LEAVE OF ABSENCE COMPLEXITY AND COMPLIANCE...Wal-Mart December 2016 $75,000 Failed to accommodate employee, a cancer survivor with physical limitations, and subjected her to harassment

LEAVE OF ABSENCE –

COMPLEXITY AND

COMPLIANCE

©2016 Reed Group. Confidential and proprietary information. Do not duplicate or distribute.

MEET YOUR HOSTS

Megan Holstein, Esq.

Vice President of Compliance

720.279.3463

[email protected]

ReedGroup

Lori Welty, Esq.

Compliance Attorney

720.440.6985

[email protected]

ReedGroup

mailto:[email protected]:[email protected]

LEGAL DISCLAIMER

Not Legal Advice

This presentation is designed to provide accurate information in regard to the subject matter covered. It is provided with the understanding that Reed Group is not engaged in rendering legal or other professional services. If legal advice or other expert assistance is required, the services of a competent attorney or other professional person should be sought. Due to the numerous factual issues which arise in any human resource, leave of absence, or employment question, each specific matter should be discussed with your attorney.

WHAT IS FMLA?

The Federal Family and Medical Leave Act (FMLA) was passed in 1993 to provide unpaid leave for employees; the Act has been expanded several times

FMLA provides:

•12 weeks of job-protection leave (not paid leave)•While on FMLA leave, an employee is protected from being fired for being absent from work

•Upon return, employee must be restored to original or equivalent position

•In some cases, the leave may extend up to 26 weeks

FMLA AND ADA

©2016 Reed Group. Confidential and proprietary information. Do not duplicate or distribute.RE E DG RO UP

WHAT IS FMLA?

FMLA applies to:

Employees who have worked for a total of 12 months: 1,250 hours worked in 12 months

The employer must be a covered FMLA employer

The employee must work at a location with at least 50 employees employed within 75 miles

FMLA can be taken for:

Medical leave when the employee is unable to work because of a serious health condition

Care for an immediate family member (spouse, child, or parent) with a serious health condition

Birth and care of the newborn child of the employee, or placement of a child for adoption or foster care with the employee

“Qualifying exigency” for employee’s parent, child, or spouse called to active military duty

Care for injured service member

AMERICANS WITH DISABILITIES ACT

Enacted in 1991

Key provisions related to employment relationship:

To provide reasonable accommodation to employee with a “disability” as defined by the Act

That will enable the employee to perform the essential functions of the job

Prohibits discrimination, harassment, and retaliation against a “qualified individual with a disability”

AMERICANS WITH DISABILITIES ACT

Requires employers to engage in the “interactive accommodation process” with a “qualified individual with a disability” and provide a “reasonable accommodation”

Amended in 2009 by the ADAAA—but this did not change the duty to accommodate

Updated regulations effective March 2011

Focus is no longer on whether the employee is disabled, but rather whether the employer engaged in the interactive process to accommodate an employee to perform essential job functions

#SettingtheCourse

Federal laws

80+ state leave laws

Separate municipal laws

Multiple requirements

Eligibility

Qualifying reasons

Available time

Americans With Disabilities Act

intersection

Complexity Risk and CostEnforcement

Since 2009—DOL increased staff by over

1,000 investigators

Leave initiatives a White House focus

Compliance costs

Recordkeeping/notification costs:

$213,188–$1.3 million*

$8.6 million dollar settlement for national

retailer for ADA violation (May, 2016)

$2M decree November 2012 EEOC

Disability Discrimination suit

Individuals can be liable for FMLA

violations

ChangeFederal Level

Change to same-sex marriage definition

FMLA regulations redone

6+ pending bill in Congress

Regulations revised March 8, 2013

State Level (last four years)

80+ new/changed state FMLA laws

9 new state sick pay leave laws

(multiple new municipal laws; 50+

bills pending for additional sick

leave laws)

Currently, 200+ state leave bills

* Employment Policy Foundation survey estimates as cited by the U.S. Department of Labor “Family and Medical Leave Act Regulations: A Report on the Department of

Labor’s Request for Information; Proposed Rule”; (June 28, 2007)

ABSENCE MANAGEMENT CHALLENGES—COMPLEXITY

COMPLEXITY—ELIGIBILITY

Federal eligibility issues—12 months and 1,250 hours

•12 months Must count previous employment

(up to 7 years)

Can become eligible midway

through a leave

•1,250 hours Time “actually” worked

Several cases where the employer lost because it hadn’t counted the hours correctly

State eligibility issues—multiple requirements for qualifying leave reasons

•Independent review of each state criteria Multiple state level:

oFMLA laws

ofamily military acts

obone marrow donation laws

ocrime victim/court witness laws

oschool visitation laws

odomestic violence leave laws

oother (volunteer firefighter leave laws, blood donation etc.)

COMPLEXITY—ENTITLEMENT

Entitlement Issues—12 weeks in a 12-month period

12 weeks

Intermittent leave

Changes based on normal weekly schedule (e.g., 12 weeks x 37.5 hr/wk schedule = 450 total hours)

Exception: Military Caregiver Leave—26 weeks of federal FMLA

In a 12 month period

Four methods to calculate—rolling backward is the most prevalent, but time rolls back on a daily basis.

COMPLEXITY—ENTITLEMENT

Entitlement—intermittent FML leave

Prevalent

Reed Group study of 112,000 closed FMLA claims indicates 51 percent had a period of Intermittent FML time and of those 21 percent had a short-term disability claim within 6 months

Intermittent leave is extremely difficult to:

Track—can be taken in one minute increments

Manage—often self-diagnosed (e.g., migraines, stress disorders)

Certify—cannot require certification of each absence—“interferes” with an employee’s rights (Jackson v. Jemberg Industries, Inc. 677 F. Supp. 2d 1042 (N.D. III 2010); Oak Harbor Freight Lines, Inc. v. Antti, 2014 WL 690247 (Dist. OR 2014)).

COMPLEXITY—ADA INTERSECTION WITH FMLA

The Americans with Disabilities Act (as amended in 2008) provides another layer of complex analysis.

A “qualified individual with a disability” is one who:

Has the basic skills, experience, education, etc., required for the position

Has a “disability” as defined

Can perform the essential functions of the position

With or without a reasonable accommodation


Two basic mandates for employers:

Prohibits discrimination, harassment, and retaliation against a “qualified individual with a disability”

Requires employers to engage in the “interactive accommodation process” with a “qualified individual with a disability”


Employer responsibility:

The employer must provide a “reasonable accommodation” to a qualified individual with a disability. Three-step analysis:

1.Is the workplace modification or adjustment reasonable?

Plausible, feasible, reasonable in the ordinary situation?

2.Is the workplace modification or adjustment effective?

Does it enable the employee to perform the essential functions of his/her position?

3.Does the workplace modification or adjustment impose an undue hardship on the employer’s business?

Even if an accommodation is reasonable and effective, the employer doesn’t have to provide that accommodation if it will impose an undue hardship on the employer’s business


The employer challenge

Current thorough guidance on how employers should provide leave as an accommodation is scare or nonexistent.

When and why is a leave an appropriate accommodation?

How long should the leave be?

When can an employer deny a leave request?

What are the employee’s rights upon return from leave?

PROPOSED LEGISLATION

PREGNANCY LEAVE LAWS


PREGNANCY LAWS – PREGNANCY ACCOMMODATION LAWS

PREGNANCY LAWS – PREGNANCY DISABILITY OR MATERNITY SPECIFIC LEAVE LAWS

PREGNANCY LAWS – ANTI-DISCRIMINATION LAWS

PREGNANCY LAWS – FMLA-LIKE LAWS THAT COVER PREGNANCY

PREGNANCY LAWS – PARITY LAWS

PREGNANCY LAWS

#SettingtheCourse

COST—LOSING AN FMLA CASE AT TRIALASSUMES: $40,000/YEAR SALARY TWO YEARS OF UNEMPLOYMENT UNTIL TRIAL

Damages Item Comment Typical

Amount

Back pay—two Common award in termination case—lost wages

up to date of judgment

$80,000

Front pay—one year Awarded if employee has not yet become re-

employed at time of judgment—lost wages

looking forward

40,000

Pre-judgment interest—on back

pay only

Always awarded; rate and whether compounded

varies; estimate here

8,000

Liquidated damages Similar to punitive damages—equal to amount of

front/back pay plus pre-judgment interest

128,000

Plaintiff’s attorney’s fees and

costs

Employer pays if employee wins 125,000

Employer’s est. attorney’s fees

and costs

Employer always pays (and is usually larger than

employee’s fees)

125,000

Total $506, 000

Based on Reed Group’s research, see Brown v. Nutrition Management Services Co. (E.D. Pa. 2009)(total verdict $477,311.64);

Hurley v. Kent of Naples, Inc. et al., 2013 WL 2399188 (M.D. Fla 2013)(total verdict $1,262,780)

#SettingtheCourse

RISK AND COST—RECENT EEOC CHALLENGES

Employer Date of

Consent

Decree

Amount Challenged Practice

S&B Industry February 2017 $110,000 Denying employment to two hearing-impaired applicants

because of their disability

Papa Johns Pizza January 2017 $125,000 Terminated employee with an intellectual disability despite

successful employment with a job coach

Diallo’s of Houston January 2017 $139,366 Forced employee to provide medical documentation to

prove she was not HIV-positive, and then fired her when she

failed to provide such documentation

Wal-Mart December 2016 $75,000 Failed to accommodate employee, a cancer survivor with

physical limitations, and subjected her to harassment based

on her disability.

Georgia Power November 2016 $1.5 Million + Refusing to hire applicants and firing employees based on

their disabilities or perceived disabilities.

United Airlines June 2015 $1 million + Requiring workers with disabilities to compete for vacant

positions for which they were qualified and which they

needed in order to continue working

Staples June 2015 $275,000 Failing to notify employee of his FMLA rights and properly

apply FMLA protections to his leave

Parker Drilling June 2015 $245,619 Withdrawing its initial job offer to hire applicant because he

had no vision in his left eye

ABSENCE MANAGEMENT SOLUTIONS


#SettingtheCourse

Source: Bureau of Labor Statistics, December 2014

LOST PRODUCTIVITY

•The average Fortune 500 employer spends 12 to 15 percent of payroll on total time off, often with very little management of these dollars

•Time off is one of the highest-valued benefits to employees—often second only to pay

26.60%

21%

2%

21%

14%

15.40%

Slicing the Benefit Dollar

Paid Leave

Health Benefits

Other Insurance Benefits

Legally require benefits

Supplemental Pay

Retirement and savings

#SettingtheCourse

UNDERSTAND YOUR CLIENTS/PROSPECTS CHALLENGES

•Culture•Current process Centralized/decentralized

Multi-site/state

STD

oOutsourced or in-house

oInsured or self-insured

•Intermittent leave issues/abuse•Tracking limitations

#SettingtheCourse

•Non-integrated outsourced solutions In-house administration oSoftware solutions available

o$$$$

Third party—TPA or payroll vendor administrationoTypically available for most employers 100 to 250+

•Integrated solution Placement of FML, STD and

LTD with one carrier/vendor solution

Some are providing ADA services

For large employers (1,000+) many provide vocational rehabilitation resources to increase return to work rates and may even assist with stay at work programs

Primarily available to employers 500+

UNDERSTAND THE OPTIONS/SOLUTIONS

#SettingtheCourse

WHAT DOES INTEGRATED ABSENCE MANAGEMENT LOOK LIKE

#SettingtheCourse

THE BUSINESS CASE:UNDERSTAND THE BENEFITS/IMPACT OF ABSENCE MANAGEMENT

SOLUTIONS

•Key to success—employer engagement•The ripple effect—impacts productivity, engagement, and healthcare spend Improved productivity, employee communication, employee satisfaction,

employee engagement, compliance

Reduced lost time days (absenteeism), healthcare cost, long term disability cost

Integration with wellness programs and disease management program initiatives

OTHER RESOURCES

LeaveAdvisor.com ReedGroup.com/blog MDGuidelines.com

OUR BIOS

Megan Holstein, Esq., is Vice President of Compliance at Reed Group. Ms. Holstein provides leadership, product creation, and effective guidance to ensure ReedGroup’s software and service products are best in class and compliant with governing law. Specifically, Ms. Holstein's work focuses on, and she has developed an expertise in, the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), and their state law equivalents as well as disability and family leave benefits, including ERISA as it pertains to short- and long-term disability plans. Ms. Holstein is the product owner for ReedGroup’s ADA and Workplace Accommodation product offering. Ms. Holstein co-authored ReedGroup’sLeaveAdvisor™ online reference tool and ReedGroup’s white papers regarding leave as an accommodation under the ADA, absences and accommodations for pregnant employees, and paid sick leave laws.

Lori Welty, Esq. is a Compliance Attorney at Reed Group. Ms. Welty tracks and analyzes pending legislation and bills relating to leave of absence law in local municipalities, the 50 states, and the United States Congress. She provides expertise in all areas of state and federal leave law, including Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), and their state law equivalents as well as disability and family leave benefits. Ms. Welty is an ongoing author of ReedGroup’s LeaveAdvisor™ online reference tool. She was the lead researcher and co-authored ReedGroup’s white papers regarding accommodations for pregnant employees, and paid sick leave laws.

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LEAVE OF ABSENCE COMPLEXITY AND COMPLIANCE...Wal-Mart December 2016 $75,000 Failed to accommodate employee, a cancer survivor with physical limitations, and subjected her to harassment