Department of Labor Weighs In On Deferral of FMLA Designation – Don’t Let Michigan’s New Paid Medical Leave Law Trip You Up!

In a recent Opinion Letter ruling, the United States Department of Labor (DOL) examined the question of whether an employer subject to the federal Family and Medical Leave Act (FMLA) could permissibly allow an employee “to exhaust some or all available paid sick (or other) leave prior to designating leave as FMLA-qualifying?” The apparent intention of the employer submitting this inquiry was to permit such employee essentially to extend “additional FMLA leave beyond the 12-week FMLA entitlement” by adding some other leave at the beginning of the leave period. Another reason an employer might consider deferring its statutory FMLA eligibility determination could be simply to avoid that exercise when the leave is otherwise covered by another leave entitlement policy of the employer, whether paid or unpaid.

Since many Michigan employers have under the recently-enacted Michigan Paid Medical Leave Act undoubtedly created or modified their sick leave policies, this ruling presents a timely opportunity for your enterprise to avoid conflicts between the two statutes.

DOL’s OPINION

The DOL concludes that an employer may not defer or delay designating leave as FMLA or not FMLA. Applicable regulations, the Department notes, “require employers to provide a written ‘designation notice’ to an employee within five business days.”

The Department concludes that “(f)ailure to follow this notice requirement may constitute an interference with … or denial of … an employee’s FMLA rights.” This conclusion may be surprising, as an effective extension of leave would seem to benefit the employee, and it is an established principle under the FMLA regulations that employers may adopt leave policies more generous than those required by the FMLA.

MICHIGAN’S PAID MEDICAL LEAVE ACT

Michigan’s new Paid Medical Leave Act requires covered employers to provide paid leave for various purposes or reasons. Those reasons generally, but not in all cases, track the reasons a leave may qualify for FMLA protection. Based on the known principle that an employer may adopt a “more generous” policy than federal law requires, many employers may assume that allowing an employee to use paid leave under the Michigan Act would be permissible and would excuse them of any obligation under the FMLA while the worker is on paid leave.

NOT!

Moreover, one of the most common FMLA errors employers make is to fail to designate an absence as FMLA-qualifying even if the absent worker does not indicate that the leave is FMLA-eligible, and even if the employee doesn’t refer to FMLA or use the words or acronym. Applicable regulations require that whenever the employer “has enough information to determine whether the leave is being taken for a FMLA-qualifying reason” according to the Letter, the FMLA designation determination and notice must be provided within the five business-days period. And, note that this standard is not limited to information provided by the employee. The designation obligation arises as long as the employer has enough information on the nature of the reason for the absence to have reason to believe that the employee’s right to an FMLA-protected leave may be implicated.

THE RULE IN BLACK AND WHITE

Always provide notice of a designation of FMLA eligibility within five business days of when you have enough information to make that determination, whether an FMLA leave is requested, and whether or not the employee is eligible for some other leave, including a paid leave under the Michigan Act.

IMPORTANT P.S.: FREE ADVICE

Savvy employers know that FMLA regulations permit them to require use of other leave concurrently with FMLA leave. The reason to adopt such policy is to prevent the employee from obtaining more leave than the 12 weeks allowed by the FMLA. Thus, a Michigan employer may adopt a written policy requiring its employees to use – and even, exhaust — paid leave provided in conformance with the Michigan Paid Medical Leave Act while employees are on an FMLA-qualifying leave.

You can view the full letter here: https://www.dol.gov/whd/opinion/FMLA/2019/2019_03_14_1A_FMLA.pdf

Contact us if we can assist you in revising or reviewing your policies.


Fraser Trebilcock Shareholder Dave Houston has nearly 40 years of experience representing employers in planning, counseling, and litigating virtually all employment claims and disputes including labor relations (NLRB and MERC), wage and overtime, and employment discrimination, and negotiation of union contracts. He has authored numerous publications regarding employment issues. You can reach him at 517.377.0855 or dhouston@fraserlawfirm.com.

Michigan’s New Paid Medical Leave Act Is About To Become Effective. Are You Ready?

Paid Medical Leave Act in General

The recently enacted Paid Medical Leave Act (PMLA) requires entities which employ 50 or more individuals to provide paid medical leave for their eligible employees and family members.

Effective Date

March 29, 2019

Affected Employers

Any employer (aside from certain governments) that employs 50 or more individuals is subject to the law, regardless of where those employees work or live. However, even though the employer would be subject to the law, employees whose primary work location is outside of Michigan would not be protected by it.  So if you had 55 employees with 45 working out of state, the law only applies to the 10 working in Michigan.

Eligible Employees

Significantly, eligible employees do not include individuals who are exempt from overtime requirements under the FLSA section 13(a)(1), non-public agency employees covered by CBAs currently in effect, federal or state (or political subdivision) government employees, employees in a job scheduled for 25 weeks or less (and work 25 weeks or less), employees who worked on average less than 25 hours per week during the immediately preceding calendar year, variable hour employees (as defined under Pay or Play), as well as a few other exceptions (including certain employees under the railroad unemployment insurance act, railway labor act, MI employment security act, and improvement opportunity wage act).

Family Members

The definition of family member is broad and includes:

  1. A biological, adopted or foster child, stepchild or legal ward, or a child to whom the eligible employee stands in loco parentis.
  2. A biological parent, foster parent, stepparent, or adoptive parent or a legal guardian of an eligible employee or an eligible employee’s spouse or an individual who stood in loco parentis when the eligible employee was a minor child.
  3. An individual to whom the eligible employee is legally married under the laws of any state.
  4. A grandparent.
  5. A grandchild.
  6. A biological, foster, or adopted sibling.

Therefore, if an employee’s brother is ill, the employee is allowed to take leave to care for his/her brother.

Basis of Accrual

The employer can provide paid medical leave on either: (1) an accrual basis (of at least one hour for every 35 hours worked – cannot be less than 40 hours in a benefit year) or (2) can front at least 40 hours of paid leave at the beginning of the benefit year (and can prorate for mid-year hires).

If the accrual basis is used, an employer is not required to allow the employee to accrue more than 1 hour per calendar week and may limit the accrual and use of paid medical leave to 40 hours per benefit year. However, the employer must allow the employee to carryover at least 40 hours of unused accrued paid medical leave from one benefit year to the next.

If the front load option (of at least 40 hours) is used, the employer is not required to allow the eligible employee to carry over any of the paid leave to another benefit year.

For new hires, an employer can require a 90 day waiting period after hire to use any accrued paid leave.

The paid medical leave must be provided at a pay rate equal to the greater of the normal hourly wage / base wage for that eligible employee or the minimum wage rate under the improved workforce opportunity wage act. An employer is not required to include overtime pay, holiday pay, bonuses, commissions, supplemental pay, piece-rate pay, or gratuities in the calculation of an eligible employee’s normal hourly wage or base wage.

Use of Medical Leave

Leave can be used for personal or family health needs, domestic violence and sexual assault (documentation can be required but cannot ask details), missing work due to closed schools (to take care of children) or closed work for public health emergencies, and for issues with regard to communicable diseases. Specifically, paid medical leave is for:

  • The eligible employee’s mental or physical illness, injury, or health condition; medical diagnosis, care, or treatment of the eligible employee’s mental or physical illness, injury, or health condition; or preventative medical care for the eligible employee.
  • The eligible employee’s family member’s mental or physical illness, injury, or health condition; medical diagnosis, care, or treatment of the eligible employee’s family member’s mental or physical illness, injury, or health condition; or preventative medical care for a family member of the eligible employee.
  • If the eligible employee or the eligible employee’s family member is a victim of domestic violence or sexual assault, the medical care or psychological or other counseling for physical or psychological injury or disability; to obtain services from a victim services organization; to relocate due to domestic violence or sexual assault; to obtain legal services; or to participate in any civil or criminal proceedings related to or resulting from the domestic violence or sexual assault.
  • For closure of the eligible employee’s primary workplace by order of a public official due to a public health emergency; for an eligible employee’s need to care for a child whose school or place of care has been closed by order of a public official due to a public health emergency; or if it has been determined by the health authorities having jurisdiction or by a health care provider that the eligible employee’s or eligible employee’s family member’s presence in the community would jeopardize the health of others because of the eligible employee’s or family member’s exposure to a communicable disease, whether or not the eligible employee or family member has actually contracted the communicable disease.

Procedural Requirements

Eligible employees must comply with the employer’s usual and customary notice, procedural and documentation requirements for requesting leave; however, the employer must give the employee at least 3 days to provide the documentation. Furthermore, the law has parameters on documentation required for domestic violence or sexual assault. If you require such documentation, you should discuss these parameters with legal counsel.

Additionally, unless the employer has a different written increment policy in an employee handbook or other benefits document, paid leave must be used in 1 hour increments.

Employers who transfer to other divisions, entities or locations but remain employed by the same employer are allowed to retain all accrued paid medical leave. However, if the employee separates from service and is rehired, the accrued paid leave may be lost. There are no requirements to reimburse employees for unused time.

Notice and Document Retention

You are required to display a poster at your place of business, in a conspicuous and accessible place, containing the amount of paid leave required, the terms under which the paid medical leave may be used, and the employee’s right to file a complaint with the department for any violation. The department will create and make said posters available at no cost.

Finally, PTO records shall be retained for not less than 1 year and are subject to inspection.

Penalties

For violations of the law, the department may impose penalties and grant an eligible employee or former eligible employee payment of all paid medical leave improperly withheld. Employers failing to provide paid medical leave are also subject to an administrative fine of not more than $1,000.00. Additionally, an administrative fine of not more than $100.00 may be imposed for each separate violation of the posting requirement.

This communication serves solely as a general summary and does not constitute legal advice, and cannot be used or substituted for legal advice.


Elizabeth H. Latchana, Attorney Fraser TrebilcockElizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2019 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.