State of California M E M O R A N D U M DATE: October 7, 1994 TO: PERSONNEL MANAGEMENT LIAISONSREFERENCE CODE: 94-56 THIS MEMORANDUM SHOULD BE DISTRIBUTED TO: Personnel Officers Labor Relations Officers FROM: Department of Personnel Administration Policy Development Office SUBJECT: Family Medical Leave Act (FMLA) The Department of Personnel Administration (DPA) has received further clarification from the U.S. Department of Labor (DOL) regarding the implementation of FMLA. As outlined below, this may call for more central direction, including regulations, from DPA concerning the manner in which State agencies implement FMLA. This memorandum seeks departmental comments on how DPA should respond to this issue. BACKGROUND FMLA became applicable to excluded State employees in August 1993 and to other State employees in February 1994. This act provides a basic family and medical leave entitlement (up to 12 weeks every 12 months) to public and private sector employees throughout the country. While the State already meets or exceeds many of the minimum leave benefits contained in FMLA, there are certain areas in which FMLA extends new entitlements to State employees. This is particularly true with respect to medical benefits during unpaid leaves. While many of FMLA's provisions are explicit, there are some areas in which the employer has discretion in how it complies. In addition, employers have the option of exceeding the act's minimum requirements, which, as discussed below, can sometimes make it easier to administer. DPA's initial position on this has been to allow each department to decide how it will exercise this discretion, based on its own operating needs and circumstances. In the past several months, DPA has received considerable feedback from departments indicating that the lack of central direction in these areas is causing troublesome inconsistencies among departments. In addition, DOL has informally advised DPA that it views the State of California as a single employer and, therefore, would expect a reasonable degree of statewide consistency in how FMLA is applied. In the absence of this, DOL indicates that it may rule in favor of employees in any appeals arising from differences in how various State agencies chose to comply. Given these circumstances, DPA is re-opening the question of how much central direction it should provide in the State's compliance with FMLA. The major compliance areas affected are discussed below, along with some initial ideas on what central direction might be provided. COMPLIANCE ISSUES Employee eligibility FMLA does not apply to segments of an employer's work force that are located in an area in which there are fewer than 50 of the firm's/agency's employees within a 75-mile radius. This exclusion could apply to State workers in remote locations within California, as well as to State employees who work outside California. Excluding them from FMLA coverage would avoid some potential operating problems in thinly staffed areas and could result in minor savings as the cost of providing up to 12 weeks of FMLA-required health benefits for unpaid leaves was avoided. However, since DOL regards the State as one employer, the application of this exclusion would be quite limited and difficult to monitor. Therefore, if statewide rules are established, it would be DPA's inclination, at this point, to simply cover all State employees, regardless of their work location. Counting FMLA Leave FMLA leave can be taken in time increments as small as one hour. An employee is entitled to up to 12 weeks of FMLA leave each year, provided that they meet the criteria for taking leave. Employers must pay the employee's share of health benefit premiums while they are on leave, even if the employer would not otherwise have made such payments during the time in question. Qualifying leave time can be counted against the employee's 12-week entitlement only when the employer notifies the employee before the end of the leave that it will be so counted. Since there are special entitlements associated with FMLA leave that might not be associated with other leaves granted by the employer (e.g., paying for health benefits during unpaid leaves), it is to the employer's advantage to pre-designate as much qualifying leave time as possible so the 12-week FMLA entitlement can be reduced. On the other hand, there are serious practical problems associated with capturing all of this leave in advance. Since FMLA leaves cannot be designated after the leave is over, the employee's immediate supervisor must be relied upon to know and consistently apply FMLA provisions as leaves are requested. This requires substantial training and can lead to equity and privacy concerns if supervisors act inconsistently or inappropriately. Moreover, given other workload and competing concerns, it is not practical to expect that every one- or two-hour medical appointment will be properly identified and designated for FMLA purposes. DPA initially addressed this issue by asking each department to establish its own threshold for pre-screening leave requests for FMLA purposes. Its intent was to allow each department to strike a balance that fit its particular operating environment. However, many departments are concerned about the inconsistencies that this allows (e.g., Department A could count use of paid sick leave for FMLA while Department B doesn't) and have urged DPA to establish a statewide standard. This is also consistent with the informal direction received from DOL. DPA does not have a specific threshold in mind. Possibilities include counting only unpaid family or medical leaves against the employee's FMLA entitlement or counting all such leaves (paid or unpaid) that exceed a specified minimum duration (e.g., four hours, one day, three days, etc.). DPA would appreciate receiving comments from departments on establishing such a threshold, including specific suggestions or alternatives on what the threshold should be. Establishing the 12-Month Period Employees are entitled to up the 12 weeks of FMLA leave every 12 months. The regulations leave it up to the employer to determine how this will be counted. Possibilities include counting based on a fixed year (i.e., the employee can qualify for no more than 12 weeks of leave within each calendar or fiscal year) or a rolling year basis (i.e., the employee cannot take more than 12 weeks of FMLA leave during any 12-month period). In its initial direction to departments, DPA had suggested that departments use the rolling method, since that is what is required by the parallel State law on family leave. This method also avoids having employees qualify for one continuous 24-week leave (12 weeks at the end of one fixed year counting period plus 12 weeks at the beginning of the next one). If rules are established, it would be our inclination, at this point, to propose that the 12 weeks be counted on a rolling year basis. Key Employees FMLA regulations exempt certain high-level (key) employees from the requirement that employees be reinstated to their former position at the conclusion of their FMLA leave. Key employees are generally defined as those who are among the highest paid 10 percent of the employer's work force. This exemption has limited application, may be difficult to apply, and could raise equity concerns. Therefore, in any family leave regulations, DPA would probably propose that key employees be accorded the same family and medical leave rights as other employees. Fair Labor Standards Act (FLSA) Employees In general, FLSA precludes employers from reducing the leave balances of FLSA- exempt employees when they have absences of less than one day in duration. However, FMLA specifically states that a FLSA-exempt employee who takes FMLA leave in less than a one-day increment may have that counted against his/her 12-week entitlement (but not his/her vacation or sick leave balance) without jeopardizing the employee's FLSA-exempt status. Therefore, in any rules, DPA plans to treat FLSA-exempt employees in the same manner as other employees for the purposes of determining when leave should be counted against the 12-week entitlement. DPA is interested in receiving departmental comments and suggestions with respect to the following questions:  Should DPA provide statewide direction for FMLA, or should it ask DOL for department-to-department flexibility in the administration of this law?  If statewide direction is provided, should it be in the form of guidelines that departments would be encouraged to follow or should it be given through formal regulations that departments would be required to follow?  If central direction is provided, how should it address the areas discussed above?  Are there areas, other than those discussed above, in which statewide direction is needed? If so, what should the direction be? Please send your comments to Sydney Perry by November 14, 1994 at: Department of Personnel Administration Policy Development Office 1515 S Street, North Building, Suite 400 Sacramento, CA 95814-7243 FAX (916) 324-0524, CALNET 454-0524 DPA will use the departmental responses in planning its next course of action with respect to FMLA. We hope to communicate this to departments during December 1994. If DPA decides to establish rules, the process for doing so will include another public comment period in accordance with the Administrative Procedure Act. In the meantime, questions may be referred to Sydney Perry on (916) 445-9244, CALNET 485-9244 or FAX (916) 324-0524, CALNET 454-0524. Peter J. Strom Assistant Chief