Since March 23, 2010 we have been inundated with issues regarding the Affordable Care Act. Whether it be ACOs (Accountable Care Organizations), exchange subsidies or essential benefits, the media has flooded the market with this information. Because of all the focus on the ACA, employers have lost sight of two Federal programs that have been around for many years: the Family Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA).
The Family Medical Leave Act was effective in 1993 and it requires that employers with 50 or more employees (within a 75 mile radius) must provide 12 weeks of unpaid leave under certain circumstances.
Examples of circumstances when a person may not be able to work:
- due to their own sickness or disability,
- due to the birth of a child and/or to care for the newborn child, and
- due to the placement with the employee of a child for adoption or foster care and/or to care for the newly placed child.
And in other circumstances, time off from work would be required to take an immediate family member (spouse, child or parent, but not a parent “in-law”) for care on an intermittent basis. As an example: an employee who needs to take their child to the doctor for weekly allergy shots.
Since the inception of the program, incidences of employees utilizing FMLA have been on the rise. Due to current lifestyles where two individuals are both employed, FMLA gives these working couples the time to take care of one another or their immediate family member if a medical issue arises. Intermittent leaves are rising even quicker due in part to the “sandwich generation” where employees have responsibility for their children as well as their parents. As an example - an employee’s parent requires transportation to receive chemo therapy; the intermittent leave gives the employee the opportunity to assist their parent.
Since the passing of FMLA in 1993, 12 states and the District of Columbia have passed their own FMLA laws. In some cases states such as California, New Jersey and Washington have paid medical leave for a period of up to 6 weeks. Many employers become confused when determining and understanding what is a proper FMLA leave. A statistic from the Equal Employment Advisory Council in March 2013 states that 48% of employers never deny an FMLA leave request. Clearly, this is a very high percentage that indicates that most employers do not understand the nuances of the act in an appropriate manner. For example: which of the following would qualify for FMLA?
A. Caring for a sick aunt
B. School closings
C. Spouse deployed to active military duty
D. Car trouble
E. Inclement weather
The answer is “C” - the employee would be eligible if the spouse was deployed for active military duty. If 48% of employers are granting leaves that are not required under the Act, then employers’ costs will increase due to unnecessary approvals and the precedents they set.
If the employer provides access to medical benefits while the employee is actively at work, then the employee must still have the same access while on family leave.
Of course, if an employer fails to grant legitimate FMLA leave, then the consequences could become very costly. Based upon a Department of Labor statistic from 2012, the average price to defend an FMLA lawsuit is about $78,000. However, more importantly a financial settlement could cost significantly more than the $78,000 in legal expenses.
Depending upon the size of your firm and the frequency of leaves, administering an FMLA program could produce a severe strain on HR resources. Some employers with high activity have decided to outsource the FMLA leave to an entity that deals with it on a daily basis. In some cases the employer can actually transfer fiduciary responsibility to an outside administrator to handle the program for them. Generally, the cost for such a program could run from $2.50 to $6.00 per month per employee. This could be money well spent to administer a complicated law objectively and correctly.
The Americans with Disabilities Act or ADA began in 1992 and was amended in 2009. Any employer with 15 or more employees is subject to the Act. The purpose of the Act is to protect employees that have disabilities. The list of disabilities has been enhanced over the last few years to essentially cover most major life activities. These activities include seeing, hearing, eating, walking, standing or lifting. Mental activities include concentrating, communicating, reading, or learning. The ADA definition includes major bodily functions such as those involving immune, digestive or respiratory system. For example, if someone with a hearing impairment can hear in the normal range while wearing a hearing aid, this still falls under ADA protection. Temporary episodic impairments also qualify, such as diabetes that affects only internal functions. The major issue employers face is understanding what the process is in order to comply with the ADA.
The first thing the employer must do is to engage the employee and gain an understanding of what the employee expects regarding their workplace environment. Once the employer gains this understanding and conducts individual assessments that the employee’s needs are being met, the entire process from beginning to end needs to be documented. The employer must make reasonable accommodations to help the disabled employee; however, a reasonable accommodation is subject to interpretation by the EEOC/Department of Labor. As an example, enlarging a doorway so the disabled employee may enter it freely would be an approved change, but an employee’s request for the employer to install an elevator may be rejected due to the expense involved with this type of change. Working from home, a shortened workday or a modification of the workplace are just some of the items an employer can do to conform with the ADA. It is important to note that employers should not consider the ADA as one size fits all, it does not. All disabilities must be addressed on a case-by-case basis. All decisions must be made on facts. Speculation on “I thought this is what the person wanted”, will not work.
Employers should allow an employee with a disability to exhaust accrued paid leave first and then provide unpaid leave. For example, if employees are eligible for 10 days of paid leave, and an employee with a disability needs 15 days of leave, the employer should allow the individual to use 10 days of paid leave and 5 days of unpaid leave.
Employees must be able to return to their same position or an equivalent position upon returning from a period of disability if it doesn’t cause undue hardship to the employer.
The ADA requires that employers post a notice describing the provisions of the ADA. It must be made accessible, as needed, to individuals with disabilities. A poster is available from EEOC summarizing the requirements of the ADA and other Federal legal requirements for nondiscrimination for which EEOC has enforcement responsibility. EEOC also provides guidance on making this information available in accessible formats for people with disabilities.
In the Federal budget for 2013, $6 million was allocated for FMLA enforcement and $14 million allocated for enforcement of the ADA. Clearly, the U.S. government is focusing in on stricter adherence of these two laws.
For more information regarding this topic, please contact your local UHY LLP professional or the author of this article:
John DePalma, MPH
Employee Benefits Consulting Services, Inc.