How the Family Medical Leave Act (FMLA) Affects Your Business
The Family Medical Leave Act (FMLA) was signed into law in 1993. It was set up to balance the needs of employers and employees in circumstances when employees must take extended medical leaves for serious medical conditions, including pregnancy, or caring for family members. The basic provision of the law is to require employers to give time off to employees and allow them to return to their jobs at the end of the leave without penalty.
The federal FMLA law doesn't require employers to pay for the leave if the employee does not otherwise have paid time off (sick days, vacation, personal days).
New Family Leave Tax Credit for Businesses
The recent Tax Cuts and Jobs Act included a new tax credit for businesses who offer paid family leave to employees. This tax credit is available for 2018 and 2019 only (unless the credit is extended).
Briefly, here's how this new tax credit works: Your business must have a written policy to provide at least two weeks of paid family leave to "qualifying" full-time employees (pro-rated for part-time). The amount of the benefit must be at least 50% of the employee's normal pay, and you can't require the employee to use their regular paid time off for this time.
You can then claim the tax credit on your business tax return for the year you provided the benefit. This article on how to get a family leave tax credit for your business to find out more details.
You can't take the tax credit if paid leave is required by your state's law. Speaking of state family leave laws:
State Family Leave Laws
According to MarketWatch, as of April 2019, five states (California, New Jersey, Rhode Island, New York, and Washington) and Washington, D.C. have family leave laws. These states require employers to give paid family leave to employees. The requirements differ for each state, so check with your state's employment division for more information.
When Your Business Must Comply With the FMLA
The FMLA was set up primarily to affect larger employers. The framers of the law recognized that businesses with a small number of employees would have a difficult time giving employees long-term time off. The law sets up definitions for employers who must comply with the law and for eligible employees.
A "covered employer" is an employer: "who employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year."
Eligible employees are those who:
- Have worked for their covered employer at least a year (not necessarily consecutive), and
- Have worked at least 1,250 hours during the 12-month period immediately before the leave, and who
- Work at a location where at least 50 employees are employed at the location or within 75 miles of the location.
What are the main regulations of the Family Medical Leave Act?
FMLA provisions require employers to grant eligible employees up to 12 weeks of unpaid leave, for one or more of the following:
- for the birth and care of the newborn child of the employee;
- for placement with the employee of a son or daughter for adoption or foster care
- to care for an immediate family member (spouse, child, or parent) with a serious health condition; or
- to take medical leave when the employee is unable to work because of a serious health condition.
The term "serious health condition" is defined specifically in the law.
How Does the FMLA Work with Disability Benefits?
If your company provides short-term or long-term disability benefits to employees, this coverage doesn't affect your requirements under the FMLA. The FMLA provisions don't require that employees are paid. The disability benefits provide the payment.
What Else Should I Know about FMLA Regulations?
Medical certification is required to be presented to the employer to validate the reason for the leave request.
The FMLA does not require the employer to pay the employee; it is intended only to protect the employee's job and status during this time. Pay for the employee is determined by the availability/use of sick time/vacation/personal days, and by any long-term disability coverage. The law states that
"Employees may choose to use, or employers may require the employee to use, accrued paid leave to cover some or all of the FMLA leave taken."
The 12 workweeks do not have to be consecutive, nor are employees required to take complete days. The employee may take intermittent leave or work on a reduced schedule, the time in any increments and periods of time allowed by the employer.
The employer is required to continue health benefits (including family coverage) for an employee who is on FMLA leave.
The FMLA Guidelines state:
Upon return from FMLA leave, an employee must be restored to his or her original job, or to an "equivalent" job, which means virtually identical to the original job in terms of pay, benefits, and other employment terms and conditions. In addition, an employee's use of FMLA leave cannot result in the loss of any employment benefit that the employee earned or was entitled to before using (but not necessarily during) FMLA leave.
Employers must display a poster in a "conspicuous place" in each location, letting employees know about FMLA provisions, and employers must comply with FMLA recordkeeping and reporting requirements of the DOL/WHD.
Where Can you Find Details From The Federal Government?
The FMLA is administered by the U.S. Department of Labor's Wage and Hour Division, FMLA regulations. Check out their Resources for Employers section for more information.