FOCUS ON FMLA Strategies to Sharpen Compliance

1. FOCUS ON FMLAStrategies to Sharpen Compliance Marti CardiChief Compliance Officer Diane DawsonBranch Chief DMEC Compliance Conference … Portland, OR … April 15 – 17, 2013

2. Disclaimers Reed Group® disclaimer: 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 or employment question, each specific matter should be discussed with your attorney.

3. FMLA Works • The FMLA has served as the cornerstone of the Department of Labor’s efforts to promote work-life balance since President Clinton signed the legislation in 1993    • The best available evidence suggests that adopting flexible practices in the workplace potentially boosts productivity, improves morale, and benefits the economy

4. Agenda • Overview of FMLA claims • DOL investigation vs. employee lawsuit • DOL investigations – steps, procedures, etc. • Employer strategies for FMLA investigations • Common employer FMLA mistakes • Employer self-audit • Conclusion

5. An employee is unhappy about handling of his FMLA request – what happens next? • Employee has 3 options: • Discuss with employer – how do you encourage this? • File a complaint with U.S. Department of Labor • File a lawsuit in court • Filing with DOL is not a prerequisite to filing a private lawsuit • Employee has 2 years from date of employer’s last unlawful action to file a complaint • 3 years to file a lawsuit if employer’s violations were “willful”

6. Types of FMLA claims • Interference with FMLA rights: employer denied the employee FMLA benefits to which he was entitled • Any FMLA violation can be “interference” • Examples: • Denying FMLA leave • Discouraging employee from taking leave • Denying reinstatement following leave

7. Types of FMLA claims • Retaliation: employer makes an adverse decision with respect to the employee’s terms & conditions of employment because the employee exercised rights under the FMLA • Examples: • Terminating employee because she requested FMLA leave • Demoting employee because he is taking intermittent leave to care for a family member • Considering FMLA absences as a negative factor in performance reviews or project assignments

8. Remedies available for FMLA claims • Reinstatement • Back pay – lost income prior to court decision or settlement • Front pay – projected future/ongoing lost income • Value of lost benefits (e.g., medical expenses) • Other monetary losses (e.g., hiring a caretaker instead of taking leave to care for a family member) • Liquidated damages – for willful violations, an amount equal to actual damages plus interest (similar to punitive damages) • Interest, costs, attorney’s fees

9. DOL Investigation vs. Employee Lawsuit Lawsuit: • Aggressive attorney representing employee • Possible jury trial • Attorney will seek all possible damages • Front & back pay, liquidated damages, attorney’s fees, etc. • Employer will have to engage own attorney • Positive: Unlikely to expand claims to other employees

10. Cost of Losing an FMLA Case at TrialEXAMPLE: Assumes: $40, 000 / year salary 2 years of unemployment until trial

11. DOL Investigation vs. Employee Lawsuit DOL Investigation: • Focus is on enforcement and future compliance • DOL is neutral fact-finder who will consider all facts when determining what is legally due the employee • Employer might not need outside counsel • DOL will assist employer in compliance issues to avoid/minimize future employee claims • Negative: Investigation could be expanded to encompass other employees or other employer practices

12. DOL Guidelines • AUTHORITY • Section 106 of the FMLA • Section 11(a) of the Fair Labor Standards Act (FLSA) • GOALS • Compliance! (immediate and long-term) • Awareness/Knowledge • Appropriate remedies for affected employees

13. What Prompts a DOL Investigation? • Complaints • Directed Investigation

14. Steps of a DOL Investigation • Initial Employer Conference • Examination of Records • Site Inspection • Employee and Manager Interviews

15. Steps of a DOL Investigation(continued) • Final Employer Conference • Resolutions / Remedies • Possible appeal • Possible DOL lawsuit

16. Investigation Details • DOL Participants • Advance Notice • Time Frame to Respond/Comply • Scope of Investigation

17. Employer Strategies for FMLA Investigations When the DOL comes knocking: • Accept the inevitable & make it a HIGH priority • Strike the right tone • Be truthful – no games • Be prepared • Conduct an FMLA audit BEFORE an investigation • If advance notice, get records and witnesses ready

18. Employer Strategies for FMLA Investigations(continued) When the DOL comes knocking: • Provide what is requested • Select meeting & interview locations carefully • Discuss with DOL if requests seem too broad • Employee categories • Time frame • Geographic region • Types of records • NO RETALIATION – get the word out

19. Employer Strategies for FMLA Investigations (continued) After the investigation: • No retaliation • Assess all processes/procedures • Train, train, train • Document, document, document

20. Most Common FMLA Mistakes • Termination or Discipline for Missed Work Time • Leave Denial • Point System/“No Fault” Policy • Failure to Recognize Sufficient Information for Designation • Failure to Provide Notice • Medical Certification & Recertification Issues • Retaliation

21. Other Tricky FMLA Management Issues • 3rd Party Providers • Employer responsibilities • Forms & communications • Navigating: • Privacy Issues • HIPAA privacy rules • ADA • State Laws • Other relevant laws

22. Be Proactive – Audit Your FMLA Policies & Practices Audit NOW: • Prevent FMLA claims by improving your processes, forms, and training • Make a DOL audit less painful • Increase chances of success in defending a private lawsuit Check for compliance on each of the following audit points

23. Employer’s FMLA Self-Audit1. General Notice to All Employees 29 CFR § 825.300(a) • Two general notice requirements: • Posting – Conspicuous place, accessible to all employees; electronic posting OK • Handbooks or other written policies regarding employee benefits or leave rights; electronic OK • If no written leave policies, provide to all new hires • Content of general notices: • Explain the FMLA’s provisions • Provide information about filing a complaint with the Wage & Hour Division, DOL

24. Employer’s FMLA Self-Audit2. Specific Notices to Employees • Eligibility notice (oral or written) 29 CFR § 825.300(b) • Within 5 business days of employer knowledge of employee need for FMLA leave • If employee is not eligible, notice must state at least one reason • Eligibility does not change for same leave reason during 12-month leave year

25. Employer’s FMLA Self-Audit2. Specific Notices to Employees (continued) • Notice of Rights & Responsibilities (written) 29 CFR § 825.300(c) • Provide each time employee eligibility notice is sent • Variety of specific rights & responsibilities addressed, including employer-specific policies • May include certification forms

26. Employer’s FMLA Self-Audit2. Specific Notices to Employees (continued) • Designation notice (written) 29 CFR §§ 825.300(d); 825.301 • 5 business days after receiving sufficient info • Whether the employee’s leave will be designated as FMLA leave • Whether the employee’s leave will be counted as paid leave • Whether employer will require a fitness-for-duty cert upon RTW; list of essential functions if provider is to address these • Amount of leave that will be counted against FMLA entitlement (if known) • If amount is unknown (e.g., intermittent leave) respond to employee inquiries orally, followed up by written confirmation

27. Employer’sFMLA Self-Audit2. Specific Notices to Employees (continued) • Changes (written) 29 CFR § 825.300(d) – • If information in designation notice changes (e.g., employee exhausts FMLA leave entitlement) • Within 5 days of employer notice of change, and in connection with another need for leave • Disputes (written) 29 CFR § 825.301(c) – • Employer must discuss with employee if there is a dispute over whether leave should be designated as FMLA • Discussion & decision must be documented

28. Employer’s FMLA Self-Audit3. FMLA Certification Forms • Notify employee of need for certification within 5 days of employer’s knowledge of need for leave; provide form • Notify employee of consequences of failure to return adequate certification • Do not request more information than permitted by FMLA regs • DOL forms permitted but not required • Add GINA notice to certification for employee’s SHC • Provide employee 15 days to return completed cert form 29 CFR §§ 825.305; 825.306; 825.309; 825.310

29. Employer’s FMLA Self-Audit4. Job Descriptions • Describe essential functions • Use for fitness for duty certificates • Use to measure “equivalent position” if employee is not reinstated to SAME position • Describe other duties • Describe job qualifications • Information not in job description may be pertinent (e.g., employee’s shift or location)

30. Employer’s FMLA Self-Audit5. Rules for Calculating Leave Usage • Designated leave year (4 options) 29 CFR § 825.200(b) • Military caregiver leave – 26 weeks in a single 12-month period, measured forward only29 CFR § 825.200(f) • Application of rules relating to: • Holidays & employer work closure 29 CFR § 825.200(h) • Physical impossibility of mid-shift start/stop 29 CFR § 825.205(a)(2) • Mandatory overtime 29 CFR § 825.205(c) • Special rules for airline flight crews 29 CFR § 825.800 et seq.

31. Employer’s FMLA Self-Audit5. Rules for Calculating Leave Usage (continued) • Increments for intermittent & reduced schedule 29 CFR § 825.205 • Not more than minimum increment used for other types of leave • Not greater than one hour increments • Do not count more time as FMLA than amount of leave actually taken • Employee’s actual work week is the basis of intermittent/reduced leave entitlement (e.g., 50-hour workweek = 50 hours of leave x 12 weeks)

32. Employer’s FMLA Self-Audit 6. Incomplete/Insufficient Medical Certs 29 CFR § 25.305(c) • If cert form is complete & sufficient, employer cannot request any additional information • Advise employee in writing of any insufficiency or missing info • Allow employee 7 calendar days to cure the deficiencies • Only if employee fails to cure can employer deny the leave for an incomplete or insufficient cert

33. Employer’s FMLA Self-Audit 7. Authentication & Clarification of Medical Certs 29 CFR § 825.307(a) • Once a complete certification is provided, employer can contact provider • No supervisor contact with provider • Employer cannot ask for any additional medical information

34. Employer’s FMLA Self-Audit8. Recertification29 CFR § 825.308 • General rule – no more frequently than 30 days • But – no sooner than duration of condition specified in certification (e.g., 2 month duration) • Can recertify every 6 months, regardless of duration in certification (e.g., 8 months or lifelong condition) • Exceptions: employee requests extension; circumstances change significantly; employer has reason to doubt continued validity of original cert • Recert can be requested only in connection with an absence

35. Employer’s FMLA Self-Audit9. Maintenance of Benefits 29 CFR §§ 825.209-213 • Maintain same coverage under group health plan employee had prior to FMLA leave • Same employer and employee contributions • Includes applicable family coverage • Includes coverage for medical, surgical, hospital, dental, vision, mental health, etc. • If employee elects not to continue coverage, must be reinstated at end of leave without waiting period, exclusions, or examinations

36. Employer’s FMLA Self-Audit10. Managing Concurrent/Consecutive Leaves • FMLA, WC, ADA, state leaves, company policies, disability plans, etc. • Ensure process allows for analyzing each leave right separately • When more than one leave law, plan, or policy is applicable, employee gets the more generous benefit

37. Employer’s FMLA Self-Audit11. Reinstatement 29 CFR §§ 825.214-216 • Reinstatement to same or equivalent position • If employee reinstated to a different job, both job descriptions will be relevant to determine if “equivalent” • Virtually identical pay, benefits, working conditions, privileges, perquisites, and status • Same or substantially similar duties and responsibilities, entailing substantially similar skill, effort, responsibility, and authority

38. Employer’s FMLA Self-Audit12. Recordkeeping Requirements29 CFR § 825.500 • Any format is OK as long as the records are clear and identifiable by date or pay period • Keep records for 3 years • Make records available to DOL (inspection & copying) • “Copies [of FMLA notice documents] may be maintained in employee personnel files.” • Is this what you want to do? • Maintain medical records separately and in compliance with GINA and ADA if applicable (confidentiality)

39. Employer’s FMLA Self-Audit12. Recordkeeping Requirements29 CFR § 825.500 (continued) • Records to keep: • Employee identifying information (name, address, etc.) • Payroll data (rates of pay, hours worked, payroll additions/deductions) • Dates of employee FMLA leaves • Hours of leave taken by employees, if less than full days • Copies of employee notices of FMLA leave (if in writing)

40. Employer’s FMLA Self-Audit12. Recordkeeping Requirements 29 CFR § 825.500 (continued) • Records to keep: • Copies of employer notices to employees • Documents describing employee benefits and employer policies/practices regarding paid & unpaid leaves • Premium payments of employee benefits • Records of any dispute between employer and employee regarding designation of leave as FMLA

41. Employer’s FMLA Self-Audit13. Are Your Employees Trained & Resourced? • Personnel who manage FMLA leaves (Human Resources & Benefits): • In-depth training and understanding • Resources for answering questions (attorney, DOL website, commercial websites, etc.) • Periodic training/seminars to stay current • Supervisors, Management • First line of defense! • Issue spotters, not experts • Red flags that send them scurrying to HR • No retaliation for FMLA requests or usage • Employees • How to request & discuss FMLA Leave

42. Sources for Assistance The Wage and Hour Division web site (www.dol.gov/whd/fmla) contains resources and information about the FMLA, including: • Key News • General Guidance • Fact Sheets • The FMLA e-laws Advisor • FMLA Poster • Optional Medical Certification Forms • Administrator Interpretations and Opinion Letters • The FMLA Statute • The FMLA Regulations • FMLA Employee Guide • FMLA Military Family Guide

43. Sources for Assistance Reed Group Leave of Absence Advisor™ • http://leaves.mdguidelines.com/ • In-depth coverage of federal FMLA 50-state leave laws: family & medical, military family, pregnancy disability, victims leave, sick & safe leave • Analysis • At-a-glance charts • Comparison charts • Citations to statutes and regulations • Practice notes • Examples • And more . . .

44. After the Investigation • Employers are PROHIBITED from retaliating against any complaining employee or anyone who participated in a DOL investigation.

45. QUESTIONS? Marti CardiChief Compliance Officer Diane DawsonBranch Chief