an employer employs 60 employees in August, but expects that the number of employees will drop to 40 in December, the employer must grant FMLA benefits to an otherwise eligible employee who gives notice of the need for leave in August for a period of leave to begin in December.

29 CFR §825.110(e).

So here, eligibility is determined at the time the employee gives notice of the need for the leave.  And again, if the employee is eligible when they give notice of the need for leave, they are eligible for the duration of the leave, even if the number of employees at a specific location changes.  Makes sense, right?  That keeps sneaky employers from transferring or laying off employees to avoid having to give someone leave.  Nobody would do that, right?  Similarly, you can’t stop a leave once it starts just because the number of employees within 75 miles drops below 50.  And again, remember all of this counting occurs when the employee “gives notice of the need for leave”.

What does it all mean and who does it mean it for? An Eligible Employee under the FMLA, Part 2.

Last time we talked about the 12 month rule for determining an eligible employee.  This time let’s talk about the 1,250 hour rule.  You remember, to be eligible you have to have worked for the employer for 12 months and you have to have worked at least 1,250 hours in the last 12 months.  (And if you are reading ahead don’t forget the 50 employee test).

Ok, so let’s start with what we count:

(c)(1) . . .  whether an employee has worked the minimum 1,250 hours of service is determined according to the principles established under the Fair Labor Standards Act (FLSA) for determining compensable hours of work. See 29 CFR part 785. The determining factor is the number of hours an employee has worked for the employer within the meaning of the FLSA. The determination is not limited by methods of recordkeeping, or by compensation agreements that do not accurately reflect all of the hours an employee has worked for or been in service to the employer. Any accurate accounting of actual hours worked under FLSA’s principles may be used.

29 CFR §825.110(c)(1).

So that is easy enough, an hour worked for FLSA purposes is an hour worked for FMLA purposes.  And an hour worked for FLSA purposes is?  I’m not going to go through it all here.  But you can read about it here.  Another thing to keep in mind is that an employee who is off doing military duty and who is covered by USERRA gets credit for hours they would have worked while they were on USERRA covered leave.  29 CFR §825.110(c)(2).

And what about if we don’t have records of how many hours the employee worked?  Well, if the employee is non-exempt under the FLSA, you are required to keep time records, so shame on you if you don’t.  But what about exempt employees?  We don’t have to keep time records for exempt employees, what do we do with them?

(3) In the event an employer does not maintain an accurate record of hours worked by an employee, including for employees who are exempt from FLSA’s requirement that a record be kept of their hours worked (e.g., bona fide executive, administrative, and professional employees as defined in FLSA Regulations, 29 CFR part 541), the employer has the burden of showing that the employee has not worked the requisite hours. An employer must be able to clearly demonstrate, for example, that full-time teachers (see §825.102 for definition) of an elementary or secondary school system, or institution of higher education, or other educational establishment or institution (who often work outside the classroom or at their homes) did not work 1,250 hours during the previous 12 months in order to claim that the teachers are not eligible for FMLA leave. See §825.801(d) for special rules applicable to airline flight crew employees.

29 CFR §825.110(c)(3).

That’s right, in the case of an exempt employee the assumption is that if they have worked the last year for you then they have worked 1,250 hours in that year (or ¾ of a year even, because remember, a work year is 2,080 hours) and if you want to contest that, the burden falls on you to show that they have not worked that time.

And to wrap these last 2 posts up:

(d) The determination of whether an employee meets the hours of service requirement and has been employed by the employer for a total of at least 12 months must be made as of the date the FMLA leave is to start. An employee may be on non-FMLA leave at the time he or she meets the 12-month eligibility requirement, and in that event, any portion of the leave taken for an FMLA-qualifying reason after the employee meets the eligibility requirement would be FMLA leave. See §825.300(b) for rules governing the content of the eligibility notice given to employees.

29 CFR §825.110(c)(3).

So if an employee has worked the 12 months and 1,250 hours when the leave starts, they get all the leave even if they fall below the 1,250 hours after the leave has started.  And conversely, if an employee is not eligible when the leave starts but becomes eligible during the leave, then once they become eligible the leave is FMLA covered.  How can this happen?  Well, let’s say you have a pregnant employee who is not yet eligible for FMLA leave because she has not worked for you for 12 months, but you have a maternity leave policy, so she is out on leave.  While she is out on leave she crosses over the 12 month threshold.  Now, she is FMLA eligible and entitled to FMLA leave.  Your eligibility notice becomes very important if this happens.

What does it all mean and who does it mean it for? An Eligible Employee under the FMLA, Part 1.

Well now we know who a covered employer is under the FMLA.  So who gets leave?  Every employee?  No, only “eligible employees.”

(a) An eligible employee is an employee of a covered employer who:

(1) Has been employed by the employer for at least 12 months, and

(2) Has been employed for at least 1,250 hours of service during the 12-month period immediately preceding the commencement of the leave (see §825.801 for special hours of service requirements for airline flight crew employees), and

(3) Is employed at a worksite where 50 or more employees are employed by the employer within 75 miles of that worksite. See §825.105(b) regarding employees who work outside the U.S.

29 CFR §825.110(a).

So let’s start with the 12 months.  The first requirement for an employee to be an eligible employee is they have to work for you for at least 12 months.  But that 12 months does not have to be consecutive:

(b) The 12 months an employee must have been employed by the employer need not be consecutive months, provided

(1) Subject to the exceptions provided in paragraph (b)(2) of this section, employment periods prior to a break in service of seven years or more need not be counted in determining whether the employee has been employed by the employer for at least 12 months.

(2) Employment periods preceding a break in service of more than seven years must be counted in determining whether the employee has been employed by the employer for at least 12 months where:

(i) The employee’s break in service is occasioned by the fulfillment of his or her Uniformed Services Employment and Reemployment Rights Act (USERRA), 38 U.S.C. 4301, et seq., covered service obligation. The period of absence from work due to or necessitated by USERRA-covered service must be also counted in determining whether the employee has been employed for at least 12 months by the employer. However, this section does not provide any greater entitlement to the employee than would be available under the USERRA; or

(ii) A written agreement, including a collective bargaining agreement, exists concerning the employer’s intention to rehire the employee after the break in service (e.g., for purposes of the employee furthering his or her education or for childrearing purposes).

(3) If an employee is maintained on the payroll for any part of a week, including any periods of paid or unpaid leave (sick, vacation) during which other benefits or compensation are provided by the employer (e.g., workers’ compensation, group health plan benefits, etc.), the week counts as a week of employment. For purposes of determining whether intermittent/occasional/casual employment qualifies as at least 12 months, 52 weeks is deemed to be equal to 12 months.

(4) Nothing in this section prevents employers from considering employment prior to a continuous break in service of more than seven years when determining whether an employee has met the 12-month employment requirement. However, if an employer chooses to recognize such prior employment, the employer must do so uniformly, with respect to all employees with similar breaks in service.

29 CFR §825.110(b).

And there are a bunch of little rules that apply to this whole 12 month thing.  For example, if there is a break in service – in other words, if the 12 months are not consecutive – the break in service has to be 7 years long before the 12 months resets. Or, if the time off is because the employee is in the military and covered by USERRA, the time spent in the USERRA-covered service is counted as time worked.  Of, if there is a CBA (or other written agreement) concerning the employer’s intention to rehire, that governs.

Also, any time that the employee is on the payroll, including time on paid or unpaid leave, for a part of a week, that part of the week counts as a full week toward the 12 months.  And finally, if the employee is employed intermittently or occasionally or casually (for example, say, seasonally) then 52 weeks equals 12 months.

Oh, and you can also choose to recognize periods of employment that occurred longer than seven years ago, but if you do you have to do it uniformly.

 

So just what is a “Successor in Interest”?

Last time we talked about joint employers and you will remember that this occurs when two separate and distinct employers can be considered a single employer for purposes of the FMLA.  This time we are going to talk about when an employer is considered a successor of the prior employer for purposes of the FMLA.  This generally occurs when one company buys another company, to put it really simply.

And generally this is only an issue when one company buys the assets of the other company, not the stock.  Why is that?  Because if you buy the stock of a company, that company, which is a legal “person”, continues to exist and continues to employ its employees.  So it is not really a successor, it is simply the same company with new owners.  So let’s go back and look at the definitions:

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, a “person” under the FMLA includes a “corporation” and other business entities.

So what is this successor in interest thing and why is it important?  Well, often when you buy a business, you don’t actually buy the business – instead you buy the assets of the business.  Things like buildings and machines and customer lists and goodwill.  When that happens, that is where the successor in interest analysis comes in.

(c) When an employer is a successor in interest, employees’ entitlements are the same as if the employment by the predecessor and successor were continuous employment by a single employer. For example, the successor, whether or not it meets FMLA coverage criteria, must grant leave for eligible employees who had provided appropriate notice to the predecessor, or continue leave begun while employed by the predecessor, including maintenance of group health benefits during the leave and job restoration at the conclusion of the leave. A successor which meets FMLA’s coverage criteria must count periods of employment and hours of service with the predecessor for purposes of determining employee eligibility for FMLA leave.

29 CFR §825.107(c).

As you can see, this can be important.  If I start a brand new company from scratch and go right out and hire 50 employees, I am automatically a covered employer because I have 50 employees, but I don’t have any eligible employees because none of my employees have worked for me for a year nor have they worked 1,250 hours in the last 12 months.  I have not existed for 12 months. But if I buy the assets of a company and put those assets into a new company, even though it is a new company, that might not be the case.  As you can see, if I am a successor in interest I have to grant leave for eligible employees who had provided appropriate notice to the predecessor or continue leave that began while the employee was employed by the predecessor.  In other words, the employees get credit for the time worked for the predecessor when they come to work for me.

OK, so if I buy the assets of a company, am I automatically a successor in interest?  Well no, not necessarily.

First, there is no bright line test for when a successor in interest exits:

(b) A determination of whether or not a successor in interest exists is not determined by the application of any single criterion, but rather the entire circumstances are to be viewed in their totality.

29 CFR §825.107(b).

But there is some guidance about what the DOL will look at when determining if a buyer is a successor in interest.

(a) For purposes of FMLA, in determining whether an employer is covered because it is a ‘successor in interest’ to a covered employer, the factors used under Title VII of the Civil Rights Act and the Vietnam Era Veterans’ Adjustment Act will be considered. However, unlike Title VII, whether the successor has notice of the employee’s claim is not a consideration. Notice may be relevant, however, in determining successor liability for violations of the predecessor. The factors to be considered include:

(1) Substantial continuity of the same business operations;

(2) Use of the same plant;

(3) Continuity of the work force;

(4) Similarity of jobs and working conditions;

(5) Similarity of supervisory personnel;

(6) Similarity in machinery, equipment, and production methods;

(7) Similarity of products or services; and

(8) The ability of the predecessor to provide relief.

29 CFR §825.107(a).

Seems a bit complicated, but as you can see, this is the same basic test used for Title VII so there is a body of case law that helps us determine when a company is a successor in interest.  So, if you are considering buying the assets of a company, keep in mind that you may also be buying obligations under the FMLA.

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.

Hold it, hold it, FLSA Regulations on Hold

I’m not having a very good month.  I have been just flat out wrong twice this month.  The first time was on the 8th.  And now last night.

U.S. District Court Judge Amos Mazzant last night issued a nationwide preliminary injunction blocking the Department of Labor’s new overtime regulations from taking effect on December 1. In order to get a preliminary injunction, a plaintiff must prove certain things–including that the plaintiff has a substantial likelihood of success on the merits. Without getting into all of the legal analysis, here is what matters to most of you.

Judge Mazzant found that the language of the statute was clear and that “The plain meanings of the terms in Section 213(a)(1), as well as Supreme Court precedent, affirms the Court’s conclusion that Congress intended the EAP exemption to depend on an employee’s duties rather than an employee’s salary.” As such the judge found, “With the Final Rule, the Department exceeds its delegated authority and ignores Congress’s intent by raising the minimum salary level such that it supplants the duties test.” But the Court did not stop there. Anticipating that some could argue that the language of the statute was not clear, the Court noted: “The Department has admitted that it cannot create an evaluation “based on salary alone.” Id. at 23. But this significant increase to the salary level creates essentially a de facto salary-only test.” The Court then went on to say that because the DOL had, in the Court’s opinion, exceeded its authority, the Court would not even discuss the automatic updating mechanism contained in the Final Rules.

There are a couple of things for you to remember First, this is a preliminary injunction, so at this point it is just a delay in implementation and not a final decision regarding the legality of the Final Rule. And secondly, the DOL is not likely to let this go unchallenged. In fact they issued the following statement shortly after the judge published his order: “We strongly disagree with the decision by the court, which has the effect of delaying a fair day’s pay for a long day’s work for millions of hardworking Americans. The department’s overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule. We are currently considering all of our legal options.” Also, given the procedural posture of this case, it could be argued that Judge Mazzant’s order only applies to public sector employers, but by our reading, it appears to apply to ALL employers – both public and private sector – who were going to be impacted by the new regulations.

So what should you do now? We see the following options:

If you have not done anything to prepare for these changes, it looks like your procrastination has paid off (at least for now). We would still encourage you to create an implementation plan should this injunction be overturned at some point.

If you have an implementation plan that you were preparing to roll out on December 1, you can: 1) go forward with your plan since it would keep you in compliance with both current and the potential future regulations; or 2) delay your plan pending the outcome of these lawsuits. If you choose Option 2, you should consider sending a message to any and all individuals who would have been impacted by the change. We suggest something like this:

A Federal court in Texas has issued an injunction preventing the new salary rules from going into effect. This has created uncertainty as to what changes, if any, will need to be made in the future. In order to ensure that we follow the law and avoid unnecessary disruption, we are delaying the implementation of our salary changes until we have more clarity on this issue. If you have any questions, you should contact the Human Resources Department.

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