Fixing dysfunctional family leave

Fixing dysfunctional family leave – Family and Medical Leave Act

Alicia Ault Barnett

Four years after the Clinton administration claimed passage of the Family and Medical Leave Act as an early victory in domestic policy, employers are still struggling to fit it into their benefit structures. Human resource professionals call the 1993 law an administrative nightmare and complain that a provision allowing intermittent leave in increments as small as an hour (and in some cases even less) is wreaking havoc on productivity and employee morale.

FMLA requires employers with 50 or more workers to allow employees 12 weeks of unpaid, job-protected leave to care for a newborn or adopted child, take care of their own serious health needs or care for a seriously ill parent, child or spouse. Health benefits must be continued during the leave, at the same contribution level as during regular employment. Workers must have put in at least 1,250 hours in the preceding year to qualify.

Unfortunately, FMLA’s definition of “serious” is vague: “an illness, injury, impairment, or physical or mental condition that involves …inpatient care in a hospital, hospice, or residential medical care facility or…continuing treatment by a health care provider.” Under the law, the seriousness of the condition is supposed to be certified by a health care professional, and, except in emergencies, employees are required to request leave 30 days in advance. In practice, however, employees are asking that absences be considered FMLA-eligible after the fact and taking leave, especially intermittent leave, without prior agreement.

Although the law does not require employers to have a written policy, Fran Bruno of Foster Higgins in New York is among the many consultants who think such formality is worthwhile. “When you put it into writing, it forces you to think more clearly about when it will and won’t apply,” Bruno asserts. She adds that many of her clients still seem to be in a fog, especially about how FMLA interacts with their short- and long-term disability policies, workers’ compensation and the Americans with Disabilities Act (ADA). The integration of time off and sick leave benefits is a huge area of confusion, agrees Jenny Emery, the Hartford, Conn.-based practice leader of total health and disability management for Towers Perrin.

The government, however, views FMLA as a successful venture into creating more employee-friendly workplaces. “It eliminates the Hobson’s choice between the job that most workers need and the families that most workers love,” says Bernard Anderson, assistant secretary for employment standards administration at the Department of Labor (DOL). There is little or no evidence, he maintains, that FMLA has “created unreasonable administrative headaches or hampered employee productivity.”

INTERMITTENT LEAVE: THE BIGGEST HEADACHE

Companies that deal with FMLA on a day-to-day basis have a different take. The Society for Human Resource Management (SHRM) recently surveyed its 78,000 members on the effects of the law. They consider it an administrative horror, SHRM spokesman Barry Lawrence says.

Three years after FMLA went into effect, six out of l0 HR professionals said their firms were still spending huge amounts of time and money putting it into practice, Lawrence reports. A quarter of the respondents termed compliance with the law “very difficult” or “somewhat difficult.” Half said their company had not benefited from FMLA and that they had had employees who did not return to work after taking leave.

By far the biggest problem is intermittent leave. The law allows intermittent leave by prior agreement between employer and employee, in increments of an hour or more, for serious medical needs such as going for chemotherapy treatments or taking an injured child to physical therapy. But if a company accounts for workers’ time in increments of less than an hour, FMLA leave may also be taken in shorter bits, Lawrence says. Employees whose schedule is divided into eight-minute segments–factory workers who punch time clocks, for instance–can use FMLA to take time off in such small chunks, he claims, making it next to impossible for managers to maintain control.

Even where absences occur in larger blocks, employers complain that intermittent leave means they can’t keep track of workers’ comings and goings, Lawrence says. This reduces productivity and hurts morale, as employees see colleagues leaving throughout the day for no apparent reason.

One in four survey respondents identified the administrative costs of tracking leave as burdensome. Other FMLA-associated costs include hiring and training replacement workers, cited by 36 percent; continuation of health benefits, mentioned by a third, and time spent to explain the law, which one in four identified. One in five expressed concern about the cost of overtime pay for workers not on leave. The findings show that there is no one overwhelming cost, Lawrence says; it’s more like “being pecked to death.”

The U.S. Department of Labor’s Commission on Leave did its own survey of FMLA’s impact, released last year. Its major finding–that businesses report compliance with the Family and Medical Leave Act “entails no costs or only small costs”–is the polar opposite of SHRM’s. Still, the costs incurred by those responding to the government survey were in the same areas SHRM found. Large employers, the commission said, are more likely to have increased costs because they have more leave-takers.

When SHRM asked employers what parts of the law they would like to see changed, 54 percent asked for a tighter definition of “serious health condition.” Forty percent requested increments of leave to be no shorter than half a day, and 33 percent would eliminate intermittent leave entirely. Another third wanted to revise the rules about when and how workers notify employers of plans to take leave.

Respondents found other drawbacks: Many firms said the constraints of a government-mandated leave policy interfere with their ability to be flexible. Others contended that the law has curtailed their generosity. And some feared that they–and the law–are shortchanging single and childless workers. Still, given the chance, only one respondent in five would repeal FMLA.

COMPLAINTS CENTER ON JOB LOSS

Employers get tripped up the worst when they don’t make appropriate accommodations for workers who return from leave. By law, they have to offer returnees either their old job or an equivalent position with equal pay.

The Department of Labor’s latest report, covering the period from FMLA’s enactment through Sept. 30, 1996, shows the vast majority of complaints–58 percent–involve employers’ failure to comply with the reinstatement provision. Trailing in the distance are complaints about firms’ failure to grant FMLA leave, at 18 percent; discrimination against an employee who took leave, at 16 percent; and failure to maintain health benefits, at 7 percent. Of the $5.7 million paid out to workers since the law took effect, at least $3.5 million went to job restoration and damages.

Overall, however, complaints and lawsuits have been rare. To date, the DOL’s Wage and Hour Division has received about 6,000 complaints against employers, surprisingly few given the estimated 65 million workers the act covers. Nine out of 10 complaints have been resolved without court action; the remainder are under review for potential litigation. In most cases, once violations were identified, employers either granted the leave, restored benefits and granted monetary damages to workers or paid back wages and damages–with or without job restoration. The DOL has only taken legal action in 16 cases. The results? Four settlements, one dismissal, and 11 cases pending.

Assistant secretary Anderson cites several reasons for the scarcity of suits. First, he believes that many workers still aren’t aware of their FMLA rights. Second, many of those who are aware of them can’t afford to take unpaid leave. Finally, Anderson thinks it’s an indicator of the simplicity and effectiveness of the law, which the DOL regards as a great success. The only problem is FMLA’s low profile among the U.S. workforce. In response to a survey showing that fewer than six workers in 10 had even heard of the law, the Department of Labor recently instituted a toll-free public information number, 800-959-FMLA.

TOUGH TO ADMINISTER

At Southwest Airlines and Hallmark Cards, two firms often cited for treating employees well, benefits managers say they’ve seen absences rise and management-worker relationships deteriorate in the wake of FMLA.

Southwest, which has a work force of 25,000, has gone to great lengths to implement the law, according to vice president of people Libby Sartain. The firm, which used to have one person administering leave, has created a whole new department to coordinate FMLA, workers’ compensation, disability and the ADA, she says. Managers route leave decisions to the new department, to reduce the risk of making the wrong move. “There’s a whole flow chart” that Southwest developed to determine employee leave parameters, Sartain says.

Southwest has overlaid its formal FMLA policy on existing leave practices. Workers are allowed to take up to 12 days a year of sick leave (they can accumulate up to 140 days) and 12 days for “floating holidays,” since airline workers normally work on holidays. Any of this paid time can be applied toward medical leaves of up to 90 days or personal leaves of up to 30 days. Employees are also given a certain number of opportunities to come into work late or leave early to attend to family emergencies.

The firm attempts to get workers to take FMLA leave concurrently with other paid or unpaid leave, says Sartain. But with 700 to 800 employees on leave at any given time, it’s hard to coordinate. Because it often takes time to certify that a leave is for a serious health condition, it’s tough to track whether the absence is FMLA-eligible, falls under another policy or is unauthorized. And, Sartain notes, so many workers take advantage of the intermittent allowances under the Family and Medical Leave Act that it’s hard to control attendance.

Similarly, Hallmark Cards, which has about 12,000 full-time workers, has had trouble reconciling FMLA with its generous leave policies. Hallmark already offered up to six months for disability at full pay, including maternity leave. Workers are also eligible for up to two years of long-term disability, at 50 percent of their pay, and m some situations, may be able to draw this benefit until they are 65.

Teresa Hupp, formerly a member of the Kansas City-based firm’s legal department and now HR director of its manufacturing division, initially thought implementation would be no problem. Instead, says Hupp, “it has been the most difficult employment law to implement in my 17 years of experience.”

At Hallmark, FMLA must be taken concurrently with short-term disability (there is no separate sick leave policy), which means that personal FMLA leave is paid. That’s not the administrative difficulty, though. Trying to account for employees’ time is. Absences for recurrent problems that formerly would have been charged against attendance can no longer be counted, according to Hupp, because employees can claim them as intermittent leave under FMLA. Total illness time has risen by 50 percent in the last two years, she claims, but admits she can’t definitively pin this on FMLA.

“In my mind, it has turned upside down how companies manage attendance,” she adds. Like Sartain, Hupp complains about the process of certifying that an absence was due to a serious health condition, saying it allows some workers to take leave and certify it after the fact. That makes it difficult to plan, she says.

Both Hupp and Sartain, who are members of SHRM’s FMLA Technical Corrections Coalition (See the box on the opposite page.), would like to see changes in the law, including a more stringent definition of what counts as a serious health condition. Both also want a modification of the intermittent leave allowance. Sartain believes that anything less than two weeks’ duration should not be considered FMLA leave.

BE PROACTIVE, CONSULTANTS SAY

Employers may be developing a FMLA wish list, but consultants say they should take steps to ensure that they comply with the law now to avoid being caught in evolving litigation. Bob Lipp, an employment attorney with Franklin & Gringer, PC in Garden City, N.Y., says that it is only a matter of time before suits begin winding their way through the courts.

Lipp sees two areas of exposure: If the lines of communication break down between employers and workers about rights and responsibilities, and if workers believe that they are being retaliated against for taking leave. “It’s unfortunate” that these cases may begin coming to trial, says Lipp, “because you should be able to craft a policy that’s doable, lawful and fair to employees.”

To stay out of trouble, attorneys and consultants offer the following advice:

* Get a written policy in place, one that explains both FMLA leave rights and how the law dovetails with the company’s own leave policies. And apply the policy consistently. Towers Perrin’s Emery says she has seen headquarters and outlying business units apply different standards, causing administrative headaches and creating liability exposure.

* Make sure FMLA leave is concurrent with any paid leave–and that it is certified as FMLA-eligible as soon as possible. “You want to get that period running as soon as it becomes clear that the person qualifies for FMLA, to protect yourself from a claim that you didn’t allow it,” says Foster Higgins’ Bruno, and employers often don’t file the forms to certify absences soon enough.

* Become proactive about managing FMLA-mandated leave. Don’t wait until you “think there is a problem that needs to be solved,” Emery advises. Sure, the law can be burdensome and create the impression that absences are unmanageable, she says. But it’s simply “an example of what you get when the government tries to legislate good management.” FMLA can be managed successfully along with other benefits, Emery asserts–and urges employers to “bundle” short- and long-term disability policies and family and medical leave.

Future shocks?

Just before he kicked off his reelection campaign, President Clinton promised to expand FMLA. Although the administration has not yet sent legislation to Capitol Hill, Clinton has repeated the pledge, and proposals to give employees an additional three days of leave for community-related functions such as PTA meetings or activities related to child or elder care have been introduced in Congress this year. Deanna Gelak, director of congressional affairs for the Society for Human Resource Management (SHRM), claims that passage of such a measure would mean employers would have to get certification from “soccer coaches and ballet teachers” to verify that employees were attending appropriate functions. Given the difficulty of certifying serious illnesses under FMLA, this new twist could be the straw that breaks the camel’s back. Gelak is leading the charge to rein in FMLA through SHRM’s Family and Medical Leave Technical Corrections Coalition.

The coalition, made up of SHRM members, has been meeting regularly to discuss how to make the act easier to comply with. The problem, says Gelak, is that Congress passed a 14-page law and the Department of Labor “added 300 pages of implementing regulations.”

Gelak expects hearings on FMLA in the current congressional session, but she anticipates that changes in the Fair Labor Standards Act (FLSA), which is also on the Clinton agenda, will get higher priority. The very first bill introduced in the House and the forth in the current Senate session, it would amend the labor law to allow employees to opt for compensatory time in lieu of overtime payment.

COPYRIGHT 1997 A Thomson Healthcare Company

COPYRIGHT 2004 Gale Group