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Month: March 2016
FMLA Q&A – Recovery of Premiums
In our practice, we regularly receive questions regarding the Family Medical Leave Act (FMLA). Here is the first in a series of FMLA Q&A based on our clients questions and concerns regarding the FMLA.
An employee went out on leave, never came back, and now owes us money for the benefits. Looking for guidance on next steps as the employee is not responding to letters. Can you let us know your thoughts?
Under the FMLA, an employee who is provided group health insurance is entitled to continue coverage during FMLA leave on the same terms as if he or she had continued to work. This also extends to dependent coverage. The employee is responsible to continue making his or her normal contribution to the cost of the health insurance premiums. If paid leave is substituted for FMLA leave, the employee’s share should be paid in the manner normally required during paid leave (e.g. payroll deduction).
An employee on unpaid FMLA leave must make arrangements to pay the normal employee portion of the insurance premiums. The method of payment should be communicated in your company’s FMLA policy, and there are a number of options including requiring the employee to submit payment on the date the premium is due, or collecting all of the premiums when the employee returns from leave. It is important to carefully document when these payment are expected because if the employee’s premium payment is more than 30 days late, health insurance coverage may be dropped unless the employer has a policy of allowing a longer grace period.
Under certain circumstances, the FMLA also allows employers to recover the employer’s share of any health plan premiums paid during the period of unpaid FMLA leave, although this is more limited.
Dropping Coverage
As stated above, an employer’s obligation to maintain health insurance coverage under the FMLA ceases if an employee’s premium payment is more than 30 days late, unless the employer has established a policy providing a longer grace period. In order to drop the coverage for an employee whose premium payment is late, the employer must provide written notice to the employee that the payment has not been received. The written notice must be provided to the employee at least 15 days before coverage is to cease, and must clearly notify the employee that coverage will be dropped on a specified date at least 15 days after the date of the written notice unless the payment has been received by that date.
In limited circumstances, and only after the 15 days notice has been given, the FMLA also allows employers to drop employee coverage retroactively, but this is limited only to circumstances where the employer has established policies regarding other forms of unpaid leave that provide for the employer to cease coverage retroactively to the date the unpaid premium payment was due.
Recovery of Employer’s Share of the Premium
In limited circumstances the employer also has the option of recovering from the employee its share of health plan premiums paid during the period of unpaid FMLA leave. However, this can only happen if the employee fails to return to work after his or her unpaid FMLA leave entitlement has been exhausted, and only if the employee’s failure to return is not for one of the following reasons:
- Circumstances beyond the employee’s control; or
- The continuation, recurrence or onset of a serious health condition of the employee or the employee’s family member, or a serious injury or illness of a covered servicemember, that would otherwise entitle the employee to leave under FMLA.
If the employee’s failure to return to work is based on the continuation, recurrence or onset of a serious health condition of the employee or the employee’s family member, or a serious injury or illness of a covered servicemember, the employer may require supporting medical certification of the condition. If the employee does not provide the certification in a timely manner (within 30 days), or the reason for not returning to work is due to other circumstances beyond the employee’s control, the employer may recover all of the health benefit premiums it paid during the period of unpaid FMLA leave.
Recovery of Employee’s Share of Premiums
Finally, when an employee fails to return to work, any health and non-health benefit premiums that the FMLA permits an employer to recover are considered a debt owed by the employee to the employer.
Methods of Recovery
To the extent recovery is allowed, the employer may recover the costs through deduction from any money due to the employee, provided such deductions do not otherwise violate applicable Federal or state wage payment or other laws. Alternatively, the employer may initiate legal action against the employee to recover such costs.
Any employer debating attempting to recover health insurance plan premiums from employees should carefully weigh the pros and cons before doing so. The FMLA does not operate in a vacuum, and employees will likely be protected by other state and federal laws. As a general rule, the law that provides an employee with the most protection applies, so a deduction seemingly allowed by the FMLA may still be unlawful if it violates a state wage and hour law. Employers must be thoughtful of the intersection of these laws. To avoid a situation where you are trying to collect the employee share of the premiums from an employee who fails to return from FMLA, along with the notice of FMLA eligibility, consider sending a notification to employees alerting them of the date their premiums are due, and requiring employees to pay their share of the premiums on that date, rather than paying the premiums and attempting to collect when the employee returns.
As always, this blog is by necessity very general and cannot replace targeted legal advice. If you have specific questions, please reach out to us. We are here to help.
New Overtime Rules Are Officially On The Way
The long awaited changes to the FLSA Overtime rules are one step closer to becoming the law. The Final Rules were sent to the White House’s Office of Information and Regulatory Affairs (OMB) on Tuesday. If the OMB follows its normal review timeline, the Final Rules should be approved in four to six weeks. This means we will see the new overtime regulations by May.
Why the sudden confidence that we will actually see these proposed rules in May? If the Final Rules are not released by mid-May, the rule will likely be at the mercy of the next Congress and president. These overtime regulations are viewed by this administration as a major achievement, and the result of a two year old Executive Order. A Republican president would almost certainly veto them.
Despite the sped up timeline, the DOL has not given any indication that it intends to extend the length of time it will take for the rules to take effect. It still appears that the plan is for the rules to take effect 60 days after being published. This means employers will have 60 days to reclassify employees or raise salaries.
Consider the following:
Audit your job classifications now. If you have exempt employees earning less than $50,440.00 per year, and you haven’t already started exploring a change, now would be a great time to start. One option is to re-assign non-essential duties, reclassify the employee as nonexempt, and limit overtime opportunities. Another is to add additional duties and be prepared to raise the salary in order to maintain the exempt status.
There is a chance the DOL will adopt a lower salary threshold, some have suggested $40,000, but the only firm number we know at this point is the $50,440.00 – the number published in the proposed regulations. We recommend being prepared for the worst, and hoping for the best.
Audit job descriptions. There is a chance that the Final Rules will also feature a new duties test. The test the DOL is considering is known as the California Test, which is arguably a more straight forward test. The California test is a quantitative one, if an employee spends more than 50% of his or her time on exempt duties, he or she is exempt.
Even if the new duties test is not adopted, no employer will regret performing an audit of job descriptions. A well written job description that accurately reflects the essential functions of a position is a great tool for a wide variety of functions ranging from performance reviews to disability claims.
Vermont Becomes the 5th State to Mandate Paid Sick Leave
On March 9, 2016, Vermont became the fifth state to guarantee paid sick days to employees. Commencing January 1, 2017, Vermont’s new law will require employers to provide earned sick time at the rate of at least one hour of leave for every 52 hours worked.
Unlike the mandatory sick leave laws passed in California and Massachusetts last year, Vermont’s law will roll out the number of paid hours mandated. For 2017, employers must provide employees with at least 24 hours (3 days) of earned sick time in a 12-month period. After December 31, 2018, employers will be required to give employees at least 40 hours or five days of earned sick time in a 12-month period.
One Year Waiting Period: In 2017, employers with five or more employees who work at least 30 hours per week, may institute a one-year waiting period during which all existing employees will earn sick leave, but will not be able to use accrued sick leave. These employers may also institute a one-year waiting period for new employees during which they must be able to earn but will not have access to paid time off.
Employers with fewer than five employees who each work at least 30 hours per week will be subject to this law as of January 1, 2018. At that point, they may institute a one-year waiting period for their employees during which time their employees must be able to accrue, but not have access to paid time off.
Exemption for New Employers. Although the new law applies to all employers, there is a new employer exemption that delays compliance until one year after the employer hires its first employee.
Employees Excluded From Coverage: The earned sick time requirements do not apply to the following groups of employees:
- Employees under 18 years of age.
- Employees who work fewer than 20 weeks/year
- Employees who work fewer than 18 hours/week (average)
Sick Time Usage: Paid sick time may be used by an employee for any absence from work necessitated by any of the following:
(1) The employee’s physical or mental illness or injury.
(2) Obtaining professional diagnostic, preventive, routine, or therapeutic health care for the employee.
(3) Caring for a sick or injured parent, grandparent, spouse, child, brother, sister, parent-in-law, grandchild, foster child including helping that individual obtain diagnostic, preventive, routine, or therapeutic health treatment, or accompanying them to an appointment related to long-term care.
(4) The employee is arranging for social or legal services or obtaining medical care or counseling for the employee or their family member (as described in the above list) who is a victim of domestic violence, sexual assault, or stalking.
(5) The employee needs to care for a family member (as described in the above list) because the school or business where that individual is normally located during the employee’s workday is closed for public health or safety reasons, such as a snow day or public health closure.
Tracking Leave: Employers must allow employees to accrue leave at least as rapidly as one hour of leave for every 52 hours worked.
Notice: Employees must be able to call in for their own illness or that of a child or family member. However, employers may require advance notice for scheduled absences.
Seasonal Employees: Any employee who works more than a total of 20 weeks per year is eligible to earn paid time according to this legislation, as long as they average over 18 hours per week.
Existing Policies: Existing PTO, sick leave, and vacation policies will be considered in compliance with the law provided they meet the law’s requirements.
The Do’s and Don’ts for I-9 Verification
The Justice Department recently announced that Postal Express Inc., a delivery and logistics company operating in Washington, Oregon and Idaho agreed to pay a civil penalty to settle a discrimination claim brought by a foreign-born employee who was suspended after the company improperly demanded he present a new green card.
The DOJ investigation revealed that Postal Express improperly required the employee, a lawful permanent resident, to present a new permanent resident card (green card), and suspended him when he failed to do so. Earlier this year, the DOJ announced a similar settlement of a claim against retailer Abercrombie & Fitch Inc. The department’s investigation found that Abercrombie required a non-U.S. citizen to produce a green card as proof of her immigration status for the purpose of verifying her employment eligibility, while not requiring U.S. citizens to do the same.
If your palms are sweating as you read this, you’re not alone. States are passing laws that impose significant fines on companies that employ undocumented workers. At the same time, the immigration system in the U.S. and the many documents and agencies involved is confusing for both employees and employers attempting to verify work status. The federal government’s E-Verify system for checking an employee’s work eligibility is not always reliable and can be difficult to navigate. Furthermore, while E-Verify is mandatory for private employers in seven states, it remains voluntary elsewhere, and in California government enforcement of the system is illegal.
The long and short of it is that the Immigration Reform and Control Act of 1986 (IRCA) prohibits employers from hiring and employing workers when the employer knows the workers are not authorized to work in the United States. Employers are also prohibited from continuing to employ an individual knowing that he or she is unauthorized for employment. At the same time, under the Immigration and Nationality Act, employers are prohibited from requesting unnecessary work authorization documents or demanding specific documentary evidence based on citizenship status or national origin when verifying employment status. This creates a tangled web for employers where HR and hiring manager must balance the fear of hiring an employee without proper authorization against the fear of requesting improper documentation in the process. It is easy to see how an HR professional or hiring manager, acting out of fear of inadvertently hiring an individual without proper authorization could misstep and violate an applicant’s rights, while only attempting to protect the company.
So what is an employer to do?
The steps below may help:
- Provide all news employees with the complete I-9 form, including instructions for completion.
- If an employee submits documentation of work eligibility that appears to be genuine, accept it.
- Conversely, reject any document that does not appear to be genuine or related to the employee.
- Allow employees the choice of what documentation to produce from the list included on the I-9 form. Do not demand a U.S. passport or “green card.
Easy enough, right? Maybe. Maybe not. In case it isn’t clear, here is a DO NOT list provided by the United States Citizenship and Immigration Service. Do not do any of the following:
- Do not demand that an employee show specific documents because of his or her national origin, ethnicity, immigration or citizenship status, race, color, religion, age, gender or disability, or because of any other protected characteristic. This means no requesting specific documentation from Homeland Security because an employee isn’t a U.S. citizen, or requiring a passport as proof of identity from a U.S. citizen because his or her name sounds foreign.
- Do not refuse to accept an employee’s I-9 documentation or refuse to hire the employee because of an unfounded suspicion that the document is fraudulent.
- Do not treat employees or applicants differently than other applicants because he or she is, or you believe him or her to be a U.S. citizen or non-citizen.
- Do not ask to see employment authorization documents before you hire an applicant or before the applicant completes the Form I-9.
- Do not refuse to accept an employee’s I-9 document or refuse to hire him or her because the document expires in the future..
- Do not limit jobs to U.S. citizens unless U.S. citizenship is required by law or government contract.
- Do not demand a specific document when re-verifying that an employee is authorized to work. Remember, employees may present any document either from List A or from List C to demonstrate that they are still authorized to work.
- Do not retaliate against an employee for complaining about discrimination or otherwise asserting the employee’s rights under the law, contacting the Office of Special Counsel for Immigration-Related Unfair Employment Practices, Civil Rights Division, or the Equal Opportunity Commission for assistance or to file a complaint, or for participating in an investigation or lawsuit on behalf of an alleged victim.
Finally, proper employee training and policies are the best way to stay on the right side of the law here.
Progress?
By Tim Kenneally – March 9, 2016
The 2016 FAA Reathorization Act (AIRR Act) is pending before Congress. Advocates of commercial drone use are both praising the advances codified in the AIRR Act and bemoaning the absence of others. Among the advances included in the AIRR Act are provisions that will allow for permitting based on risk thereby eliminating case-by-case certification. The AIRR Act calls for the creation of a UAS traffic management system. The Act also includes a “micro drone” classification that will not require a pilot’s license. If approved, the AIRR Act will represent progress toward a system in which commercial use of drones is more orderly, safer and easier.
Unfortunately, the AIRR Act does not go far enough. The commercial industry wanted the AIRR Act to permit operation of UAS beyond the visual line of sight of the operator. The Act as drafted does not permit such operation. Unless and until the Act is expanded, companies looking to perform deliveries and other long distance UAS commercial activities face significant hurdles within the current system.
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On February 24, 2016, the Federal Aviation Association (FAA) announced the establishment of an Aviation Rulemaking Committee intended to make recommendations for the safe operation of certain Unmanned Aircraft Systems (drones) over people “not directly involved in the operation of the aircraft.” The FAA has advised that it has a “significant interest in expanding commercial access” for drones, and is committed to a “flexible regulatory approach” that both “accommodates innovation” and maintains “high levels of safety”. The Committee, which includes “industry stakeholders” is expected to issue its recommendations quickly as it has only been chartered through April 30, 2016. The creation of this Committee suggests a commitment on the part of FAA to develop regulations that will allow for expanded business usage of drones.
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[1] https://www.faa.gov/news/press_releases/news_story.cfm?newsId=20015
Workplace Law, Helping Employers 