Two Business Women Office Employee Interview Man In Office
Abstract: Company leave policies must comply with a growing patchwork of overlapping federal, state and local laws. More cities and counties are adding to the complexity with legislation that mandates leave—sometimes of the paid variety—under an expanding set of conditions. Unintentional violations subject employers to costly litigation and diminished workplace morale.
After sustaining a serious back injury on the job, Andy was faced with surgery and rehabilitation. He applied for time off, provided his employer with the requisite paperwork, and was granted up to 12 weeks of leave under the Family and Medical Leave Act (FMLA).
So far so good. Then things cratered. At the end of 12 weeks Andy was still experiencing residual pain that would prevent him from performing his normal job duties. But when he asked for additional leave, his employer terminated him.
It was a bad decision that cost Andy’s employer significant financial penalties. The reason? The company had overlooked a key fact: Coverage for Andy’s condition overlapped with another law—the Americans with Disabilities Act (ADA). And that one required employers to offer reasonable workplace accommodation for employees with conditions that substantially limit major life activities.
Our opening story typifies a growing problem: Laws affecting leave policies constitute a confusing matrix of protections that challenges and penalizes even well-intentioned employers.
“The most common error we see regarding leave policies is the failure of employers to take into account the interplay of federal, state and local laws,” said James W. Seegers, partner at law firm Baker & Hostetler (bakerlaw.com). “And that comes back to bite them.”
Meeting legal requirements is especially challenging because of the number of laws that apply. At the Federal level, the FMLA covers employers with 50 or more employees and the ADA to those with 15 or more.
At the state level, the number of jurisdictions that mandate some degree of paid family leave, often for the smallest of employers, has risen from three to 12 and now protect about a third of Americans, according to a recent tally by The Economist.
An upward trend in paid sick leave mandates is also visible at city and county jurisdictions. “Time off policies are very popular with workers, and that’s why you are seeing so much more legislative activity,” said Edgar Ndjatou, Executive Director of Workplace Fairness (workplacefairness.org). “Employers will have to start getting ready for more of the same.”
Two forces are adding fuel to the fire, noted Ndjatou. The first is the growing need among employees to provide care for aging relatives. A second is the tendency for people to look upon leave as a pathway to improved health care. “Many people do not have access to sufficient health insurance. So a lot of them are saying, ‘if you’re not going to give me the best health insurance, what else are you giving me?’ And they look upon time off to take care of medical issues as the next best thing.”
When laws mandate conflicting protective standards, added Ndjatou, the general rule is that employers must follow whatever provides the greatest benefit or protection. “In practice, this can be complicated, especially for multi-state employers.” He suggests mapping out which laws apply to which employees based on work location, and then designing policies that meet or exceed the most protective standard in each jurisdiction.
Noncompliant employers face significant consequences including fines, civil penalties, back pay, interest, and in some cases private lawsuits or government enforcement actions. “Some states impose penalties that are equal to, or triple, the amount of unpaid wages or leave benefits,” said Harvey R. Linder, an employment and labor partner at CM Law (cm.law). “Administrative fines can range from $100 to $15,000 per violation, depending on severity and whether the employer is a repeat offender. Furthermore, those fines can be per-employee in the case of a class action suit. In some states, violation of paid leave laws can be a misdemeanor which can lead to jail time for the perpetrator.”
The laws of various jurisdictions can pile up. “You can be looking at three times the penalties if an incident violates federal, state and local laws,” said Kirkland Wayne Davis, SVP of HR Client Services & Employment General Counsel with Congruity HR (www.congruityhr.com). “Furthermore, an employer who has had a violation is on the radar. Prior offenders are much more likely to incur additional audits or scrutiny.”
The costliest cases involve court trials. “Litigation can get very expensive vary fast,” said Seegers. Employers can be on the hook for attorney’s fees—both for their own counsel and the employee’s—as well as back pay and even forward pay if the employee can show the difficulty of getting another job. There is also the potential for emotional distress damages if an employee has been worried about being terminated.”
Employers need to take a holistic approach, devoting time and effort into understanding how their workplace policies and procedures interact with federal, state, and local laws.
The task is made more difficult by continual changes in the law that can blindside employers. “Delaware, Maine, Minnesota, Washington state, and Colorado are among the many jurisdictions that have recently expanded the scope of their leave regulations,” said Davis. More jurisdictions are adding reporting requirements, expanding rights into areas such as fertility treatment. Finally, the legal definition of “family member” at the state level is expanding beyond traditional relationships to include siblings, grandparents, parents-in-law, and domestic partners and even close friends.
Attorneys say that employers can stay out of trouble by avoiding the following common errors in policies and procedures:
“Companies need to train their supervisors on how to recognize triggering events when employees put the company on notice about leave,” said Dolly Clabault, Subject Matter Expert in HR Resources at J.J. Keller (jjkeller.com). “How the supervisor responds in that moment is critical. They put the company at risk if they do not follow mandated procedures.” She recommends annual compliance training to remind forgetful supervisors of the right thing to do.
A valued employee requests leave—just when the business is about to start an important project. Frustrating? Yes. Optional? No. “Mixed messages from supervisors, even informal comments such as ‘we’re really busy right now,’ can have a chilling effect on employees who are legally entitled to take leave,” said Ndjatou. “The company must treat leave as a normal part of doing business rather than an exception or inconvenience.”
One supervisor thinks people should come to work when they’re sick. Another disagrees with some legally protected reasons for leave. A third thinks a certain worker has been abusing the system.
No matter. “Leave must be granted to everyone equally, “said Rachel Shaw, an HR consultant (shawhrconsulting.com). Employees share experiences with one another, and inconsistency can not only affect company morale but also lead to legal quagmires. “An employer can get targeted with a lawsuit if one supervisor grants leave liberally, while another makes applicants jump through hoops.”
Employees who have risen to a certain level in the company may well be granted more benefits than beginners. Therein lies the potential for legal problems.
“Inadvertent discrimination can possibly happen if an employer grants a certain level of parental leave for upper-level exempt salaried employees, but not for non-exempt employees,” said Linder. “In many cases that can lead to penalties for violation of state laws.”
“While it is legal to distinguish between job types in certain situations, an employer cannot structure policies in a way that disproportionately impacts a group that is female or other protected minority,” added Linder. “The safest practice is to design leave policies that apply to everyone.”
Another common pitfall is requesting documentation that the law does not permit. “Employers need to understand exactly what proof they can and cannot require and embed those boundaries into their processes,” said Ndjatou. The FMLA, for example, is strict about what documentation can be required and when employers can ask for it.
Jake has been home resting for a week. Is he coming along okay? Can he maybe come back to work early? The questions are natural, but the prudent business lets them go largely unanswered. “An employer might be able to get away with a single email or a couple of phone calls over time,” noted Seegers. “But at some point, an employee who feels the employer is infringing on their rights may have a cause of action.”
Bonus calculations. Performance reviews. Raises. Promotions. What role is played by the employee’s prior leave in all of those areas? None. “An employer must not retaliate in any way for leave that the worker has taken during the year,” said Seegers. Doing so can provide a cause of action.
Treating all leave as equal can backfire, said Seegers. “Many employers establish ‘no fault’ policies that say ‘If you’re absent X number of times, no matter what the cause, that triggers progressive discipline and eventually termination.’ They have to understand that they cannot penalize leave protected by law.”
Payroll systems must be set up correctly so that leave is tracked, calculated, and paid with precision. “Years ago, companies could get away with just entering numbers on a spreadsheet,” said Clabault. “But now there are so many state and local laws that it can get very complicated.” Mistakes can anger workers. “Employees get irritated when they are not paid what they are due and are tempted to turn to the courts for relief.”
This is particularly important for fluctuating hour employees, where inadequate record keeping can lead to underpayments and compliance violations.
Policies that call for leave time to expire at the end of the year can create problems. “Use it or lose it policies can end up driving unnecessary leave, which can be costly for employers,” said Shaw. “We suggest allowing some leave time rollover, or even some cash out.” Employers must follow state and local laws which often address this issue.
Programs need to be competitive in the marketplace, or employees will be tempted to leave for rival employers. “Many times, a robust leave program can mean the difference between getting or not getting the best talent,” said Ndjatou. “Younger workers in particular are putting a premium on work-life balance, and on being able to take time off from work.”
“Many businesses fail to adequately communicate their leave policies to employees,” said Shaw. “The result is a confused workforce, made worse by the high level of stress experienced by anyone who has incurred an injury, come down with an illness, or is suddenly faced with a family caregiving crisis.”
Written policies need to be communicated in one or more vehicles. Examples are the company bulletin board, a written handbook, an email broadcast, or an Internet web page.
A well designed and implemented leave program will protect a company from costly litigation while building a productive workforce. Employers need to develop policies defined enough to reduce employee and supervisor confusion, but flexible enough to incorporate constant changes in federal, state and local laws.
Leave policies that do all the above convince employees that their company values them, cares about them, and wants them to enjoy a degree of work life balance. “Poorly designed leave policies can harm a company,” said Shaw. “But policies that foster a positive working environment can be huge culture builders.”
Phillip M. Perry is an award-winning business journalist based in New York City. He covers management, employment law, finance and marketing for scores of business magazines.
Travel + Leisure Co. (NYSE:TNL), a leading leisure travel company, today announced plans for a…
Somewhere in your organization right now, someone who should be solving a real problem is…
The past twelve months have marked one of the most consequential periods in the history…
When you hear the title Meatballs & Mindset, you might expect a cookbook, a family…
Sena Hospitality Design Inc., an Orlando-based licensed interior design firm specializing in resorts, has been…
Sponsored by Grand Pacific Resorts Baseball players know the pressure of a full count —…