SAFEGUARDS

Growing BusinessSAFEGUARDS

  • Back to quick summary
  • Complying with Federal Laws

    Game Plan

    In-Depth

    The Family and Medical Leave Act (FMLA)

    At first glance, you might expect that the Family and Medical Leave Act (FMLA) will be easier to comply with than OSHA or EEO regulations. That’s because the law itself isn’t as sprawling as the other two. It states that eligible employees are entitled to as much as 12 weeks of unpaid leave per year for births, deaths, adoptions, serious medical problems, and other emergencies. Seems pretty straightforward, doesn’t it?

    Issues arise, however, because employees regularly exercise their right to take time off under FMLA. Estimates vary for the percentage of covered employees who use FMLA every year, but the most widely cited number is 14.5%. This by itself results in a lot of paperwork. Each employee has to apply for leave in writing and, of course, you have to reply in writing. And, as you’ll see below, there are complicated cases where the administrative burden becomes heavy indeed. In addition, you’ll need to plan for the impact on your budget and the rest of your workforce.

    Here are some useful steps you can take to get started:

    1. Determine if FMLA applies. FMLA only applies to companies with 50 or more qualified employees who have been on the job at least 12 months, and put in a minimum of 1,250 hours. If you meet that threshold, then you may already have human resources professionals on staff who can manage FMLA. If not, you will want to delegate FMLA compliance to make someone accountable. As most leave-taking results from medical issues rather than family ones, the logical choice may be the person at your firm who is responsible for health insurance, worker’s compensation, and short-term disability. 
       
    2. Your company’s FMLA rollout: The initial rollout of FMLA is not that difficult. You need to provide notice in the form of posted information where employees can see it, as well as written information supplied to new hires. When an employee requests leave in writing, you must respond with a statement of that person’s eligibility for FMLA, with all of the particulars concerning how much time will be deducted from his or her FMLA entitlement.

      Keep in mind that the law allows employees with certain chronic medical conditions to take “intermittent leave.” For example, if an employee’s condition acts up, he or she may leave the workplace for just a couple of hours at a time—with no advance notice. A bank of 480 hours per year taken in small increments adds up to a lot of coming and going. So you should plan to have a good system in place to track all FMLA activities for each employee.
       
    3. Budget for payroll and legal coverage. The need to budget for FMLA cannot be ignored. Again, estimates are all over the map but, conservatively, you should prepare for payroll costs to rise by 5% or more to pay for this entitlement.

      In addition, be aware that there is inevitably a certain amount of abuse of FMLA: Some medical claims may appear fraudulent; employers may request a doctor’s certification; employees may feel harassed; lawsuits may result, with fines and judgments. According to EEOC statistics, the average cost of defending an FMLA lawsuit is $78,000. And if you’re found guilty of wrongful termination, damages can range from $87,500 to $450,000.
       
    4. Plan work coverage. Many employers have existing staff cover for one another—often providing extra pay or future time off to compensate for the extra workload. This solution works well in situations where there’s a strong culture of mutual trust in the workplace. However, it may be necessary to bring in temporary help or add to permanent staff. 
    Game PlanGame Plan

    Game Plan

    • Fortunately, the learning curve for FMLA basics is not steep. Here’s a useful fact sheet PDF from the DOL.
    • Things do get more complicated when an employee actually applies for leave. The details of how and when you must respond are here.
    • Finally, here's an attempt to understand and quantify the costs and benefits of FMLA compliance. Skimming through can give you a heads-up on what to expect based on other employers’ experiences: