Interplay of FMLA and ADA Precludes Employers from Automatically Terminating Employees at End of FMLA Leave

Q: Can my company fire an employee once the person has exhausted his or her FMLA leave entitlement?

A: Many employers are surprised to learn that they may not necessarily terminate an employee if he or she does not return to work at the end of FMLA leave.  Under the Family Medical Leave Act (FMLA), an employee is eligible for up to 12 weeks of unpaid job-protected leave.  Upon returning from FMLA leave, except in a few limited situations, an employee is guaranteed the right to return to the same position or to an equivalent position with equivalent benefits, pay, and other terms and conditions of employment that the employee held before the leave commenced.  Under FMLA regulations, however, an employee does not have a right to return to work if he or she is unable to perform the essential duties of the position.

But what if the employee asks for more time off after the FMLA leave period has expired?

Once an employee has exhausted his or her FMLA leave, the Americans With Disabilities Act (ADA) requires employers to consider whether an extension of leave is warranted as a reasonable accommodation of a disability. An extended leave may be a reasonable accommodation if it is for a finite period of time to receive treatment or to recover from a disability.  Employers must consider each situation on a case-by-case basis, engaging in the interactive process with the employee to determine whether the employee has a disability within the meaning of the ADA, and whether an extended leave would be a reasonable accommodation to enable the employee to perform the essential functions of the job once he or she returns to work.  Employers also must determine whether there are any applicable state laws or worker’s compensation laws that are implicated.

In addition to considering the application of the ADA to each employee’s situation, employers should ensure that their employee handbooks do not contain return to work policies that violate the law. Language that calls for automatic termination after the employee has been absent for a certain period of time may give rise to liability for failure to consider the impact of the ADA.

Renee C. Manson

 

California’s New Parental Leave Law Adds to the Complexities of Administering Leaves of Absence for National Employers

Q: I heard there is a new parental leave law in California.  How does it compare to other states’ laws and will it affect my business if I have employees in California?

A: Parental leave laws are one of the most complicated aspects of employment law to administer and track.  There are federal, state, and local laws at play, and there is very little uniformity across the laws and across the states.  Even within one state, there may be multiple laws applicable to parental leave, and it can be difficult to navigate the interaction and overlap between the laws.  California’s new parental leave law continues to add to this complexity.

As a starting point, it is important for employers to understand the difference between laws that provide leave entitlement and laws that provide compensation during leave. Laws that provide leave entitlement generally provide eligible employees with a certain amount of leave for qualifying reasons.  The leave is unpaid, but most laws and/or employer policies require or allow employees to use accrued paid time off for part or all of the leave.  Many states also have laws that provide compensation for time off, but do not necessarily provide a leave right.

California’s new parental leave law is an entitlement leave law.  Effective January 1, 2018, employers with 20 to 49 employees nationwide must provide up to 12 weeks of unpaid leave for baby bonding.  In essence, this expands to smaller employers the obligation to provide baby bonding leave under the California Family Rights Act (“CFRA”), which applies to employers with 50 or more employees nationwide.  To qualify for leave,  employees must have worked for the employer for at least 1,250 hours in the past 12 months, and work at a worksite where the employer employs at least 20 employees within 75 miles.

In addition to baby bonding leave (as mentioned above), the CFRA, a leave entitlement statute, provides employees up to 12 weeks off to care for an immediate family member with a serious health condition, or for the employee’s own serious health condition. A third California leave entitlement law – the California’s Pregnancy Disability Leave Law (PDL) – entitles an employee to up to 16 weeks of leave for disabilities related to pregnancy.   The PDL applies to employers with five or more employees nationwide, and there is no minimum requirement of number of hours or years worked for an employee to be eligible.

California’s leave entitlement laws work in conjunction with the state’s Paid Family Leave (“PFL”) program. California PFL is a compensation law, and provides up to six weeks of partial pay to employees who take time off from work to care for a family member with a serious health condition or to bond with a new child.  California PFL applies to all employers who employ one or more employees, and have been paid wages of $100 or more in any quarter of the previous calendar year.  There is no minimum number of hours or days worked for employees to qualify for California PFL benefits.  California PFL is only a compensation law, however, and not a leave entitlement law – thus, it does not create any rights to leave, but rather provides partial pay for leave taken under leave entitlement laws and/or employer policies.  If the leave taken under FMLA, CFRA and/or PDL is for baby bonding or to care for a family member with a serious health condition, the employee can partially fund the leave for up to six weeks through California PFL.

For employers with employees in more than one state, it is important to understand the differences between the statutes of each state, as well as the leave entitlement provided by the federal Family and Medical Leave Act (FMLA), and administer them accordingly.   New Jersey, for example, has an existing paid family leave law (PFL), which is similar to California’s law.  To be eligible for New Jersey PFL (a statute that provides compensation rights but not leave rights), an employee must have worked at least 20 calendar weeks or earned at least $7,150 during the 12 months preceding the leave.  New Jersey also has a leave entitlement law, but does not provide a leave entitlement for an employee’s own serious health condition.

As discussed in an earlier post, New York also has a new family leave law that is effective January 1, 2018.  Like California and New Jersey PFL, New York PFL provides partially paid leave for an eligible employee who is providing care for a family member with a serious health condition, and for bonding with a child.  New York PFL also covers  time off for reasons associated with a spouse, child, or parent’s active military duty.  However, unlike California and New Jersey PFL, New York PFL provides both leave entitlement and compensation entitlement.

Given the complexities around leaves, employers should ensure their Human Resources personnel are thoroughly trained, and have access to legal counsel for consultation.

Jessica Rothenberg

Is an ‘Honest Belief’ of FMLA Misuse Enough for Termination?

Q.  Can I discharge an employee if I believe that he or she is misusing FMLA?

A.  According to a recent Third Circuit opinion, an employer’s honest belief that its employee misused FMLA leave is sufficient to defeat an FMLA retaliation claim, even if the employer was mistaken.

In Capps v. Mondelez Global, LLC, 847 F.3d 144 (3rd Cir. 2017), the company granted the employee intermittent FMLA leave for flare-ups as a result of hip replacement surgery.  On February 14, 2013, Capps took intermittent leave. That evening, he went to a pub and became severely intoxicated. On his way home, Capps was arrested for driving while intoxicated and spent the night in jail. He was scheduled to work the next afternoon, but called out again. Approximately six months later, Capps pled guilty to the DWI charge and served 72 hours in jail immediately following the guilty plea hearing.

The company’s HR manager learned about Capps’s arrest and conviction when he read about it in a local newspaper. The company then learned that the date of Capps’s arrest and subsequent court dates coincided with dates when he had taken intermittent FMLA leave. The plaintiff was terminated for violating company policy and sued, claiming that the company discriminated against him by terminating his employment in retaliation for taking FMLA leave. The lower court granted summary judgment on the ground that the company acted on an honest belief that Capps had misused his FMLA leave.

On appeal, the Third Circuit affirmed. Significantly, the court concluded that the company met its burden of demonstrating a legitimate, nondiscriminatory reason for the plaintiff’s discharge — the fact that Capps was terminated for misusing FMLA leave in violation of company policy. The court concluded that it is enough if the employer provides evidence that the reason for the adverse employment action was an honest belief that the employee was misusing FMLA leave, regardless of whether that belief turned out to be true.

Although the “honest belief” defense provides support for employers to take action based on a sincere belief that an employee misused FMLA leave, employers are cautioned to be careful in invoking this defense. Before terminating an employee for misusing FMLA leave, be sure to have objective evidence of misconduct. It is likely in most cases that it will be a jury question whether the employer’s belief was, in fact, truly honest.

— Tracey E. Diamond

When is Enough, Enough? Limiting Leave as a Reasonable Accommodation under the ADA

Q: How long does an employer have to accommodate an employee’s disability in the form of a leave of absence?

A: The law in most jurisdictions is unclear. In fact, in most jurisdictions, including Pennsylvania, New Jersey, and New York, there is no bright line rule as to the length of leave time that is reasonable under the ADA.  Typically courts look at the surrounding circumstances to determine whether the amount of time off is a “reasonable accommodation” and have held that leaves longer than three months were required in some circumstances as a reasonable accommodation.

Given this lack of certainty, employers are left with the daunting task of determining how much leave is “reasonable,” thus forcing many employers to typically extend leaves beyond what they may believe is proper.  To add to the uncertainty, the EEOC, which is the employee’s first pit stop in bringing an ADA claim, has taken the position that a two-to-three month leave, or longer may be reasonable.  Moreover, state laws protecting disabled individuals, such, for example, the New Jersey Law Against Discrimination, may provide for even greater protections to the employee.

A recent Seventh Circuit Court of Appeals case, however, has provided some concrete direction, at least to employers with employees located in Illinois, Wisconsin, or Indiana, regarding the amount of leave required as a reasonable accommodation under the ADA. In that case, the Court held that a multi-month leave likely was not required as a reasonable accommodation under the Americans with Disabilities Act.

In Severson v. Heartland Woodcraft, Inc. No. 15-3754 (7th Cir. Sept. 20, 2017), the employee brought a lawsuit after the employer terminated his employment rather than give him two to three months of additional leave to recuperate from back surgery after he had used up his Family and Medical Leave Act allotment.  The Court of Appeals for the Seventh Circuit, which covers Illinois, Indiana, and Wisconsin, stated that the ADA is “not a medical leave entitlement” and specifically held that “a multi-month leave of absence is beyond the scope of a reasonable accommodation under the ADA.”  In particular, the Court held that a such a multi-month leave cannot be a reasonable accommodation because a reasonable accommodation allows a disabled employee to work and perform the essential functions of the position, which the employee in this case could not do, thus disqualifying him from the protections of the ADA.  The Court noted however, that a short leave of absence—say, a couple of days or even a couple of weeks—may, in appropriate circumstances, be a reasonable accommodation.  Although the Severson case provides support for the position that extended, multi-month leaves of absence may not be required under the ADA, employers should not take it as a green light to reject all requests for a leave of absence under the ADA.

The Severson case is binding law only in the Seventh Circuit.  It remains to be seen whether other courts will follow the Seventh Circuit’s lead in limiting the amount of leave that is considered to be “reasonable.” Until that occurs, however, employers should tread lightly when making these decisions and consider all of the risks and benefits associated with rejecting a leave request.

Kali T. Wellington-James

New York Paid Family Leave Benefits Law: Key Provisions and Tips for Preparation

Q: What do I need to know about the new New York Paid Family Leave Benefits Law?

A: The New York Paid Family Leave Benefits Law (“NY PFL”) provides employees with paid leave for bonding with a new child, caring for a close relative with a serious health condition, and leave associated with when their spouse, partner, child, or parent is on active military duty or has been notified of an impending call of active duty.

Unlike the federal FMLA, which applies to employers with 50 or more employees within a 75 mile radius, all New York employers that have employed one or more individuals for 30 consecutive days are subject to the new law. The NY PFL also expands the definition of a covered employee from the FMLA.  Employees who have worked for at least 26 consecutive weeks (for employees whose regular schedule is 20 or more hours per week) or 175 days (for employees whose regular schedule is less than 20 hours per week) are eligible for NY PFL.

The NY PFL begins January 1, 2018, and will be phased in over a four-year period. For 2018, employees can take a maximum of 8 weeks of leave, and the maximum pay during the leave is 50% of the employee’s average weekly wage, which caps at 50% of the state average weekly wage (which is currently $1,296).  For example, in 2018, an employee who makes $1,000 per week would receive a benefit of $500 per week.  An employee who makes $2,000 per week would receive a benefit of $648 per week (half of $1,296).  Both the maximum weeks of leave and maximum pay during leave will increase over the four-year phase-in period, with 12 weeks of leave in 2021 and payment increased to a maximum of 67% of the employee’s average weekly wage.

Unlike NJ Paid Family Leave, which is administered through the State’s existing Temporary Disability Benefits Program, the NY PFL will be administered through each individual employer’s disability policy (or through self-insurance), and the premiums will be funded by employees through payroll deductions. The current rate of contribution for NY PFL is 0.126 percent of an employee’s weekly wage, up to a maximum of $1.63 per week.  Employers may start making the deductions on July 1, 2017, so  employers should contact their disability insurance carriers and payroll providers to prepare.

If the need for NY PFL is foreseeable, employees must provide at least 30 days of notice of their need for leave, and if the need is not foreseeable, the employee must provide notice as soon as practicable. Similar to the FMLA, employers must maintain employees’ existing health insurance benefits for the duration of NY PFL, and employees are entitled to reinstatement upon their return to work.

Employers may permit employees to use sick or vacation leave so that they can be fully compensated for time-off, but employers cannot require use of sick or vacation leave. If an employee is eligible for leave under both FMLA and NY PFL, employers may designate the leave as both FMLA and NY PFL, even if the employee declines to apply for NY PFL payments.

To prepare for the law and set employees’ expectations, employers should consider communicating with their employees about the new law in advance, especially if employers will be making payroll deductions in the coming months. It is also prudent to explain the maximum wages that the NY PFL will provide – many employees may assume “paid family leave” means that they will receive full wages while on leave.

It is also important for employers to train managers and human resources personnel on the NY PFL so that it is properly implemented. Employers should train key staff on the details of NY PFL, as well as the interaction between the NY PFL and other types of leave. As we have discussed above, NY PFL has some similarities to the FMLA, but also has distinct differences, such as eligibility requirements and coverage.  Employers should be careful not to assume that the two laws cover the same events.  For example, leave under the NY PFL cannot be taken for an employee’s own serious health condition, while FMLA leave can.  This means that a pregnant employee may take up to 12 weeks of FMLA leave, and then take additional leave under the NY PFL to bond with her child.

Employers should stay tuned for continuing developments as the NY PFL is interpreted by the courts. In addition, New York State published updated regulations at the end of May, for which the comment period recently closed.  We expect that the State will issue updated guidance and/or revised final rules in response to these comments.

Jessica Rothenberg