A Game Changer: DOL Releases New ERISA Disability Claims Rules

By Marti Cardi, VP-Product Compliance

Claimants under ERISA disability plans will soon have a better chance to understand and contest any denial of disability benefits.  After years of litigation flowing from disability benefits denials, the U.S. Department of Labor decided it was necessary to re-examine the ERISA regulations governing the handling of disability benefits claims. Section 503 of the Employee Retirement Income Security Act (ERISA) requires every employee benefit plan to:

  • Provide notice in writing in understandable language explaining the specific reasons for the denial of a claim, and
  • Provide an individual with an opportunity for a full and fair review of the denial.

On December 16, 2016, the DOL issued a Final Rule amending the regulations governing claims handling procedures for ERISA disability claims filed on or after January 1, 2018.  The Final Rule allows plans a year to conform their claims handling procedures – and a good thing that is!  The new rule and its explanatory preamble are heavy slogging indeed – measuring a full 28 pages in the Federal Register’s typical small print – and will require plans to revamp their denial procedures and communications, and likely the terms of the plans themselves.

The revised regulations themselves are a short 3 pages, but the preamble is a must-read for those deeply involved in disability claims administration.  The preamble discusses the comments received by the DOL during the public comment period and the Department’s rationale for the positions it has taken in the Final Rule.  Thus, it provides significant assistance in understanding the new rules and how the DOL will interpret them.

Key Changes at a Glance
Here is a summary of the major changes to the ERISA regulations, which will apply to new disability claims filed on or after January 1, 2018.

  • Independence and impartiality of claims adjudicators. Claims and appeals must be decided in a manner designed to ensure independence and impartiality of the persons involved in making the benefit determination.  For example, employment decisions regarding compensation, promotion, or similar matters cannot be made based upon the likelihood that an individual will support the denial of disability benefits.
  • Improvements to disclosure requirements. Benefit denial notices must contain the following:

— A complete discussion of why the plan denied the claim and the standards applied in reaching the decision.

— The basis for disagreeing with the views of health care or vocational professionals whose opinions were provided by the claimant or obtained at the behest of the plan.

— The basis for disagreeing with a finding of “disability” by the Social Security Administration (SSA), if applicable. A disability plan is not bound by an SSA determination, but in the past a failure to explain the plan’s reason for disagreement has been one ground for court scrutiny of the plan’s denial decision.  Now that explanation will be mandatory.

— The specific internal rules, guidelines, protocols, standards or other similar criteria the plan relied upon in making the adverse determination or, alternatively, a statement that such guidelines etc. do not exist.

— If the denial is based on a medical necessity or experimental treatment or similar exclusion or limit, either an explanation of the scientific or clinical judgment for the determination, or a statement that such explanation will be provided free of charge upon request.

  • Claimant’s right to access entire claim file. A claimant must be given timely notice of his or her right to access to the entire claim file and other relevant documents and be provided the right to present evidence in support of his or her claim during the review process.  For this reason, an initial adverse benefits determination must contain a statement that the claimant is entitled to receive, upon request and without charge, the documents relevant to the claim for benefits.  Currently, this is only required in notices of adverse benefits determinations on appeal.
  • Notice of new or additional evidence or rationales before adjudication. According to the DOL, a full and fair review of an adverse determination requires that a claimant has a right to review and respond to new evidence or rationales developed by the plan during the pendency of the appeal.  This allows the claimant the opportunity to fully and fairly present his or her case at the administrative appeal level, as opposed to having a right to review such information on request only after the claim has already been denied on appeal. The evidence or rationale must be provided to the claimant as soon as possible, and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required of the plan, in order to give the claimant a reasonable opportunity to address the evidence or rationale prior to that date.  However, the new regulations do not extend the time deadlines for the plan’s determination; the notice of a new rationale or evidence, the claimant’s opportunity to respond, and the plan’s determination must all be accomplished within the existing time for an appeal determination (45 days from the filing of the appeal, with a possible 45-day extension).
  • Claimant is deemed to have exhausted administrative remedies if a plan fails to comply with claims procedure requirements. Plans cannot prohibit a claimant from seeking court review of a claim denial based on a failure to exhaust administrative remedies under the plan if the plan failed to comply with the claims procedure requirements.  The new regulations provide an exception to this rule when the violation was (i) the result of a minor error; (ii) nonprejudicial to the claimant; (iii) attributable to good cause or matters beyond the plan’s control; (iv) in the context of an ongoing good-faith exchange of information; and (v) not reflective of a pattern or practice of noncompliance by the plan.
  • Expanded definition of “adverse benefit determination” that triggers appeals procedures. The current ERISA regulations provide that the term ‘‘adverse benefit determination’’ includes any denial, reduction, or termination of, or a failure to provide or make full partial  payment for, a benefit. Under the new rule, rescissions of coverage, including retroactive terminations due to alleged misrepresentation of fact (e.g., errors in the application for coverage) must be treated as adverse benefit determinations, thereby triggering the plan’s appeals procedures. This will apply whether or not, in connection with the rescission, there is an adverse effect on any particular benefit at that time.  Rescissions for non-payment of premiums are not covered by this provision.
  • Notices and denials must be written in a “culturally and linguistically appropriate” manner. If a disability claimant’s address is in a county where 10 percent or more of the population is literate only in the same non-English language, benefit denial notices must include a prominent statement in the relevant non-English language about the availability of language services. Such services must include assistance with filing claims and appeals in the non-English language.  The plan must provide written notices in the applicable non-English language upon request.

Pings for Employers

Here’s what employers should be working on during 2017 to be ready on January 1, 2018, with the top of the list being a review of your disability benefits plans to determine if changes are needed. Most disability plan procedures will have to undergo changes to comply with the new regulations.  Even if no changes are necessary for that reason, this is a good time to consider whether your plans need revisions or updates.

  • Review your current claims handling procedures. This is also an opportune time to take a deep dive into your disability claims practices start to finish. Are they compliant with current existing regulations that will remain in effect in 2018?  What changes do you need to make to comply with the new regulations?
  • Review your internal rules, guidelines, protocol, or other similar criterion that are relied upon in making adverse determinations. These will now become public documents in the case of every denial.  Better polish them up and ensure that they accurately reflect your procedures.  The new regulations do allow a plan to state that no such internal rules exist, but question whether that is a wise approach.
  • Prepare new templates for denial letters – for both initial denials and upholding a denial on appeal. A template will guide your claims examiners through the correct considerations and elements required by the new (and existing) regulations in the denial.
  • Provide training to claims examiners. Make sure your examiners are well-schooled on the new processes – old practices may not be compliant.
  • Analyze the language make-up of your work force. If you will be required to provide information in one or more non-English languages, engage a language service for phone calls, translation of denial notices, and other claims assistance.

What is Matrix Doing to Comply with the New Regulations?
Not to worry – Matrix’s disability claims handling procedures will embrace the new rules and will continue to be best in class!

We will be ready to administer our clients’ disability plans in compliance with the new regulations by January 1, 2018.  We have assembled a task force of experts in disability plans, claims handling procedures, ERISA, and customer service.  We will undertake the steps recommended for employers above, and will review and update our claims handling software as needed.

Our practice leaders and account managers will be in touch with clients during 2017 to discuss changes to plan notifications, procedures, and more.  If you have questions in the meantime, contact your account manager or sales representative, or send us an email at ping@matrixcos.com.


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EEOC Heightens Focus on Mental Health and the Workplace with New Employee Q&A

mental-health-brain-shutterstockAt Matrix Absence Management, we are seeing an increase in workplace accommodation requests due to mental health impairments, including modified work schedules and work-from-home arrangements.   The U.S. Equal Employment Opportunity Commission has long focused on mental health impairments in the workplace and is noticing increases in mental health issues as well.  On December 12, 2016, the EEOC stepped up its game with a new employee-centered resource document, Depression, PTSD, & Other Mental Health Conditions in the Workplace: Your Legal Rights.  The document is brief – only 2 pages – and doesn’t break any  new ground, but pulls together in Q&A format some basic ADA and mental health information that can be helpful to employees and employers alike. Continue reading

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NEW!  San Francisco Issues Draft Rules for Paid Parental Leave

By Marti Cardi, VP-Product Compliance

untitled-1For those readers who do not have California employees, I have 2 things to say:  First, lucky you!  Second, hang in there with me – I promise some non-California blog posts in the near future. 

Late on Friday, November 18, the San Francisco Office of Labor Standards Enforcement (OLSE) posted draft Rules to support the Paid Parental Leave ordinance (SF PPL) effective January 1, 2017.

OLSE is taking comments on the proposed Rules until 5:00 p.m. PST Friday, December 2, 2016, and will hold a public hearing on December 2.  Details and copies of the ordinance, an amendment, and the draft Rules are available on the OLSE website: http://sfgov.org/olse/paid-parental-leave-ordinance.  We at Matrix will be listening for further developments.

Here are a few of the highlights from the draft Rules:

  • An explanation of how prior employment with a covered employer counts toward the 180-day eligibility requirement (Rule 1)
  • How to count employees to determine whether the employer is a “covered employer” (it can be complicated!) (Rule 2)
  • How to calculate an employee’s SF PPL entitlement when the employee becomes eligible during a parental leave (Rule 3)
  • The relationship between CA PFL and SF PPL, and what documents or information the employer can require to ascertain the employee’s CA PFL coverage (Rules 4 and 5)
  • SF PPL calculation for tipped employees (Rule 6)
  • Ability to use SF PPL intermittently, and how to calculate the employee’s intermittent pay benefit (Rule 7)
  • Employer appeal and hearing procedures (Rule 8)

Still unanswered: 

  • Forms and the notice required by the ordinance are mentioned in the proposed Rules but are not yet available.
  • There is no explanation of the interaction or overlap in the employer’s ability to require employees to use 2 weeks of vacation pay for CA PFL and/or SF PPL purposes.
  • Can the employer apply accrued but unused PTO toward PPL obligation – or only time off designated as “vacation” as stated in the ordinance?
  • What is the statute of limitations for employee to bring a civil action against employer for PPL violations?
  • If an employee is continuing health and other benefits during parental leave, can the employer withhold the employee’s share of premium payments from the PPL Supplemental Compensation?  How about other voluntary deductions authorized by the employee (e.g., 401(k), loan repayment, voluntary life insurance buy-up . . . )?

As a refresher, the SF PPL is available for leave taken to bond with a new child.  It applies to employers with total employees in any location as follows (Covered Employers):

  • 50 or more employees: January 1, 2017
  • 35 or more employees: July 1, 2017
  • 20 or more employees: January 1, 2018

Eligible employees must meet 5 eligibility requirements:

  1. Work for a Covered Employer
  2. Has worked for the employer for at least 180 days prior to start of leave
  3. Works at least 8 hours  per week within San Francisco
  4. Works at least 40% of employee’s total hours within San Francisco
  5. Is eligible for and receiving paid family leave from California for bonding

The employer’s obligation is to top off paid family leave benefits the employee is receiving from the state of California to 100% of the employee’s regular compensation, subject to a cap.   The benefit is paid fully by the employer with no contribution or payroll deduction from employees.

More details about the SF PPL ordinance are available in our prior blog post here.


MATRIX CAN HELP!  Matrix Absence Management provides leave, disability, and accommodation management services to employers seeking a comprehensive and compliant solution to these complex employer obligations. At Matrix we monitor the many state and municipal family and sick leave laws being passed around the country and specialize in understanding how they work together. For leave management and accommodation assistance, contact us at ping@matrixcos.com.

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Employee Reports FMLA for One Workday in the Middle of Vacation

By Marti Cardi, VP Product Compliance

Plaintiff Masoud Sharif and his wife were employed by United Airlines at the Dulles Airport in Washington, D.C.  He and his wife took vacation to South Africa from March 16 to April 4, 2014.  Mr. Sharif, however, was scheduled to work on March 30 and 31. He was able to get a co-worker to cover his shift on the 31st, but was not able to get coverage for his shift on the 30th.

Sharif suffered from anxiety and panic attacks and had previously been approved by United to take intermittent FMLA for his condition.  On March 30 he called in to report FMLA for that day.  HR noticed that he had reported FMLA for his only scheduled workday during an extended vacation period and launched an investigation.  Sharif was interviewed and gave conflicting explanations – at one point claiming he did not think he had to work that day, then claiming he could not locate a flight home in time for his shift, though he and his wife flew to visit a niece in Milan from March 31 until April 4.

As a result of these conflicting explanations, United notified Sharif of its intent to discharge him from employment for fraudulent use of FMLA and violating a United policy requiring truthfulness in communications. As a union employee, he was entitled to a hearing, but when the union advised him he would be unlikely to prevail, he elected to retire.

Sharif then sued United, claiming the airline fired him in retaliation for taking FMLA leave.  According to the 4th Circuit, the facts developed as follows:

  • At 7:00 a.m. Cape Town Time (1:00 a.m. Eastern Standard Time) on March 30—the day of his scheduled shift—Sharif called United Airlines to take medical leave under the FMLA.
  • He had not made any advance reservations for a return flight.
  • The next day, Sharif and his wife flew from Cape Town to Milan, Italy, where Sharif’s niece lived.
  • On April 3, Sharif and his wife finally departed for Washington and arrived just in time for his wife’s next shift.
  • On April 23, 2014, United representatives interviewed Sharif with a union representative present. When asked about his vacation and March 30 absence, Sharif sat in silence for a period of minutes before he gave a series of inconsistent answers.
  • Sharif first replied that he was not scheduled to work on March 30, and when asked why he had taken FMLA leave if he did not have a shift, Sharif responded that he “d[id] not recall being out sick this day or calling out sick.”
  • After another pause, Sharif clarified that he began trying to return home flying standby (as airline employees often do) beginning March 29 but was unable to find any available flights.
  • Sharif’s story later evolved to claim he actually arrived at the airport on March 28 to begin looking for a flight, and that he and his wife obtained the additional days off in April to gather with family in Pittsburg for the Persian New Year.
  • As a result of his repeated unsuccessful attempts to find any means to return to Washington in time for his shift, Sharif explained that he grew anxious and was eventually seized by a panic attack which then led to his use of FMLA leave.

The district court had granted summary judgment in favor of the airline – meaning United won and the case would not go to a jury trial.  The 4th Circuit agreed with the district court and affirmed summary judgment for United.   In particular, the court emphasized that Sharif had to prove that United’s explanation for its determination that he had violated its policies and that his conducted warranted termination was a pretext for retaliating against him for taking leave.  Sharif failed to present sufficient evidence, and quite to the contrary, the evidence supported that United had “ample reason to believe it had been lied to,” citing to the FMLA regs. “An employee who fraudulently obtains FMLA leave from an employer is not protected by the FMLA’s . . . provisions.”  29 C.F.R. § 825.216(d).

Sharif v. United Airlines, __ F.3d ___, 2016 WL6407391 (4th Cir. Oct.31, 2016).

PINGPings for Employers: The FMLA offers a few tools for employers to curb suspected abuses, including prompt action to investigate to support the suspicion of improper FMLA usage. United did a number of things well, beginning with noticing there was an issue. When someone reports leave in the middle of pre-planned vacation, that is understandably cause, at a minimum, for inquiry. Also:

  • United kept to the facts. They did not draw conclusions, but rather, asked Sharif to provide an explanation in interviews and invited him to submit a written statement;
  • The airline did not take adverse employment action until they had the objective facts to support that not only did Sharif report FMLA on a day that did not appear to be for a covered reason; and
  • United also pursued Sharif’s violation of the Company’s policies governing dishonesty – a reason for termination independent of FMLA usage (although the dishonesty related to FMLA usage). This kind of policy should be part of every employer’s code of conduct.

MATRIX CAN HELP!  Matrix provides leave, disability, and accommodation management services to employers seeking a comprehensive and compliant solution to these complex employer obligations.  We are experts on ways to minimize FMLA misuse and can help your company implement practices that will achieve this goal.

We monitor the many leave laws being passed around the country and specialize in understanding how they work together. For leave management and accommodation assistance, contact us at ping@matrixcos.com.

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Election 2016 – What Happens With Paid Family and Medical Leave?

By Marti Cardi, VP Product Compliance

The party’s over
It’s time to call it a day…

Whew!  Whether you’re nursing an electoral hangover or still on an adrenaline high, it is a relief to have the election over with and return to normal life – but what is “normal” now?  What are we likely to see in the next few months or years of a Donald Trump presidency, with respect to family and medical leave and related issues? What or who will SNL parody next?  (OK, that’s beyond the scope of this blog, but I’ll be watching.)

Bottom line, no one knows yet. But we can make some guesses based on platforms and promises.

Trump’s Plan for Paid Maternity Leave.  During his candidacy Trump proposed a plan that would provide up to six weeks of paid maternity leave.  Note that term – “maternity” leave.  Trump’s proposal does not include paid bonding time for fathers, paid time off due to an employee’s own health condition, or paid time to care for an employee’s ill or injured family member.  Trump proposes to fund this benefit by amending the existing unemployment insurance companies are required to carry. The benefit would apply only when employers don’t offer paid maternity leave, and would be paid for by reducing fraud in the program so taxes are not raised.  It is questionable whether there is enough fraud that can be identified and eliminated year after year to sustain funding of this plan.

Moreover, Trump’s support for paid leave of any kind has been tepid at best.  He did not announce his plan until mid-September 2016, past the primary contests and well into the election campaign.  With both houses of Congress controlled by Republicans, it is unlikely he will receive any pressure from the legislature to move forward on this issue.  We’ll be watching closely.

Trend: Increasing Paid Leave.  No doubt, there is a trend on many fronts in favor of paid family and medical leave.

The FAMILY Act.  The Family and Medical Insurance Leave Act is pending in the U.S. House and Senate (H.R. 1439/S. 786).  This Act would provide up to 12 weeks of partial wage payment during a leave of absence for reasons that dovetail with job-protected but unpaid leaves available under the federal Family and Medical Leave Act (FMLA): an employee’s or family member’s serious health condition, bonding with a new child, and certain family military-related absences.

The FAMILY Act was introduced in March 2015, has not made it out of its first committee (House Ways and Means), and will die at the end of this Congressional session (officially, January 3, 2017) – barring unlikely extraordinary action in both houses.  Bills are often reintroduced in the next congressional session, so there is a good chance of more action on this issue in the 115th Congress.  Support among the American public and advocates is strong.  A letter of support for the FAMILY Act was submitted to members of Congress on June 29, 2016, endorsed by over 350 family-friendly organizations.  Is it possible that U.S. legislators will finally see the light and take us off the list of the few countries in the world (among them, Liberia, Suriname and Papua New Guinea) that do not provide some sort of paid family or medical leave?  Stay tuned.

State/municipal paid leave programs.  An increasing number of state governments are requiring employers to provide paid family leave, all funded by employee payroll deductions.  Here is a snapshot:

  • California: Effective in 2004; provides 55% income replacement for up to six weeks (in 2018 increasing to 60% or 70% depending on income level)
  • New Jersey: Effective in 2009; provides 67% of wages (up to $524/week) for up to 6 weeks
  • Rhode Island: Effective in 2014; provides a maximum of $752 per week, based on earnings, for up to 4 weeks
  • New York: To be effective in 2018; implementation is phased from 2018 to 2021; will ultimately provide 67% income replacement for up to 12 weeks

In addition, San Francisco has passed a paid family leave ordinance effective January 1, 2017, that requires employers with San Francisco employees to top off employees’ California paid family leave benefits to 100% of their income (subject to a cap) for 6 weeks.  In contrast to the state paid family leave plans, San Francisco requires employers to pay for this supplemental compensation without any employee contribution.

Private Company Paid Leave Plans.  The trend toward paid family leave is most notable in the policies adopted by many companies throughout the country.  A recent analysis by the National Partnership (an organization that promotes paid leaves of absence for American workers) indicates at least 46 major U.S. companies have adopted or increased paid family leave benefits in the past two years.  Most of these provide only paid parental leave, but a few – notably Adobe, Deloitte, and Discovery Communications –  include paid time off for the employee’s own health condition or to care for a family member.  The results of this analysis, which includes summaries of the 46 paid leave plans, can be found here.

MATRIX CAN HELP!  Matrix tracks state and federal legislation daily to stay on top of leave, disability, and accommodation developments.  Contact us if you have questions about what’s happening in capitol buildings and courthouses around the country, or what’s on the ballot in the next cycle.

We provide leave, disability, and accommodation management services to employers seeking a comprehensive and compliant solution to these complex employer obligations. We monitor the many leave laws being passed around the country and specialize in understanding how they work together. For leave management and accommodation assistance, contact us at ping@matrixcos.com.

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California Risks Reputation as Leading Leave Haven

By Marti Cardi, VP Product Compliance

full_mod_vetoCalifornia is often commended – or condemned? – as the nation’s leader in rights for the state’s workers. Indeed, in late September California Governor Jerry Brown signed a bill requiring employers to give notice to California employees of their rights if they are a victim of domestic violence, sexual assault, or stalking.

However, at the same time he vetoed two bills that would have expanded the rights of employees under the California Family Rights Act (CFRA).  What, you say?  In California?  Yes, apparently there are limits.

Enacted:  Mandatory Notice to Employees of Leave Rights. Effective January 1, 2017, employers with 25 or more employees must inform each employee in writing of his or her rights established under the two Labor Code sections cited below. The information must be provided to new employees upon hire and to other employees upon request. However, the law also directs the Labor Commissioner to develop by July 1, 2017, a sample form that employers can use to comply with the new notice requirement.  Employers are not required to comply until the Labor Commissioner posts the form on the Commissioner’s website.

The new law amends two current laws (CA Labor Code §§ 230 and 230.1), which allow victim employees to take time off from work for the following purposes:

  • To seek medical attention for injuries caused by domestic violence or sexual assault.
  • To obtain services from a domestic violence shelter, program, or rape crisis center as a result of domestic violence or sexual assault.
  • To obtain psychological counseling related to an experience of domestic violence or sexual assault.
  • To participate in safety planning and take other actions to increase safety from future domestic violence or sexual assault, including temporary or permanent relocation.
  • To obtain or attempt to obtain any relief, including, but not limited to, a temporary restraining order, restraining order, or other injunctive relief, to help ensure the health, safety, or welfare of the victim or his or her child.

The current laws also make it unlawful for employers to discharge, threaten with discharge, demote, suspend, or in any manner discriminate or retaliate against victims of such crimes in the terms and conditions of employment by his or her employer because the employee has taken time off for those purposes.  Leave for the first four reasons listed above is limited to the 12 weeks provided by the federal Family and Medical Leave Act (FMLA) even if the leave reason is not covered by FMLA.  For example, if an employee has already taken 9 weeks of FMLA time, he or she will be limited to 3 more weeks of leave for the first four reasons above in the specific leave year.  Leave for the reasons described in the last bulleted paragraph (obtaining protective court orders) is not similarly limited.

Also in late September, California Governor Brown vetoed 2 bills that would have expanded employees’ rights under the California Family Rights Act (CFRA).

Vetoed:  Parental leave for employees of smaller employees.  Governor Brown vetoed SB 654, which would have provided up to 6 weeks of job-protected unpaid parental leave to eligible workers employed by companies with 25-49 employees.  Currently the California Family Rights Act (CFRA) requires companies with 50 or more employees to provide up to 12 weeks of job-protected unpaid leave to eligible employees.  The proposed law would also have required the continuation of health care benefits during the leave.

Vetoed:  Expanded CFRA definition of “family member.”  Another bill vetoed by Governor Brown (SB 406) would have amended CFRA by expanding the definition of “family member” for which California employees can take leave when the family member has a serious health condition.  The bill would have added leave rights to care for the employee’s grandparent, grandchild, sibling, domestic partner, or parent-in-law.  The bill also would have removed the age restriction on the definition of “child” so that employees could take CFRA time to care for an adult child with a serious health condition even if the adult child does not have a disability.

None of these relationships is covered under the FMLA.  As a result, an eligible employee would be able to take up to 24 weeks of leave per year in some circumstances.  For example, when leave is first taken to care for a family member not covered under FMLA such as a sibling or grandparent, the leave would not count against the employee’s 12 weeks of FMLA entitlement, which would still be available for use if the employee meets the eligibility requirements at the beginning of the requested leave.

A few states with family and medical leave laws allow this anomaly to occur due to their broader definition of a “family member” for whom an employee can take leave:

  • California: by regulation, includes domestic partner in the definition of spouse
  • Colorado: provides for FMLA-like leave rights to care for a civil union partner with a serious health condition
  • District of Columbia: family member includes a person to whom the employee is related by blood, legal custody, or marriage; and a person with whom the employee shares or has shared, within the last year, a mutual residence and with whom the employee maintains a committed relationship (thus, covering many more family and personal relationships than the FMLA)
  • Hawaii: civil union partners, reciprocal beneficiaries, parents-in-law, grandparents (including grandparents-in-laws)
  • Maine: siblings (when mutually committed to supporting one another), domestic partners; no age limit on “child”
  • New Jersey: civil union or domestic partners
  • Oregon: civil union or domestic partners, parents-in-law, grandparents, grandchildren
  • Rhode Island: civil union partners, parents-in-law; no age limit on “child”
  • Vermont: civil union partners
  • Washington:   civil union partners, parents-in-law, grandparents
  • Wisconsin: domestic partners, parents-in-law (including the parent of a domestic partner)

MATRIX CAN HELP!  Matrix provides leave, disability, and accommodation management services to employers seeking a comprehensive and compliant solution to these complex employer obligations. We monitor the many leave laws being passed around the country and specialize in understanding how they work together. For leave management and accommodation assistance, contact us at ping@matrixcos.com.

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Lowe’s to pay $8.6 million in yet another EEOC case involving inflexible leave policies

By Marti Cardi, VP-Product Compliance & Gail Cohen, Director, Compliance & Employment LawCartoon Animal Eyes Under Big Stone

Employers, if you haven’t fixed this issue yet, get out from under that rock!

If an employee with a disability exhausts leave time provided by company policy or by a law such as the FMLA, you have two obligations.

First, consider even more leave as a reasonable accommodation. 

Second, consider reasonable workplace accommodations to allow the employee to return to work

It’s that simple.

As announced by the EEOC on May 13, 2016, home improvement giant Lowe’s has agreed to pay $8,600,000 to affected employees as part of a consent decree entered into with the EEOC in a federal district court in California. The EEOC claims that Lowe’s violated the ADA by terminating employees with a disability after failing to provide them reason­able accommodations when their medical leaves of absence exceeded Lowe’s 180-day (and, subsequently, 240-day) maximum leave policy.

And it’s not just about the money.  The consent decree agreed to by Lowe’s in this case includes some very typical additional requirements, all enforceable by court order.  The four-year consent decree settling the suit requires that Lowe’s:

  • Retain a consultant with ADA experience to review and revise company policies as appro­priate;
  • Implement effective training for both supervisors and staff on the ADA;
  • Develop a centralized tracking system for employee requests for accommoda­tion;
  • Maintain an accommodation log;
  • Post documentation in its workplaces related to the settlement; and
  • Submit regular reports to the EEOC verifying compliance with the decree.

Thus, Lowe’s ends up not only paying the agreed-upon amount of damages, but also incurs significant expenses (for example, attorneys’ fees) and business disruptions during the EEOC’s investigation and in complying with the terms of the consent decree for four years.

Two types of policies are on the EEOC’s radar.  An employer’s obligation to provide more leave than offered by company policies or required by law has received much recent attention.  Why, just this month the EEOC released a new Resource Document entitled Employer-Provided Leave and the Americans with Disabilities Act.  While the Resource Document did not break any new ground (no, the EEOC still won’t say how long a leave can be before it becomes an unreasonable accommodation), it does pull together in one handy place all existing EEOC guidance on the issue, including assessment of extra leave as an undue hardship.  Our blog post on the Resource Document can be found here.  Meantime, the EEOC is focusing on the following:

Maximum or inflexible leave policies (sometimes referred to as “no fault” leave policies) take many different forms.  A common policy, especially for entities covered by the FMLA, is a flat limit of 12 weeks for both continuous and intermittent leave.  Some employers not covered by the FMLA set lower overall caps. Others tie the maximum leave to the duration of short-term disability benefits.  Any inflexible cap may result in an ADA violation because it does not allow for the interactive process and individualized consideration of whether additional leave or some other reasonable accommodation will enable the employee to return to work.

100% recovered or healed policies are those that require an employee with a disability to have no medical restrictions – that is, be “100%” healed or recovered – before returning to work.  These also have huge potential to violate the ADA because the employer does not engage in the interactive process to discover whether the employee can perform essential functions with on-the-job reasonable accommodation(s).

Lots of companies got it wrong in the past.  Many employers have been the subject of EEOC investigations and, ultimately, a pricey consent decree.  Here are some of the bigger-ticket resolutions:

Company Date Amount Policy /Practice in Violation of ADA
Lowe’s 2016 $8.6 million Terminating employees whose need for medical leaves of absence exceeded Lowe’s maximum leave policy (180 days, subsequently 240 days)
Pactiv LLC 2015 $1.7 million Assessing attendance points for medically-related absences; not allowing use of intermittent leave or extension of a leave of absence as an ADA reasonable accommodation
Princeton HealthCare System 2014 $1.35 million Limiting medical leave of absence to maximum of 12 weeks:

  • employees FMLA-eligible terminated after 12 weeks\
  • employees not FMLA-eligible terminated after short absence

Requiring certification of 100% recovery upon return to work rather than considering return to work with a reasonable ADA accommodation

Dillard’s 2012 $2.0 million
  • Maximum-leave policy limiting the amount of medical leave an employee could take
  • Policy requiring all employees to disclose personal and confidential medical information in order to be approved for sick leave
Interstate Distributor Co. 2012 $4.85 million
  • Limiting medical leave of absence to maximum of 12 weeks
  • Requiring certification of 100% recovery upon return to work rather than considering return to work with a reasonable ADA accommodation
 Verizon Communications   2011  $20 million Failing to make exceptions to “no fault” attendance plans for individuals with disabilities as an ADA accommodation
 Supervalu, Inc., Jewel Food Stores, Inc. etc.  2011  $3.2 million Terminating employees with disabilities who were not 100% recovered at the end of medical leaves of absence rather than considering return to work with a reasonable ADA accommodation
 Sears, Roebuck and Co.  2009  $6.2 million Terminating employees following exhaustion of workers’ compensation leave without engaging in the interactive accommodation process to consider workplace accommodations or leave extension as an accommodation

PINGPings for employers:  We provided pointers for employers in our last blog post so we won’t repeat, but given the size of the potential price tag we suggest that you go back and read again.

MATRIX CAN HELP! Matrix’s ADA Advantage leave management system and our dedicated ADA accommodation team helps employers maneuver through the accommodation process – including spotting noncompliant leave policies during implementation of our services.  We will initiate an ADA claim for your employee, conduct the medical intake and analysis if needed, manage the interactive process, assist in identifying reasonable accommodations, document the process, and more.  Contact Matrix at 1-800-866-2301 to learn more about these services.


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