Furloughs and FMLA Ineligibility: An Unexpected Consequence

by Armando Rodriguez, JD - Law Clerk, Compliance And Legal Department

& Marti Cardi, Esq. - Vice President, Product Compliance

March 15, 2021

 

We’ve been getting a lot of questions lately concerning the impact of furloughs on employee FMLA eligibility. After all, COVID-19 related lockdowns started as early as a year ago – not an anniversary anyone likes to celebrate. And unfortunately, after lengthy furloughs, many long-time employees are no longer eligible for FMLA.

But let’s take a moment. First:

A quick refresher on FMLA Eligibility

The federal Family and Medical Leave Act (FMLA) provides eligible employees of covered employers with 12 weeks of job protected leave for the employee’s own serious health condition, to care for a family member’s serious health condition, for bonding with a new child, and for certain reasons related to a family member’s military service or injury. To be eligible for FMLA, the employee must, among other requirements, have worked for the employer a minimum of 1250 hours during the 12 continuous months prior to the date the leave is to start. (Special rules apply to flight crews and employees out on USERRA-protected military leave.)

Whether an employee has worked the minimum 1,250 hours of service is determined according to the principles established under the Fair Labor Standards Act for determining compensable hours of work. To simplify, hours worked are just that – hours actually spent working. (OK, so there can be additional paid hours like on-call time, “donning and doffing” required clothing or equipment, etc., but why complicate things?)  

Another FMLA eligibility requirement is that the employee must have worked for the employer for 12 months at the time of commencement of a leave. We’ll take on how furloughs might impact that requirement later in this post, so check below.

Furloughs

As we know, many employers have had to “furlough” employees during the COVID pandemic. What does that mean? There is no precise legal definition, but a furlough is generally understood to be time the employer forces the employee to take as time off. With a furlough, there is an expectation that the employee will return to work at some point in the future: the employee is kept on the employer’s “roster,” and sometimes even gets continued benefits (depending on the employer’s policies). Contrast this with a layoff, which is an end of the employment relationship with no expectation of return to work. 

Time spent on furlough does not count as hours of service; it is not time worked. So, it is entirely possible that long-time employees who have been FMLA eligible in the past may not meet the hours worked requirement this year due to a lengthy furlough. (Generally, an employee who works a typical 40-hour week will lose FMLA eligibility if furloughed for about 21 weeks in the 12 months prior to the requested leave.)

Ok, so what now?

Just because the employee is no longer eligible for a new FMLA leave doesn’t necessarily mean that the leave is unprotected. There are many things to remember here:

First, an employee only has to establish FMLA eligilbity for a given leave reason once in a leave year, when the leave for that reason first commences. Eligibility then lasts for the 12 months following the start of the leave.  

Take the example of Roberto: He works 40 hours per week and met eligibility to care for his mother with a serious health condition for leave starting on May 1, 2020. He was then furloughed on June 1, 2020, and returned to work on January 1, 2021. Even though he was off work for 7 months, Roberto will retain FMLA eligibility to care for his mother through April 30, 2021. He might not be eligible for FMLA leave for another reason, but he can use any remaining FMLA entitlement (up to 12 weeks) to care for his mother if needed.

Second, you must also consider applicable state job-protected leave laws. After returning from a furlough, an employee might have (or regain) leave entitlement from sources other than the FMLA. For example, Oregon’s Family Leave Act (OFLA) only requires that the employee has worked an average of 25 hours per week in the prior 180 days. So, an employee may regain OFLA eligibility before regaining FMLA eligibility after furlough. Or consider Connecticut’s and Washington D.C.’s Family and Medical Leave acts, which only require 1000 hours in the 12 months prior to the leave. And to complicate matters more, many of the new paid family and medical leave laws have much lower eligibility rules and still carry job protection (e.g., Massachusetts, Washington, and others). State and local paid sick leave laws may provide additional rights for at least short absences.

Third, if the employee is requesting leave for his or her own serious health condition, consider whether the employee is entitled to a leave of absence or other accommodation under the Americans with Disabilities Act (ADA). The ADA defines disability as a physical or mental impairment that substantially limits one or more major life activities. An employee’s serious health condition could also be a qualifying disability under the ADA and you may have an obligation to provide the employee with leave as an accommodation. Go through the interactive process! That being said, the ADA only applies to the employee’s own health condition and would not provide leave for other FMLA reasons such as caring for a family member or bonding.

Consider updating your policy

The FMLA eligibility inquiries we are currently getting are often from frustrated employers who want to enable their employees to take FMLA leave despite the lack of eligibility. But, any leave taken without eligibility cannot be counted toward the employee’s use of FMLA entitlement. To do so might deprive the employee of later FMLA leave and land the employer in hot water for interference with FMLA rights.

Alternatively, consider an update to your company’s leave policy to provide a leave for FMLA ineligible employees under specified circumstances that you choose. Anything offered in addition to the FMLA can be as stringent or generous as you see fit. However, in order to avoid possible discrimination claims, the policy must be applied uniformly, not on a case-by-case basis. Additionally, even if a company leave is offered, if the leave is for an employee’s own condition, there may still be ADA implications that will need to be addressed.

What about the 12-month requirement?

Above we noted an additional FMLA eligibility requirement: that the employee must have worked for the employer for 12 months at the time of commencement of a leave. It’s pretty well understood by now that the 12 months are a total and do not have to be consecutive. Any time worked for an employer, separated from other periods of employment by less than 7 years, all count toward the 12 months.

But for a relatively new employee, does furlough time count toward the 12 months? The answer is maybe. FMLA regulations provide:

If an employee is maintained on the payroll for any part of a week, including any periods of paid or unpaid leave (sick, vacation) during which other benefits or compensation are provided by the employer (e.g., workers' compensation, group health plan benefits, etc.), the week counts as a week of employment. 29 C.F.R. § 825.110(b)(3).

So if you generously continued benefits such as health insurance for your employees during furlough, the period of furlough counts toward establishing 12 months of service for FMLA eligibility. This means that an employee hired shortly before a furlough (and receiving benefits during the furlough) could actually satisfy this aspect of FMLA eligibility while not working.

Example: Carrie started work for your company on March 1, 2020. She is furloughed from June 1, 2020 to the present. Carrie established her 12 months of employment on February 28, 2021, even though she was still not working and had actually “worked” for you for 3 months. Carrie does not need to satisfy this eligibility requirement again; it will last throughout her employment with you. When she returns to work, she will be FMLA eligible as soon as she has worked 1250 hours in the prior 12 months.

Matrix Can Help!

Matrix offers numerous absence and disability management services. Be it leave as an accommodation, state and federal leave laws, disability plans, or managing company policies, our team of absence management and ADA specialists are ready to help you and your employees. For more information about our solutions, please contact your Matrix or Reliance Standard Life Insurance account manager, or reach us at ping@matrixcos.com.