As we have previously discussed, the Department of Labor has revived the practice of issuing public opinion letters that clarify employers' obligations under federal employment laws. This practice is noteworthy not only because it helps employers understand their statutory obligations, but also because employers may rely on such opinion letters to establish a "good faith" defense against certain federal claims. The DOL recently released three new opinion letters.
The first opinion letter clarifies that if an employee's leave taken for medical reasons is Family and Medical Leave Act (FMLA)-qualifying, the employer must designate the leave as FMLA leave and may not delay such designation until after the exhaustion of any available paid leave. The second details when an employer may establish an optional employee volunteer program without being subject to the Fair Labor Standards Act (FLSA). The third makes clear that state law exemptions for live-in, residential janitors or similar employees do not exempt such employees from the federal FLSA. We analyze the first two letters below.
FMLA2019-1-A: An Employer's Obligation to Designate FMLA Leave
The FMLA generally entitles eligible employees to take up to 12 weeks of unpaid leave for covered family and medical leave purposes (e.g., birth or adoption of a child). It also permits employees to substitute any paid leave available under the employer's policies while out on FMLA leave. But what is an employer's obligation if an eligible employee requests to take paid leave first and delay the designation of FMLA leave until after the paid leave is exhausted?
According to the new DOL Opinion Letter FMLA2019-1-A, employers must (absent extenuating circumstances) designate the FMLA leave within five business days of obtaining enough information to determine that the leave is being taken for an FMLA-qualifying reason. The employer is prohibited from delaying the designation of FMLA leave, even as an accommodation or benefit to its employees. In other words, employers should designate covered FMLA leave, regardless of any paid leave the employee is required or eligible to take under the employer's policies.
Employers, however, may elect to permit employees to "stack" their FMLA leave and paid leave (e.g., PTO, vacation, paid sick leave, etc.) by allowing employees to take the FMLA leave unpaid and to use any available paid leave upon exhaustion of their FMLA entitlement. In the alternative, employers may require employees to utilize available paid leave and FMLA leave simultaneously, so that all paid leave runs concurrently with the FMLA leave, with any paid leave counting toward the FMLA leave entitlement, and vice versa. Employers also may offer additional paid or unpaid leave benefits to their employees—but such leave would not be subject to the FMLA's protections or restrictions.
Employers should make sure to review applicable state leave laws that may offer additional or different benefits or protections and exercise caution in relying on the DOL's new opinion letter to the extent it contradicts any binding precedent. For example, the opinion letter conflicts with a 2014 Ninth Circuit decision, which ruled that eligible employees do have a right to delay the designation of FMLA leave and effectively preserve their FMLA leave for future use. Employers subject to the Ninth Circuit's jurisdiction may want to consult their employment counsel prior to designating FMLA leave in reliance on FMLA2019-1-A.
Optional Employee Volunteer Programs
Employers who incentivize or otherwise encourage their employees to participate in volunteer work should consider whether such activities might be considered "hours worked" under the FLSA, and therefore subject to its overtime and minimum wage requirements. The DOL's recent Opinion Letter FLSA2019-2 outlines some of the key guidelines to protect employers against employee wage and hour claims.
As a threshold matter, this guidance applies only to volunteer work performed by employees outside of work hours for charitable or similar organizations. It does not apply to volunteer work performed during work hours, at the direction of the employer (even if it is for an outside charity), or work for the employer or employer's benefit that is similar to work performed by regular, paid employees (which likely does not qualify as "volunteer" work).
In order to fall outside the purview of the FLSA, an employer's volunteer program must be optional and designed to promote volunteering generally or incentivize employees to engage in community service and charity activities during the employees' non-work time, at their own discretion, and generally without the employer's supervision or direction. Activities performed pursuant to such programs will not count as "hours worked" for FLSA purposes, if the employee's involvement is truly voluntary, meaning that the employer does not unduly pressure employees to participate and there are no negative consequences for employees who do not participate.
Employers who choose to offer financial incentives related to participation in such activities should not guarantee a financial bonus or benefit for volunteering. They may, however, offer a discretionary bonus or incentive based in part on an employee's participation in outside volunteer work. For example, an employer may offer a monthly bonus to the employee or department that makes the biggest community contribution, measured in part by total hours of volunteer work. Employers may track the number of hours employees spend volunteering, for the purpose of measuring community impact, but should avoid paying employees a set dollar amount per hour spent volunteering.