1. Family and Medical Leave Act Update Beth Walker, Esq. July 9, 2008

2. Agenda New FMLA provisions already in effect relating to military service by employees and family members Highlights of the proposed new FMLA regulations (not yet in effect) Q&A

3. FMLA Background Family and Medical Leave Act of 1993 Effective August 5, 1993 Current regulations effective April 5, 1995 have remained unchanged, in spite of several court challenges Department of Labor has been studying the regulations for years, publishing a “report” last year Proposed new regulations published for comment on February 11, 2008 (text in red in slides designates provision of new regs)

4. FMLA Basics Federal law creates minimum standard of 12 weeks of unpaid leave per year with health insurance for certain events Employees must be eligible in order to qualify For most employers, this leave supplements other paid leave available Entitles employee to same or equivalent job upon return from leave FMLA protects employees from retaliation

5. FMLA Employee Eligibility Employed at least 12 months (not necessarily consecutive) Employment prior to a break in service of 5 years or more need not be counted in most cases Worked at least 1250 hours during preceding 12 months Employed at work site where 50 or more employees are employed within a 75-mile radius Military leave period counts toward 12 months/1250 hours worked

6. Reasons for FMLA Leave Birth or adoption of a child or placement of a foster child (“bonding”) To care for child, spouse or parent with serious health condition Employee’s own serious health condition IF unable to work as a result New leave relating to military service “Qualifying exigency” of child, spouse or parent in military (yet to be defined) Extended leave to care for injured family member, expanded to “next of kin”

7. FMLA “Spouse, Child or Parent” Spouse as recognized by State law, including common law marriages (in PA, for example) Parent means biological or “in loco parentis” but not parent “in law” Child means Biological, adopted, foster or step child, a legal ward of a child of a person standing “in loco” parentis” Under 18 or age 18 or older and “incapable of self-care because of a mental or physical disability” New regulations anticipated to deal with care of injured service member who is son or daughter over 18

8. Amount of Leave Available 12 weeks each year, with new one-time 26-week leave for care of injured service member If leave permitted before eligible, the “early start” leave does not count toward the 12 weeks Choice of computation (calendar, anniversary, rolling forward, rolling back) Intermittent leave must be provided except as a result of birth of a child (bonding) FMLA may run concurrent with paid leave (employer or employee option)

9. Holidays Count Employees on leave for an entire week are charged with an entire week of FMLA even if employer closed for holiday If leave taken in increments of less than a week, the holiday does not count as FMLA leave unless the employee was otherwise scheduled and expected to work

10. Overtime Counts Missed overtime must be counted toward FMLA if the employee would otherwise be required to report for duty but for the taking of FMLA leave If SHC limits employee to working 40 hours per week and employee would otherwise be scheduled for 48 hours, employee would be charged 1/6 of a week of FMLA time

11. FMLA Intermittent Leave Issues Intermittent leave or on a reduced leave schedule must be permitted except for “bonding” leave No limit on length of intermittent leave, but must be permitted in the increment of the shortest period of time that employer’s payroll system uses to account for leave, provided it is one hour or less Although this leave is of great concern, proposed regs do little to deal with the challenges

12. Paid Leave Substitution Clarification If paid leave available for leave available under FMLA, employer may require substitution of paid leave (or employee may request substitution) Employer must clearly inform employee if paid leave has more procedural requirements than FMLA, those requirements apply only to paid, not FMLA, leave Although substitution of paid leave for unpaid leave is not applicable when employee receiving disability benefits during FMLA leave, employer and employee may agree to run paid leave concurrently with FMLA to supplement disability benefits

13. FMLA Substitution of Paid Leave If requirements of leave plan (such as STD) are more stringent than FMLA, employee may choose not to meet more stringent requirements than FMLA and simply take FMLA leave unpaid If employer or employee requires substitution of paid leave and the requirements for such paid leave are less stringent than FMLA, employee need only comply with less stringent requirements DOL proposes to eliminate this provision

14. “Serious Health Condition” (SHC) Inpatient Care Continuing Treatment More than 3 days incapacity PLUS treatment twice or more OR continuing regimen Pregnancy or prenatal Chronic serious health condition Condition with no effective treatment Multiple treatments Continuing treatment requirements for 3+ days and chronic conditions Clearer certification form (15 calendar days to return) and relaxed rules on contacting physician for clarification Leave for substance abuse must be under care of health care provider or on referral

15. FMLA Employer Designation Current Single designation (DOL form) must include That leave counts again FMLA entitlement Medical certification requirement, if any Right to elect paid leave Any requirement of use of paid leave Premium co-payment obligations Any fitness for duty requirement Right to reinstatement Potential liability for premiums “Key employee” designation, if any Two new forms proposed first for “eligibility” notice and then “designation” notice New 5-day designation requirement

16. FMLA Return to Work Rights Employee must be reinstated to same or “equivalent” position upon conclusion of leave No penalty (such as “points” or non-eligibility for non- performance bonus or loss of seniority) may be imposed Limit eligibility for goal-based bonuses including attendance bonuses if applied similarly to other types of leave Employer may require an employee on FMLA leave to report periodically on the employee’s status and intent to return to work Employee may not be required to take more FMLA leave than necessary

17. Practical Considerations The leave required by these laws is a statutory right, even if co-employees believe the employee is being unfairly favored Managers must protect the rights of the injured or ill employee, including being alert to retaliation by fellow employees Managers must refuse to discuss the medical situation of employees with other workers

18. Practical Considerations The key to managing employees believed to falsely claiming FMLA is careful administration and coordination FMLA administrator should routinely “audit” medical certification forms to identify need for new certification or recertifications Regular training, especially for new managers, is essential