Don’t Miss It: THE 2018 DMEC FMLA/ADA EMPLOYER COMPLIANCE CONFERENCE

Posted on: April 24, 2018 0

Join your peers and prepare to confidently tackle your organization’s FMLA/ADA challenges at the 2018 DMEC FMLA/ADA Employer Compliance Conference, Apr. 30-May 3, in Orlando!

This year, Matrix Absence Management is a National Sponsor and I have the privilege of facilitating four sessions! I would love for you to join me and my colleagues at any or all of the below:

Monday, April 30 12:00 pm -2:00 pm
Liability Alert! HR and Supervisor Ethical Missteps:

This session will highlight real ADA and FMLA cases to help you gain a deeper understanding of ethical pitfalls in managing leaves and disabilities, such as misplaced benevolence, relying on stereotypes, what you ask, and how you communicate. Throughout, you will learn best practices to promote ethical ideals.  Join Marti Cardi, Vice President, Product Compliance, Matrix Absence Management, Inc. and Jaclyn Kugell, Partner, Morgan, Brown and Joy, LLP

Monday, April 30 4:30 pm -5:30 Preconference Wrap-Up: Ask the Experts!

Join me and other presenters  as we wrap up the first day of sessions with a chance to ask questions of our experts on the topics covered during the afternoon preconference workshops.

Wednesday, May 2 9:00 am -10:00 am
DOL Red Flags in FMLA Investigations:

Helen Applewhaite, DOL Branch Chief for FMLA will headline in this sessionto help you to identify red flags that could reveal issues with your practices and policies.  I will bring in the practical advice on how you can proactively address these issues to stay in the clear and – occasionally perhaps – will disagree with Ms. Applewhaite and the DOL.

Wednesday, May 2 4:15 pm-5:15 pm
Roundtable Mental Health in the Workplace – The Do’s, Don’ts, and Shoulds:

Join your peers for a small-group discussion and  bring your questions about how to manage mental-health claims in the workplace under the ADA and FMLA:  performance and conduct issues, obtaining medical information, requiring counseling as a condition of continued employment . . .


These sessions with be equally engaging and enlightening, and offer true real-world examples you can put into practice (with the help of Matrix Absence Management, of course).  I hope you decide to join us but if not, stay tuned for my recap of the conference.

To learn more about the 2018 DMEC FMLA/ADA Employer Compliance Conference and to download the full program click here:  http://dmec.org/conferences-and-events/compliance-conference/.   

Just when you thought you might be getting the hang of New York Paid Family Leave…

Posted on: March 12, 2018 0

BY MARTI CARDI, VP-PRODUCT COMPLIANCE & GAIL COHEN, DIRECTOR-EMPLOYMENT LAW/COMPLIANCE

The New York state legislature introduced a bill proposing to expand the coverage of paid leave.  See NY S 7723.  As with so much of the NY PFL law and regulations, the proposed bill – if enacted as is – will add more complications and conflicts.  Here’s what is in the bill:

PROVISION

COMMENTS – IF PASSED
Adds as a covered leave reason, matters related to being victim of domestic or sexual violence:

Medical attention, attending counseling sessions, seeking legal assistance, attendance in court proceedings, communicating with an attorney, relocating to a permanent or temporary residence.

This leave will create a category under Paid Family Leave for which the employee can obtain paid leave for personal medical needs.  An employee’s own medical condition is otherwise excluded from PFL coverage due to the availability of disability leave insurance
Available only for employee as victim, not for a family member as a victim.  Almost all existing laws granting leaves for victims of domestic violence and similar crimes provide time off if either the employee or a specified family member is the victim.  The limitation to the employee only is unusual and we might expect to see an amendment in this regard.

 

Employee can use only 2 weeks of paid PFL (out of the 8, 10, or 12 weeks of total PFL entitlement) for the new leave reason, but can also use 2 additional weeks unpaid, and the unpaid weeks have the same PFL protections. The bill provides an employee with 2 additional weeks of leave for matters related to domestic violence (but unpaid).  For example, in 2018 an employee could take 6 paid weeks to care for a family member, 2 paid weeks for matters relating to being a victim of domestic violence, and 2 weeks unpaid for the same – a total of 10 job-protected weeks off, although for all other reasons NY PFL is limited to 8 weeks in 2018.
Benefits are paid at 67% of employee’s average weekly wage, not to exceed 67% of state average weekly wage.  This is an odd provision – why not just follow the same phase-in of PFL percentage benefits over the next 3 years?

 

As you can see, the proposed bill would create some administration challenges, such as tracking the 2-week limitation of PFL for domestic violence reasons and the 2 additional weeks of unpaid but job-protected leave.  As drafted the bill will also require employers to pay different benefit percentages for early years based on leave reason until the benefit percentage for all leave reasons reaches 67% in 2021.  This bill, if passed, will go into effect on the January 1 following passage – so likely January 1, 2019. We hope for some amendments before passage!

The FMLA is 25!

Posted on: February 2, 2018 0

BY MARTI CARDI, VP-PRODUCT COMPLIANCE

Happy Birthday!  Monday February 5 marks 25 years since the Family and Medical Leave Act was signed into law.  I was in private practice when the law passed, and I recall an associate with our law firm presented a summary of the new law.  My thought was, “This will never amount to anything.”  So much for my predictive talents!  Who knew that 25 years later the FMLA would be such a big part of my job every day and such a challenge for employers?  The law and regulations have gone through 2 major revisions since enactment, adding things like 26 weeks to care for an ill or injured service member and special rules for flight crews. 

If you want to learn more about this milestone event, including a “Thunderclap” scheduled for 1:00 EST on Monday, check out this page on the website for the National Partnership for Women & Families:  25th anniversary of the FMLA activities.

I also want to take this opportunity to say thank you to all of our clients.  You put your trust in Matrix to manage FMLA and state leave requests for your employees and we strive to live up to that trust. 

Matrix can help!
Remember, in addition to our FMLA and state leave of absence services, we also manage ADA accommodation requests, disability claims, workers’ compensation, state paid family leaves, and more.  For information contact your account manager or send us an email at ping@matrixcos.com.

The Needle in the Tax Bill Haystack – A Paid Family & Medical Leave Tax Credit

Posted on: January 4, 2018 0

BY MARTI CARDI, VP-PRODUCT COMPLIANCE & GAIL COHEN, DIRECTOR-EMPLOYMENT LAW/COMPLIANCE 

 

One might think that the Trump administration would trumpet (ahem . . . ) the supposed family-friendly and employer-friendly provisions of the new Tax Cuts and Jobs Act.  Not so.  A little-publicized provision of the new Act establishes a tax credit for employers who provide paid family and/or medical leave to employees within certain parameters.  Your guess is as good as mine as to why this provision has flown under the radar.  But not under the Matrix Radar!

The tax code provision is based on a bill previously introduced into the House and Senate as the Strong Families Act, which has received strong criticism from pro-family groups.  Google it and you can find websites criticizing and supporting the Strong Families Act.  Politics aside, let’s take a look at what is now the law.  (But please remember, we at Matrix are not tax advisors – consult your own attorneys or tax advisors for specific details!) 

You can review the specific provisions of the law at the link above – the “Employer Credit for Paid Family and Medical Leave” starts at page 221 of the bill (page 223 of the PDF). 

Summary.  The Tax Cuts and Jobs Act (the “Act”) provides employers with a partial tax credit for wage benefits paid to employees during leave taken for reasons covered by the federal Family and Medical Leave Act (“FMLA”).  But note this:  The credit is in effect only for tax years 2018 and 2019, and then automatically sunsets unless Congress takes further action. 

Employee and employer coverage.  The tax credit coverage is not limited to employees and employers covered by the FMLA.  Benefits paid to full time and part time employees are covered by the tax credit.  However, to qualify for the tax credit, payments must be to employees who:

  • Have been employed by the employer for at least 1 year
    • The Act does not specify whether that has to be 12 consecutive months of employment
      or whether, like FMLA eligibility, the employee only needs to have worked an aggregate
      total of 1 year
  • Make no more than $72,000 per year

Employers may voluntarily provide paid family leave to employees who are not eligible for FMLA leave (called “added employees” in the Act) and receive the tax credit for such payments as long as the employer has a policy that complies with the Act.  So, for example, an employer could provide paid leave benefits to an employee who has not worked 1250 hours in the past 12 months, or who has already exhausted their FMLA entitlement, and still get the tax credit.  “Added employers” with fewer than 50 employees or those with small worksites not covered by the FMLA can also make paid leave benefits available to employees and use the tax credit. 

Policy requirements include a minimum of 2 weeks of paid leave benefit, a provision against interference with the employee’s policy rights to paid leave, and a provision against termination of an employee for complaining about a violation of the policy.

Leave reasons.  Leave benefits must be paid for one or more of the leave reasons available under the FMLA – the employee’s own serious health condition, a family member’s serious health condition, birth or placement of and bonding with a new child, military exigencies, and caring for a seriously ill or injured servicemember.  An employer’s policy does not need to cover all of the FMLA leave reasons to qualify for the tax credit.  For example, an employer may provide paid leave only for bonding with a new child and still qualify for the tax credit if all other conditions are met. 

Amount of leave.  The employer’s policy must provide at least 2 weeks of paid leave.  The maximum amount of paid leave that qualifies for the tax credit is limited to 12 weeks per employee in a 12-month period (the same as FMLA leave rights).

Percentage of pay provided.  The employer must provide a paid leave benefit of at least 50% of the employee’s wages (as defined in the tax code – I’m not going there!).

Amount of tax credit.  An employer providing paid family and/or medical leave benefits can receive a tax credit ranging from 12.5% to 25% of the amount paid to the employee.  The credit starts at 12.5% of benefits paid at the 50% level and caps at a 25% credit for benefits paid at full wage replacement.  For every percentage point over 50% of wages that the employer pays in benefits, the tax credit increases by one-quarter of a percent.  Examples:

Percentage of Paid Leave Benefit Percentage Points above 50% Multiplied by 0.25% Employer’s tax credit percentage
50% 0 0 x 0.25% = 0 12.5%
70% 20 20 x 0.25% = 5% Base 12.5% + 5% = 17.5% tax credit
90% 40 40 x 0.25% = 10% Base 12.5% + 10% = 22.5% tax credit
100% 50 50 x 0.25% = 12.5% Base 12.5% +12.5% = 25% tax credit

 

Applicable tax years.  The paid family leave tax credit is available only in tax years 2018 and 2019, unless extended by Congress.  Otherwise, it expires automatically on December 31, 2019.

Relationship to state/local paid family leave.  The Act provides that any leave which is paid or required by a state or local government is not taken into account in determining the amount of the tax credit.  Thus, the credit applies only to benefits paid voluntarily, not required by state or local law. 

PINGS FOR EMPLOYERS

  • Consult your tax advisor. As with all things tax-related, you should consult with your tax advisor
    to determine whether your existing plan is covered by the new paid leave tax credit.
  • Consult your financial advisor. If you don’t have a paid leave plan for your employees, consult
    with your financial (and tax) advisor to determine whether the incentive provided by the tax credit
    is enough to justify offering a paid leave benefit to your employees.
  • Consider benefits beyond monetary. In this day of strong competition for good employees,
    remember that a superior benefits package can be a lure.  But, with the tax credit scheduled to
    last only two years, also consider whether your company can continue the benefit if the tax
    credit expires on December 31, 2019.  Taking away the benefit might not be a good employee
    relations move at that time.

MATRIX CAN HELP!  At Matrix we offer a full suite of leave of absence and disability management tools.  This includes management of employer-specific leave plans, as well as FMLA, state leave laws, leave (and more) as an ADA accommodation, and disability plans.  To learn more, ping us at ping@matrixcos.com.

A Lesson in FMLA Damages: FMLA Retaliation in Layoff Costs Verizon Big Money

Posted on: September 20, 2017 0

By Marti Cardi, VP-Product Compliance
& Gail Cohen, Director-Employment Law/Compliance

Employers, when was the last time you asked the question “What could an FMLA suit potentially cost?” For Verizon, the answer was “a lot,” including a judgement that awarded $800,000+ to a former employee as well as:

    Substantial attorneys’ fees and costs (almost always more than the fees incurred by the plaintiff)

Business disruption and loss of productivity by its employees who had to prepare and serve as witnesses, locate and review documents and assist with other inevitable litigation-related tasks

Here’s the entire story and your opportunity to learn an important lesson.

Facts. Suzette Walker worked for Verizon for over 36 years, starting as an intern and working her way up to a position paying over $93,000.  Walker had a history of good reviews with the exception of 2013, when she was dinged for being absent from work. Her absence was attributed to an FMLA leave taken to recover from a shoulder injury.  In 2015, that review cost Walker her job.

Verizon’s employee evaluation system had 4 ranking levels:  Leading (the top score and rarely given); Performing (employee met and periodically exceeded expectations); Developing (employee had not met objectives and requirements, and improvement was needed) and New (employee had not worked long enough to be evaluated).

In 2013, Walker was assigned to a new position but then had to take FMLA leave for shoulder surgery and recovery.  Walker’s manager, Brian Magee, wrote in her mid-year evaluation:

Suzette [Walker] was moved to Conduit/Highway in the first half of the year due to existing knowledge of conduit and the City Permit process. GPIS review has been a positive transition, but conduit design has been hard to transition.  Suzette has missed time due to an injury, which has made the transition difficult.  The conduit area is still setup for the former Conduit Engineer and I have received complaints about the conduit mailbox being full. We are not where the Conduit/Highway Team needs to be at this time.  [Emphasis added.]

This was written when Walker had been out on FMLA leave for nearly 2-1/2 months and back to work at her new position part time for only about 3 weeks.  In the 2013 year end performance review, which built upon the mid-year review, Magee gave Walker a “Developing” rating, although she had always received a “Performing” score in past years (and was also rated as “Performing” in 2014).

The layoff.  In 2015 Verizon instructed Magee and another manager to eliminate one person from their two teams as part of a reduction in force.  The managers were trained on a “rate and rank” process and instructed to use that process to determine who to terminate, looking back at each employee’s performance over the last two years.  Instead, they spoke by telephone and agreed to select Walker for layoff.  Magee then contrived rate and rank scores that justified the decision.  Walker ended up on the bottom of the rankings, in part because of her “Developing” score in 2013 which counted as only 1 point in the rate and rank process.  A “Performing” score counted as 3 points.  Walker received a total score of 13 and would have tied with the other lowest employee, who received a 15, but for the hit on her 2013 evaluation.  Moreover, the other employee had been on a recent performance improvement plan that, according to the rate and rank process, should have cost him 3 points.  These points were not deducted from his overall rate and rank score.

In support of his bogus rate and rank score, Magee wrote that Walker “received a D[eveloping] rating in 2013 as she hadn’t learned the core engineering role as quickly as expected . . . ”

The verdict.  After a five-day trial, the jury returned its verdict.  Although some of Walker’s claims were dismissed, the jury found that Verizon had committed age discrimination against Walker and had retaliated against her for taking FMLA leave in 2013.  The jury awarded $188,000 in damages in Walker’s favor for back pay (and $10,000 on that age discrimination claim).  We’ll get to the rest of that $800,000 judgment in a bit.

The ruling.  The court affirmed the jury verdict and added other damages that are within the court’s province (see table below).  In its opinion affirming the jury verdict, the court recognized that Magee didn’t really conduct a rate and rank to reach his decision to select Walker for termination.  However, in the fake 2015 rate and rank form, Magee wrote that Walker was slow to learn her job responsibilities in 2013.  The judge stated that a jury could reasonably infer from this that Magee decided to fire Walker in 2015 because she hadn’t learned quickly enough in 2013 due to her FMLA time off.  The judge also stated the jury could believe that Magee’s comments on the rate and rank form were evidence of the reasons he had in mind in selecting Walker for termination.

Insights from the winning trial attorney.  Curious about this case, your intrepid reporter spoke with Christine E. Burke (Karpf Karpf & Cerutti), the attorney who represented Walker.  One fact of particular interest to me was that Verizon’s retaliation (the layoff) took place two years after Walker’s FMLA leave. Usually, the protected FMLA leave and the act of retaliation occur much closer together, making it easier to infer the retaliation.  Ms. Burke explained that because the rate and rank only required a 2-year performance look back, the 2013 “Developing” evaluation took on greater significance than her other 30+ years of good performance – thus allowing Magee to jerry-rig the rate and rank to achieve his desired outcome.

Ms. Burke also explained that the jury was swayed by the lack of fairness in Magee’s supposed rate and rank.  Not only did Magee’s 2013 evaluation work to Walker’s detriment, but Magee did not follow the company’s rules.  His failure to charge the other employee with a 3-point deduction for the PIP probably just stunk to the jury.

Finally, and perhaps most important, Ms. Burke acknowledged that the case would probably not have made it to a jury – meaning never filed, or dismissed by the court pre-trial – but for that comment in Walker’s 2013 mid-year evaluation:  “Suzette has missed time due to an injury, which has made the transition difficult.”

How much?  So how big was the judgment in favor of Suzette Walker?  Here is rundown of the types damages that can be awarded in an FMLA case and the amounts awarded to Walker:

 

FMLA DAMAGES ITEM DESCRIPTION AMOUNT
Back pay Common award in termination case – lost wages up to date of judgment $188,000

 

Front pay Awarded if employee has not yet become re-employed at time of judgment – lost wages looking forward $256,000

 

Pre-judgment interest – on back pay only Always awarded if back pay is awarded, at the “prevailing rate” $6,001

 

Liquidated damages** Similar to punitive damages – equal to amount of back pay plus pre-judgment interest (see **below) $194,001

 

Plaintiff’s attorney’s fees Employer pays if employee wins $153,356
Plaintiff’s costs Employer pays if employee wins $6,213
TOTAL FMLA AWARD TO PLAINTIFF   $ 803,571
Employer’s estimated attorney’s fees and costs

 

Employer always pays (and is usually larger than employee’s attorney’s fees) $ 160,000 est.
TOTAL COSTS TO VERIZON

 

  $963,571

** Liquidated damages are routinely awarded in FMLA cases.  The employer can avoid liquidated damages only if it proves that it had a good faith belief that its act or omission was not a violation of the FMLA.  An explanation for the employer’s actions is not enough; the employer must also prove it took affirmative steps to ascertain the requirements of and comply with the FMLA in the particular situation.  As the Walker court ruled in awarding liquidated damages against Verizon:

The court must award liquidated damages unless the employer proves to the satisfaction of the court that the act or omission which violated the FMLA was in good faith and that the employer had reasonable grounds for believing that the act or omission was not a violation of” the FMLA.

This, Verizon was unable to do.

Pings for Employers

   We sound like a broken record, but you must TRAIN YOUR SUPERVISORS AND MANAGERS on employee rights and employer obligations under the FMLA. Without that ill-advised comment in Suzette Walker’s 2013 mid-year review, Verizon might have succeeded in defeating her FMLA claim.

Training might also have enabled Verizon to avoid the liquidated damages by being able to show a good faith effort to educate its supervisors on employee rights and employer obligations under the FMLA.

In all your processes, treat employees who have taken or are taking FMLA leave consistently with employees who have not.

    Follow your established procedures when applying discipline, assessing layoff, or otherwise affecting the employment of an employee who has taken or is taking FMLA leave.

 

Walker v. Verizon Pennsylvania, LLC (E.D.Pa. August 25, 2017)