Tip of the Day: During layoffs, remember FMLA compliance

Even though FMLA and making reductions in staff are complicated enough on their own, putting the two together can create an even bigger headache for employers. However, staying on top of FMLA compliance during layoffs is essential to preventing liability and lawsuits.

“The most important thing is going to be documentation,” says Tarun Metha, a labor and employment attorney with Bryan Cave LLP, told Associate Editor Kathleen Koster in a report for BenefitNews.com. When employers consider layoffs, including workers who are on FMLA leave, they should make sure that they carefully review the files of workers out on FMLA leave.
“Ask yourself ‘if this went to a judge or jury, would it be convincing or does this look like an ad hoc compilation?’” Mehta explains.

“If it’s a large reduction in force, you sometimes let go employees who don’t have any performance problems. [In this case,] you’d want to document how you came to that number. You want to look at your statistics and make sure you’re not laying off everybody on FMLA leave or everybody of a certain age group,” says Mehta.

Discrimination on severance packages can also occur when dealing with workers on FMLA leave. Mehta recommends calculating the amount of severance on objective factors, such as seniority or the department’s performance. He also explains that employers should base the package on the past six months of performance, as those on leave will have less data to contribute. The decision should be pro-rated or should stem from a different calculation.

In addition, while employers can give a larger severance to an employee because he or she is on leave, they cannot do the reverse, Mehta notes. “You can, however, offer them less if this decision is based on documented merit, though few employers elect to do this, as it can be difficult to prove who is owed what in a larger layoff.”

Making measured decisions and documenting an employees’ progress before they go on leave is strongly advised to combat the severe risks associated with unlawfully firing an employee already on leave.

“[Right now] you see a combination of layoffs and desperation…and so the likelihood of increased litigation is almost guaranteed,” says Mehta. Finally, employers should also be familiar with state laws concerning FMLA leave as more often than not these regulations are stricter than the federal baseline.

Related EBN coverage:
House Dems introduce new paid-leave bill

News You Can Use: Got an FMLA headache? EBN's your aspirin

According to a recent poll on HR.BLR.com and Compensation.BLR.com, 49% of HR pros said FMLA is the law that gives them the biggest headache.

EBN is here to help, offering plenty of in-depth FMLA information -- which 9 out of 10 doctors agree is the best cure for an FMLA migraine (no, not really, but it's great stuff all the same). Click below for some of EBN's "greatest hits" for FMLA:

* Some doctors charge steep fees for FMLA forms
* Firms adjust to FMLA revamp
* I'm on FMLA leave
* BFE: Up your FMLA ante with these helpful tips

News You Can Use: Paid-leave legislation introduced in House

Designed to build upon FMLA, four Democratic Reps. Pete Stark (Calif.), George Miller (Calif.), Lynn Woolsey (Calif.) and Carolyn Maloney (N.Y.) last week introduced the Family Leave Insurance Act of 2009, which would provide 12 weeks of paid benefits to workers who need to take time off to care for an ill family member, a new child, or because of their own illness.

“Millions of American workers are all too often put in the position of choosing between getting paid and dealing with an illness or welcoming a new child to the family. Americans shouldn’t have to make that choice," Miller said. "Family-friendly policies like guaranteed paid leave not only help parents balance work and family, but also improve employers’ bottom lines. When workers can take advantage of these family-friendly policies, their employers benefit from increased recruitment and retention rates, decreased absenteeism and improved productivity.”

Maloney added: “There couldn’t be a worse time than during an economic downturn to ask parents to choose between a paycheck and their new child or sick family member. Tough times call for strong supports for working families, like paid family and medical leave."

The legislation will:
* Provide all workers with 12 weeks of paid leave over a 12-month period to care for a new child, provide for an ill family member, treat their own illness, care for a wounded veteran, or deal with the deployment of a family member.
* Provide these benefits through a new trust fund that is financed equally by employers and employees, who will each contribute 0.2% of the employee’s pay (for the average worker, less than $7 a month, sponsors estimate).
* Progressively tier the benefits so that a low-wage worker (earning less than $30,000) will receive full or near full salary replacement, middle income workers ($30,000- $60,000) receive 55% wage replacement, and higher earners (over $60,000) receive 40-45%, with the benefit capped at approximately $800 per week.
* Administer the program through the Department of Labor which will contract with states to administer the program.
* Allow states and businesses with equivalent or better benefits to opt-out of the program.

Click here to view a complete summary of the bill and bill text, then comment and let me know your thoughts on the legislation -- Bravo! or Boo!

Tip of the day: Get a grip on absenteeism reasons, costs

It seems keeping a handle on who's out when for what is the "Who's on First?" of benefits management. A survey from Mercer finds that total cost of absence can equal as much as 36% of payroll. Of that figure, 9% accounts for unplanned absences. Planned absences, like vacations and holidays, average 26.6%. For a mid-size business, this unplanned absence can account for as much as $4.5 million dollars per year, reports Mercer.

"Employers tend to focus their energies on managing health care costs because the dollars are easily measured," says George Faulkner, principal and absence management specialist at Mercer. "But this new survey suggests that absences cost employers more than half the cost of health care, a startling number and a call to action for all organizations to get a better handle on this often unchecked cost," he adds.

Click here for EBN coverage on quantifying and reducing absenteesim costs, particularly FMLA absences.

Tip of the Day

Revisit employee medical confidentiality requirements.

With changes to the ADA and FMLA, and the persistent unknowns of HIPAA, experts at Ogletree Deakins advise employers to brush up on the laws and their provisions for employers regarding maintaining workers' medical privacy. Click here for the firm's advisory.

News You Can Use: President-elect sets ambitious work-life agenda

Among his many large scale goals, President-elect Barack Obama has set a high-flying work-life agenda, including a federal mandate for paid sick leave and expanding FMLA to encompass employers with 25 or more workers (current law applies to 50 or more), more purposes -- including children's school needs, and expand care to more family members.

Read more here from the Wall Street Journal about Obama's work-life proposals and others on the federal and state level.

News You Can Use: Final FMLA rules clarified

The DOL clarified new FMLA provisions today, the first since the law was enacted in 1993.

Read this Employee Benefit News Web Exclusive for details.

News You Can Use: FMLA advice from the pros

Benefit managers listened with rapt attention to the morning session "Maximize the effectiveness of your in-house FMLA management program" by Linda Southard, president of Work & Well.

Most managers in the audience were on hand to learn more about administrative issues like stemming FMLA abuse. Southard presented data suggesting upwards of 40% of benefit managers experience "extreme difficulty" in administering intermittent FMLA leave. When administering this type of leave, 38% of HR professionals felt that notification time was inadequate and 28% reported tracking difficulties.

For the 40% of benefit managers out there who feel as if they've been forced to approve illegitimate claims, Southard offered a handy tip sheet. Here's her checklist of ways to leverage FMLA regulations to work to your advantage:

* Maintain a trail of documentation - this means detailed calendars of every absence and each and every request. Time on the front end can eliminate claims on the back end.
* Require paid leave substitution when applicable. If possible, Southard suggests modifying your own policies to be most strict about definitions than FMLA - in essence at times allowing for Short Term Disability when an employee would otherwise be eligible for FMLA.
* Designate a specific health care provider for FMLA concerns, and talk to those physicians about documentation requirements. In a targeted medical review, ask if the employee can perform specific job functions and be sure to clarify any inconsistencies up front.
* Insist upon FMLA recertification every 30 days, particularly for those employees from whom you suspect abuse. This is covered under provision 825.308 in the FMLA handbook. If necessary, this can be modified to require that an employee reclarify every absence if necessary. "It's a pain in the neck administratively, but it works!" says Southard.
* Get second and third opinion exams from physicians.
* Watch scheduled appointments - doctor's appointments should require no more than a three hour or half-day absence from the job, says Southard.
* Schedule periodic reviews of files for patterns of abuse, like chronic Friday absences.

For more information on FMLA issues, look for Managing Editor Leah Shepherd’s feature in the November issue of Employee Benefit News.
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Overheard At:

Nicole Price, benefit manager for the National Wildlife Federation, attended the session. Here are her thoughts:

• "It's a great overview for those who wanted to learn more about FMLA in general. I would have liked to see more information about how to handle suspected cases of abuse."
  
• Nicole, a nine-year veteran of the benefits industry, says she's most looking forward to the Spy Museum event this evening, but also really enjoyed this morning's keynote address with Newt Gingrich. Check the EBN home page for details on that address.
  

News You Can Use: Intermittent FMLA leave is benefit managers' biggest headache

Employees abusing FMLA through intermittent leave is employers' top complaint, CCH reports, with 42% of HR/benefits pros citing this as their biggest problem. And while just one-quarter favor eliminating intermittent leave entirely, most respondents support the Labor Department's proposals to curb FMLA abuses:
- Allowing employers to require medical recertification requests of a continuing condition at least every six months of absence (88%).
- Requiring employees to give advance notice of nonemergency, foreseeable leaves and providing definitions of those terms (95%).
- Changing the definition of continued treatment for a serious health condition by requiring at least two visits to a medical provider within 30 days (73%).

Stay tuned for coverage in the November EBN on ways to reduce FMLA abuse.