Important Policy Updates from the U.S. Department of Labor

By Samantha Halem, Samuel Gates   March 1, 2024

Important Policy Updates from the U.S. Department of Labor

The U.S. Department of Labor (DOL) recently made important policy updates addressing how it will enforce two key statutes under its domain, the Family and Medical Leave Act (FMLA) and the Fair Labor Standards Act (FLSA). These policy adjustments will affect all employers and are still relevant even in situations involving an employee located in a state offering more generous paid leave laws or stricter independent contractor requirements, such as Massachusetts, California, New York, and New Jersey.

New Fact Sheets on FMLA Requirements

  • Fact Sheet 28D: sets forth in clear terms an employer’s notice obligations when informed that an employee may need FMLA qualifying leave, and the consequences for not providing the required notices. This fact sheet reiterates what we have always told clients: regardless of the reason for a covered leave, even if the employer has already decided to give the leave, the employer must follow the notice requirement or risk not having the leave be credited against their statutory obligations. An employer should provide detailed notice letters with links to the required documentation each and every time an employee requests a leave of absence, in all situations, including intermittent leave, and including in cases where the employee is not actually eligible for the leave (in such cases the notice informs the employee that they are not eligible and why).
  • Fact Sheet 28E: sets forth how an employee must provide their employer with notice of FMLA leave. Although this fact sheet reiterates what we have long known—that an employee need not specifically request an “FMLA Leave”—the employee must provide sufficient information to allow the employer to determine that the requested leave may be covered by the FMLA. For example, an employee who tells their employer that they need to quit their job to care for a terminally ill family member must be alerted that their situation may qualify for leave under the FMLA.
  • Fact Sheet 28H: an employee is entitled to twelve weeks of leave per year. This fact sheet reminds the employer of the four methods available for defining a 12-month FMLA “leave year.” With a limited exception, the employer may select any one of the four methods to establish the 12-month period, so long as they use the same 12-month period for all employees, and if the employer fails to select one of the four methods discussed above, the employer must use the 12-month period that is the most beneficial to the employee.
  • Fact sheet 28I: an eligible employee has the right to use up to 12 workweeks of FMLA leave in a 12-month period. This fact sheet sets forth in detail how to count the amount of leave available and amount of leave used under the FMLA.
  • Fact Sheet 28L: addresses the rarely applicable rules for situations where both spouses work for the same employer and how those circumstances may reduce available eligibility.

Final Rule on Independent Contractor Classification

The DOL rescinded its previous rule on classifying workers as independent contractors and published a new, final rule effective March 11, 2024.  The final rule sets forth how to determine whether a worker is an employee or an independent contractor under the FLSA and may significantly impact business operations and personnel policies.

Nuts and Bolts of the Final Rule:

  • Economic Reality Test: The final rule reaffirms the use of the longstanding “economic reality” test to determine a worker’s status under federal law. The ultimate inquiry is whether the worker is economically dependent on the employer for work (and is therefore an employee) or is in business for themself (and is therefore an independent contractor).
  • Six Relevant Factors: Unlike the previous iteration, the final rule does not assign degrees of importance to the relevant factors. Instead, employers should consider all of the following:
    • Control: The nature and degree of employer’s control over the work.
    • Opportunity for Profit or Loss: The worker’s opportunity for profit or loss depending on managerial skill.
    • Skill and Initiative: The amount of skill required for the work.
    • Permanence: The degree of permanence of the working relationship between the worker and the potential employer.
    • Importance to the Business: Extent to which the work performed is an integral part of the employer’s business.
    • Investments: Investments (usually capital or entrepreneurial in nature) by the worker and the potential employer.
  • Totality of the Circumstances: This is a departure from previous guidance because employers are now required to conduct a “totality of the circumstances” analysis of a worker’s economic reality. No single factor is determinative, and all factors must be considered in the context of the particular employment relationship.  The list of factors is also non-exhaustive—other factors may be considered where relevant to an assessment of economic dependence.

Implications for Employers:

The final rule reflects the DOL’s more pro-employee approach to worker classification and employers should review their current classification practices in light of the final rule to ensure they are properly classifying independent contractors under the FLSA.  Misclassification of workers can lead to legal challenges, including claims for unpaid wages, overtime, and benefits. Employers should take proactive steps to mitigate the risk of misclassification and may need to review and potentially revise their agreements with workers to accurately reflect their classification status.

Employers with workers in states utilizing the so called “ABC Test” for independent contractors, such as Massachusetts, California, Illinois, and New Jersey, must continue to abide by the even stricter requirements. 

For Questions / Compliance

If you have any questions about the U.S. Department of Labor policy updates, please contact:

Happy 20th Birthday to the Family and Medical Leave Act (FMLA)

By Catherine Reuben   February 25, 2013

February 4, 2013 marked the 20th anniversary of the signing of the Family and Medical Leave Act (FMLA). Right around that time, the Department of Labor (DOL) announced the following developments:

i. the creation of an updated FMLA poster, effective March 8, 2013 (which can be downloaded here);
ii. the release of the findings of a survey entitled Family and Medical Leave Act in 2012: Final Report; and
iii. the publication of updated FMLA regulations that address the 2010 statutory expansions to military FMLA leave and the 2009 statutory expansions of leave applicable to airline flight crew employees.

 

New FMLA Poster

As you may know, the FMLA applies to private employers with 50 or more employees and it requires all covered employers to prominently display a poster explaining the provisions of the FMLA and telling employees how to file a complaint concerning alleged violations of the FMLA. With the implementation of the updated regulations, the DOL has issued an updated FMLA poster that addresses the changes to military leave and leave for airline flight crew members. The poster can be downloaded by clicking here. Employers who are covered by the FMLA should replace their current poster with the new version by March 8, 2013.

Release of Findings of FMLA Survey

The DOL released findings of a survey entitled Family and Medical Leave Act in 2012: Final Report. In its press release about the survey, the DOL asserts that the FMLA has had a positive effect on the lives of millions of workers and their families without imposing an undue burden on employers. According to the survey:

– Thirteen percent of the employees surveyed took leave for a qualifying FMLA reason in the past year, which is the same percentage reported in 2000.  Most of those leaves (57%) were due to the employee’s own illness. Twenty-two percent took leave due to pregnancy or a new child, and 19% took leave due to the illness of a qualifying relative. Other qualifying leaves, including leave for military reasons, were rare (2%).
– Nearly half of all leaves (42%) were for 10 days or less. Only 17% were for more than 60 days.
– Most employers covered by the FMLA reported little difficulty with FMLA compliance. Larger employers were more likely to report difficulty with compliance. Thirty percent reported that the administrative cost of compliance is rising.
– Less than 10% of work sites perceived negative effects of compliance with the FMLA on employee productivity, absenteeism, turnover, career advancement, morale and profitability; however, larger companies were more likely to report such negative effects.
– Only about 3% of employees reported taking intermittent leave. Reports of negative impacts on profitability and productivity due to intermittent leave were rare (6%), though significantly higher for larger employers.

If we were to conduct a similar survey among HRW clients, we suspect that that the results might be less rosy than those reported by the DOL. In particular, a number of our clients have experienced negative business impacts due to (a) unpredictable intermittent FMLA leave, (b) situations where multiple employees from a single department take leave at the same time, and (c) suspected FMLA fraud (e.g., an employee is denied a vacation request, and then applies for FMLA leave during the same timeframe).

Updated FMLA Regulations: Military and Airline Flight Crew Leave

On March 8th, two statutory expansions of the FMLA will go into effect: the National Defense Authorization Act for Fiscal Year 2010 (FY 2010 NDAA) and the Airline Flight Crew Technical Corrections Act (AFCTA). The FY 2010 NDAA provides families of eligible veterans with the same job-protected FMLA leave currently available to families of active military service members. It also enables more military families to take leave for activities that arise when a service member is deployed. AFCTA expands existing rules to better enable airline personnel and flight crews to make use of the FMLA’s protections. Key provisions of the new regulations include the following:

– Covered veterans are limited to those discharged or released under conditions other than dishonorable in the five years prior to the date the employee’s military caregiver leave begins.
– Qualifying exigency leave is extended to employees who are family members of the regular armed forces.
– Military members must be deployed to a foreign country in order to be on “covered active duty” under the FMLA.
– A special, more flexible definition of “serious injury or illness” is created for current service members.
– The amount of time an employee may take for qualifying exigency leave related to the military member’s Rest and Recuperation (R&R) leave is expanded from five days to fifteen days.
– The regulations create an additional qualifying exigency leave category for parental care leave necessitated by the covered active duty of the military member for the military member’s parent who is incapable of self care.
– Periods of absence from work due to military service covered by USERRA (Uniformed Services Employment and Reemployment Rights Act) count in determining an employee’s eligibility for FMLA leave.
– Where it is physically impossible for an employee to start or end work mid-way through a shift, the entire period of time the employee is forced to be absent can still be counted as FMLA leave; however, this provision is to be applied only in the most limited of circumstances.
– The record-keeping requirements are updated to specify the employer’s obligation to comply with the confidentiality provisions of the Genetic Information Non-Discrimination Act (GINA).

HRW can assist employers with all aspects of FMLA compliance, including practical strategies for addressing complex or disruptive leave situations. Contact Catherine Reuben or David Wilson if we can be of further assistance at (617) 348-4300 or by emailing creuben@hrwlawyers.com or dwilson@hrwlawyers.com.

Photo Credit: http://www.caregiving.com/wp-content/uploads/2013/01/FMLA3.jpg

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