On Monday, February 11, 2008, the U.S. Department of Labor (“DOL”) published its proposed revisions to certain regulations implementing the Family and Medical Leave Act (“FMLA”). The proposed revisions, which incorporate some of the public comments received in response to a December 2006 request for information, appear at 73 Fed. Reg. 7876 (Feb. 11, 2008). Employers who were expecting a more precise definition of the term “serious health condition” or meaningful relief from the burdensome intermittent leave provisions will be sorely disappointed. Instead, employers must be content with a few minor tweaks and clarifications dealing with perfect attendance bonuses, waivers of past FMLA claims, procedures for calling in FMLA absences and certifications of the need for leave. This Advisory summarizes the key proposed changes in the regulations:
Intermittent Leave: Although the DOL acknowledged that “[n]o issue received more substantive commentary … than employee use of unscheduled intermittent leave,” it offered very little relief to employers struggling with this issue. In fact, the only significant proposed change to the intermittent leave provisions is a clarification that employees must make a “reasonable effort” (as opposed to an “attempt”) to schedule leave so that it does not unduly disrupt an employer’s operation. The DOL declined to permit employers to transfer or otherwise alter the duties of employees who need unscheduled or unforeseeable intermittent leave (though it did invite further comment on this point). The DOL also declined to increase the minimum increment of intermittent leave (though it again invited comment on whether employers can count an employee’s entire shift as FMLA leave when an employee leaves in the middle of the shift).
Definition of Serious Health Condition: Unfortunately, the proposed regulations do not offer any relief for employers struggling to interpret and apply the definition of the term “serious health condition,” especially as it pertains to conditions like cold and flu. While the DOL acknowledged receiving “extensive commentary on the regulatory definition of a serious health condition” (i.e., an outcry from employer groups), the DOL essentially punted and explained that they could not “identif[y] any alternative definition that would still cover all the types of conditions Congress intended to cover under the FMLA … without also including some conditions that many believe the legislative history indicated should not be covered.”
Continuing Treatment by Health Care Provider: Although the DOL punted on the definition of a serious health condition, it did offer employers some measure of relief when dealing with an employee who seeks leave for a serious health condition requiring “continuing treatment” by a health care provider. Under the existing regulations, an employee is not required to make the two visits to the health care provider within any particular time period. However, under the proposed regulations, the two visits must occur within 30 days of the beginning of the period of incapacity. Unfortunately, the DOL declined the suggestion from many employer groups that the two visits occur within the three-day period of incapacity. The DOL also stopped short of a bright-line rule by including an “extenuating circumstance” exception for situations where the employee experiences difficulty in scheduling the second appointment within the 30-day window.
Chronic Conditions: As it did with the troublesome definition of the term “serious health condition,” the DOL acknowledged that many employers find themselves in “an untenable situation” when dealing with chronic conditions, which only require “periodic visits for treatment.” The DOL declined to require that employees seek treatment for such conditions every 30 days, but did propose to define the term “periodic” as requiring at least two or more visits to a health care provider within a 12-month period.
Joint Employment: The proposed regulations clarify the joint employment rules as they pertain to use of a Professional Employer Organization (PEO). Specifically, a PEO will not be deemed to be a joint employer of a client’s employees if (1) the PEO contracts with an employer merely to perform administrative functions (e.g., payroll, benefits, etc.); (2) the PEO does not exercise control over the activities of the client’s employees; (3) the PEO does not have the right to hire/fire the client’s employees; and (4) the PEO does not benefit from the work performed by the client’s employees.
12 Months of Employment: The DOL addressed the key eligibility issue of whether an employee’s 12 months of employment must be consecutive or can include prior periods of employment. The DOL attempted to appease both employer and employee groups by issuing a “split decision” whereby the 12-month period does not need to be consecutive, but that employment prior to a continuous break in service of five years or more need not be counted toward the 12 months. Employers are free to count periods of employment that precede a five-year break in service, but they must do so uniformly for all employees with similar breaks in service.
Substitution of Paid Leave: The DOL proposed some new language confirming that employees wishing to substitute paid leave for unpaid FMLA leave must comply with all terms and conditions of the paid leave policies. For example, if vacation cannot be used in less than full day increments, then an employee cannot substitute paid vacation for intermittent FMLA leave in less than a full-day increment.
Needed to Care for Family Member: The DOL declined several suggestions to tighten the definition of the phrase “needed to care for” a family member with a serious health condition. Specifically, the DOL declined to include any requirement that “care” be limited to physical care only. The DOL also declined several suggestions that the employee seeking the leave must be the only available caregiver.
Holidays: The DOL confirmed that if an employee takes a full week of FMLA leave, then any holidays falling within that full week do count against the 12 weeks of leave. However, the DOL proposed that if an employee needs less than a full week of FMLA leave and the holiday falls within the partial week of FMLA leave, then the holiday hours do not count against the 12 weeks, unless the employee would otherwise have been required to report to work on that day. Obviously, this proposal promises to complicate, rather than simplify, the administration of FMLA leave for employers.
Perfect Attendance Bonuses: The DOL’s proposed regulations eliminate the confusing distinctions between attendance-based bonus programs and production-based programs. Under the new language, employees who take FMLA leave and thereafter fail to meet the requirements of bonuses that are based on achieving a specific goal, including hours worked, product sold or even perfect attendance, are not eligible to receive the bonus, provided that the employer does not grant the bonus to employees on other equivalent forms of leave, such as disability or maternity leave.
Light Duty: Under the proposed regulations, light duty is not the equivalent of unpaid leave and, therefore, employers are not permitted to count periods of light duty against the 12 weeks of FMLA leave. If approved, it will be interesting to see whether this change is sufficient to overcome several district court opinions holding that light duty can be counted against the 12 weeks of FMLA leave, at least for purposes of reinstatement.
Waivers of FMLA Claims: In a move sure to be cheered by lawyers, courts and DOL officials alike, the proposed regulations confirm DOL’s position that employers and employees are permitted to voluntarily agree to the settlement of past FMLA claims without the prior approval of the DOL or a court. While it remains to be seen whether courts will defer to the DOL’s position on this issue, it is nonetheless a welcome clarification.
Employer Notice Requirements: The DOL’s most sweeping changes pertain to the employer notice requirements. Under the proposed regulations, there are three types of employer notices. First, DOL has developed a prototype “general notice” to be used by employers to inform employees generally of their FMLA rights. Second, DOL has proposed an “eligibility notice” requiring employers to notify employees of their eligibility for FMLA leave within five business days of receiving a request for leave. Finally, DOL has proposed a “designation notice” requiring employers to notify employees that leave is being designated as FMLA leave within five days after receiving information sufficient to make such a determination. Consistent with the Supreme Court’s decision in Ragsdale v. Wolverine World Wide, Inc., the DOL’s proposed regulations recognize that employers can make retroactive designations of leave as counting as FMLA leave; however, an employee may be able to establish an interference claim if he or she has been prejudiced by the employer’s lack of timely notice. This new scheme will certainly be the subject of further challenges in the federal courts.
Employee Notice Requirements: The DOL also tweaked the rules regarding employee notifications of the need for leave. When the need for leave is foreseeable, employees are still expected to provide 30 days notice. Notably, if an employee becomes aware of a need for leave less than 30 days in advance, the DOL’s proposed regulations require that, absent emergency circumstances, notice be given either the same day or the following day. Employees who fail to provide 30 days notice must respond to an employer’s request for explanation of why it was not practicable to give such notice. Although the DOL declined to require employees to expressly request “FMLA leave” or to require written notice of the need for leave, the proposed regulations do require employees to provide information about their incapacity to work, the anticipated duration of the absence and whether the employee intends to visit a health care provider or is receiving continuing treatment. Employees are also obligated to follow an employer’s procedures for calling in absences and requesting leave. Finally, with respect to unforeseeable leave requests, the proposed regulations provide that, except in extraordinary circumstances, employees must provide notice to their employers no later than the start of their shift and that simply calling in “sick” is not sufficient notice to trigger an employer’s obligations under the Act.
Medical Certifications: Under the proposed regulations, employers would have five business days to request a medical certification of the need for leave. If a medical certification form is deemed to be incomplete (i.e., one or more entries are blank) or insufficient (i.e., the information provided is vague, ambiguous or non-responsive), then employers must describe the deficiencies in writing and give the employee seven days to cure the deficiency. The DOL has also developed a revised (and supposedly simplified) WH-380 certification form.
ADA and Workers’ Compensation: In response to concerns that the FMLA’s restrictions about gathering medical information conflict with similar provisions relating to workers’ compensation, disability benefits and requests for accommodation under the ADA, the DOL has proposed language clarifying that employers may request additional information beyond the FMLA certification when necessary to determine eligibility for such benefits or to determine whether an employee is entitled to a reasonable accommodation.
Contacting Health Care Providers: The proposed regulations relax the prohibitions against employers contacting health care providers and permit employers to contact the employee’s health care provider directly for purposes of authenticating and clarifying the medical certification, provided that the inquiry complies with HIPAA’s protections for personal health information. Notably, employers do not need an employee’s consent to contact a health care provider for purposes of authenticating a potentially fraudulent certification form.
Recertifications: The DOL attempted to clarify the confusing rules regarding how often employers can request recertification of the need for leave. Under the proposed regulations, as a general rule, employers would not be permitted to request recertification more frequently than every 30 days, unless circumstances have changed significantly (e.g., a change in frequency or duration of leave) or the employer receives information casting doubt on the continued validity of the certification. If the initial certification specifies a period of incapacity that is greater than 30 days, then an employer may not request recertification until the initial period has passed. However, in all cases (including certifications for an “indefinite” or “lifetime” period), an employer may request recertification every six months.
Return to Work Certifications: The proposed regulations permit employers to require additional information on return to work certifications. Notably, the DOL has proposed to eliminate the portion of the current language that only requires a “simple statement” of an employee’s ability to return to work. Additionally, an employer can require that the employee’s health care provider certify that the employee is able to perform a list of essential job functions. Perhaps most importantly, in the intermittent leave context, the DOL has proposed language that would permit employers to require employees to provide a fitness-for-duty certification every 30 days if an employee has used intermittent leave during that period and reasonable safety concerns exist.
The proposed regulations will be open for public comment for 60 days, which means that comments should be submitted to DOL by Friday, April 11, 2008. The DOL has also requested comments on the new amendments pertaining to family leave for armed forces members who are injured during active duty. Alston & Bird LLP plans to prepare and submit comments on the DOL’s proposals.