Friday, April 2, 2010

Claryfing FMLA Service and Benefit Rules


To be eligible for FMLA leave, an employee must have worked 1,250 hours in the preceding 12 months. The employee argued that the employer should have given her credit toward the 1,250 hours for the time she was on a prior FMLA leave.  Without these hours, she didn't have enough for her second leave to qualify for FMLA protection.  The court disagreed:

There is no basis for such a contortion of the statute—no hint in the statute or elsewhere that Congress envisaged and approved such a circumvention of the requirement that an applicant for FMLA leave have worked 1,250 hours in the preceding 12 months.
The second issue addressed in the decision was more interesting.  It takes a little explaining but it is worth it.  Employers commonly have absenteeism policies that accrue points for employees per absence.  Points are then  removed when the employee has worked a defined period of time.  The Seventh Circuit decision, the absenteeism policy provided for termination when the employee reached 8 absenteeism points in the preceding 12 months.  A point is then removed 12 months after it is imposed.  The 12 months period, however, excluded time spent on leave so that if an employee took a two month leave during the 12 months, the employee would have to avoid accruing 8 points over a 14 month period.  This practice has considerable  logical appeal.  If an employer cannot count the period an employee is on FMLA leave toward the absenteeism point system then it makes sense to exclude that period from the period counted.  It is crucial, of course, that the policy apply to all leaves not just FMLA leaves.

The employee argued that expanding the 12 month period for while she was on FMLA leave denied her a benefit and the FMLA provides that taking FMLA leave “shall not result in the loss of any employment benefit accrued prior to the date on which the leave commenced.” 29 U.S.C. § 2614(a)(2).  

The court agreed that removing points after 12 months was an employment benefit protected by the FMLA but ultimately ruled the employer had not retaliated against the employee by extending the 12 month period.  

The FMLA prohibits loss of benefits only when those benefits have "accrued prior to the date on which the leave commenced." 29 U.S.C. § 2614(a)(2) and the FMLA further provides that it does not entitle an employee to "the accrual of any  . . . employment benefits during any period of leave."  So, the court explained:
If removal of absenteeism points. . . is an employment benefit, it is one that accrues 12 months after an absence. Until then the employee has no right to have an absenteeism point removed. An employee who worked for 11 months and was on leave the other month (say he began work on January 1 and was still employed on December 31, but was on leave during the month of July) cannot add the month that he was on leave in order to obtain a benefit available to an employee who  worked for 12 months rather than 11, because the employee is not entitled to “the accrual of any . . . employment benefits during any period of leave."
While the decision upholds the employer's practice it also demonstrates that employers must be careful when  designing a "no fault" absenteeism program so that it does not run afoul of the FMLA.