Managing FMLA – Tips & Tricks

Employers should never take a leave from dealing with the Family and Medical Leave Act’s (FMLA’s) requirements. The FMLA entitles eligible employees of covered employers to take up to 12 weeks unpaid, job-protected leave in a 12 month period for specified family and medical reasons. It guarantees continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Check out these common sense tips for managing FMLA.

Requesting FMLA

Managers sometimes fail to tell HR right away when an employee is out on leave for an extended period. If a manager waits a week to inform HR, that could delay the start of the 12-week FMLA period. The employer can’t make the FMLA leave retroactive. Additionally, letting the employee take more than 12 weeks of leave impacts staffing and productivity. Effectively managing FMLA requires proactive measures to ensure time is properly entered and accounted for. MITC allows employees to request FMLA like any other benefit time. If the manager fails to act on the request, the Manager is reminded and HR notified. The employee is not paid for these hours but the hours are tracked.

No Exact Count of Use of FMLA Leave

Another common mistake in managing FMLA is failing to keep an exact track of an employee’s use of FMLA leave, particularly in regards to intermittent leave. An employer might give the employee more FMLA leave than entitled to. MITC Workforce Management allows organizations to track FMLA. Total hours allowed (480), hours taken, and hours remaining can be tracked. As employees are allowed to take FMLA in as little as 15 minute increments, having a robust, accurate system in place is important.

Train Supervisors on Managing FMLA

Untrained supervisors might not handle FMLA requests appropriately, and may be in violation of the FMLA. Just because front-line supervisors shouldn’t administer FMLA leave doesn’t mean they shouldn’t be trained on managing FMLA.

Missed Notices

Employers sometimes fail to provide required notices to employees. FMLA requires employers to provide four notices to employees seeking FMLA leave. Employers may run afoul of the law by failing to provide these notices. Employers must give a general notice of FMLA rights. They must provide an eligibility notice within five days of the leave request. They must supply a rights and responsibilities notice at the same time as the eligibility notice. And employers must give a designation notice within five business days of determining that leave qualifies as FMLA leave.

Overly Broad Coverage

Sometimes employers provide FMLA leave in situations that are not truly FMLA-covered. If the employer counts that time off as FMLA leave, this could prove to be a violation of the law. A violation could occur if the employee later has an event that falls under FMLA which is denied due to time already taken.

Incomplete Certifications

Employers sometimes accept certifications of a serious health condition that are incomplete and inconsistent. In particular organizations sometimes make the mistake of accepting certifications that do not state the frequency and duration of the intermittent leave that is needed.

No Exact Count of Use of FMLA Leave

Another common mistake in managing FMLA is failing to keep an exact track of an employee’s use of FMLA leave, particularly in regards to intermittent leave. An employer might give the employee more FMLA leave than entitled to. MITC Workforce Management allows organizations to track FMLA.

Being Lax About FMLA Abuse

The FMLA is ripe for employee abuse. Some employers find themselves with large numbers of employees with certified intermittent leave. Those employers need a plan to keep all employees honest with respect to their use of FMLA.

Overlooking the ADA

Employers sometimes fail to realize that a serious health condition that requires 12 weeks of FMLA leave may also constitute a disability under the Americans with Disabilities Act (ADA). Even after 12 weeks of FMLA leave, more leave may be required by the ADA or state or local law as a reasonable accommodation.

FMLA Policy

Employers should have a written FMLA policy. If employers adopt a written policy that is circulated to employees, the employer is able to select the terms most advantageous to the employer. For example, employers can choose to use a rolling 12-month period (rolling forward from the time any leave commences) rather than leaving the selection of the 12-month period to employees, who almost inevitably would choose the 12-month calendar period. The calendar period, unlike the rolling period, allows for employees to stack leave during the last 12 weeks of one year and the first 12 weeks of the new year.

MITC FMLA Solutions

  1. Employees can request FMLA from any location using any internet enabled device. FMLA requests go to the employee’s manager for approval. On approval, non-payable records go through to the employee’s time and attendance records. If the employee is scheduled to work, their shifts are automatically re-opened.
  2. Thereafter, either the manager or HR can document additional hours the employee is on FMLA. In the event that a manager fails to respond to the employee’s request promptly, an alert is automatically generated. A complete history of FMLA requests is automatically maintained. The employee is not paid for these hours but the hours are tracked.
  3. A balance of the hours allowed can be established and automatically updated by FMLA transactions whether initiated by the employee, their manager, or HR. For example, if the employee has taken 200 hours the remaining balance would be 280 hours. A detailed record of all transactions is retained.
  4. If the employee requests more than 480 hours of FMLA, the request will be blocked.
  5. HR can enter the 480 hours into the employee record when the FMLA time commences.

 

Fixed Hours Method for Non-Exempt Employee Overtime

Capitol Building with text :Overtime Updates"As a result of the changes to the FLSA salary level test, many employers may need to convert some of their currently exempt employees to non-exempt. They may also need to educate themselves on methods for paying non-exempt employee overtime.

Changing employees to non-exempt will result in an additional administrative burden for employers. In some cases, it will also create morale issues. Newly reclassified employees may feel they have been forced to take a step backwards in their careers.

Can you pay a salary to a non-exempt employee?  The answer to the question is yes: A non-exempt employee may be paid a salary. however, the employer must still pay the non-exempt employee overtime and meet minimum wage, record keeping, and other obligations of FLSA.  The question is triggered by a misconception, namely that only exempt employees can be paid a salary.

There are different methodologies to pay a non-exempt employee overtime in addition to a salary: Fixed Salary for a set number of hours, Fluctuating Work Week, or what is called a Belo Contract. The most common method used today is a fixed salary for a set amount of hours.

Fixed salary for an agreed-upon, set number of hours worked per week

Under this method, the employer and the employee must have a clear understanding, in writing, of how many hours per week the fixed salary represents. The number of hours used to set the salary can be fewer than, equal to, or greater than 40 hours in a work week.   The salary can be any amount as long the amount, divided by the number of hours worked, is equal to or greater than the federal (and applicable state and/or local) minimum wage. In order to determine this rate, called the regular hourly rate, employers should take the salary amount and divide it by the agreed upon number of hours.

Paying a salary for a fixed workweek works best for employers whose employees’ schedules rarely fluctuate, such as administration. In practical terms, it assures both the employee and the employer of a set amount of base pay every pay period. It is also often used by employers that pay semi-monthly that have regularly changing base hours in a pay period due to the differing number of work days in a given month.

Employees being paid by this method must be paid one-and-one-half times their regular hourly rate of pay for each overtime hour worked over 40 hours in a workweek.  If the employee works fewer than the agreed-upon number of hours, the employer is only required to the pay the actual number of hours worked.  Here are examples of how a to apply the fixed hours method for non-exempt employee overtime.

Salary based on 40 hours regularly worked per week

In this method, the employer pays a salary for the first 40 hours worked and pays non-exempt employee overtime for the hours worked over 40 hours.

Mary is an HR Coordinator making $36,400 annually based on working 40 hours per week. Her weekly salary is $700 per week ($36,400/52 weeks).  Her regular hourly rate is $17.50 ($700/40 hours).  If Mary has an unusual week and works 45 hours, her employer will owe her an additional five hours of overtime paid at a rate of time-and-one-half ($26.25/hour).  Her additional overtime owed is $131.25 plus $700 for her regular weekly salary, for a total of $831.25 for that week.  If Mary only works 35 hours that week, Mary only has to be paid for the time that she worked. Her regular rate of pay is $17.50 times 35 hours for a total compensation of $612.50.

 

Salary based on working more than 40 hours per week

In this scenario, employers have two options for paying the salary.  The first will involve paying a straight time salary for more than 40 hours worked in a week and paying an additional half-time overtime premium for overtime hours already in the base.  Any overtime hours worked over the base amount in the salary will need to be paid at one-and-one-half time the regular rate.  The second option will involve the employer paying the salary inclusive of the entire overtime rate. For example, if the employee works more than the set number of hours, the additional hours must be paid at one-and-one-half times the regular rate. In both cases, if the employee works fewer than the agreed-upon number of hours, the employer is only required to the pay the actual number of hours worked plus the appropriate amount of overtime if applicable.

Example 1:

Mary makes $36,400 annually based on working a regular 50 hour per week schedule.  Her weekly salary is $700 per week ($36,400/52 weeks).  Her regular hourly rate is $14.00 ($700/50 hours).  In a regular 50-hour week, her employer would owe her an additional half-time of overtime ($7.00 per hour) for the 10 hours worked over 40. She would be owed an additional $70.00 on top of her weekly salary of $700.  Her base salary of $36,400 plus her half-time overtime earnings of $3,640 annually would equal $40,040.  If Mary works 55 hours in one week, her employer would need to pay her an additional five hours at time and one half because her weekly salary does not cover payment for those hours ($21 x 5 = $105.00)

Example 2:

Mary has an agreement with her employer that she is paid $40,040 annually for a regular 50 hour a week schedule.  This is inclusive of 40 hours paid at straight time and 10 hours paid at time and one half ($29,120 + $10,920 = $40,040).  If Mary works any hours over 50, those additional hours will need to be paid at time-and-one-half as her weekly salary does not cover payment for those hours.

 

Salary based on working less than 40 hours per week

In this scenario, the employer pays a salary for the set number of hours worked less than 40.  Any hours worked between the set amount and 40 are paid at straight time and any hours over 40 are paid at time and one half.

Example 3:

Mary is paid $36,400 annually for working 35 hours per week. Her weekly salary is $700 and her regular hourly rate is $20 ($700/35 hours).  In an unusual week she works 42 hours.  She will be paid the $700 for the 35 hours per week.   She will also be paid an additional $100 for hours 36-40 ($20 x 5) and time and one half for the hours over 40 ($30 x 2 = $60).  Her total earnings for that week are $860.

Employers considering non-exempt employee overtime in addition to salaries should be cautious of the pitfalls of this methodology.  While it can alleviate employee morale issues and continue the perception of being paid salaried similar to an exempt employee, it can result in a number of accidental FLSA violations.  Employers still are required to track all hours worked, ensure that employees are receiving at the least the equivalent of minimum wage, and ensure the proper amount of overtime is paid depending on the methodology used.