3 Tips for Avoiding Liability Traps in Employee Leave Policies

As many businesses across the country are updating their leave policies, we offer the following three (3) tips to avoid employers’ liability traps in employee leave policies.

Tip #1 – Review your leave policies for compliance with the Fair Labor Standards Act.

Unless your organization has a “bona fide benefits plan,” exempt employees’ salaries may not be reduced for absences due to illness or disability without violating the Fair Labor Standards Act (FLSA) “salary basis” test. According to Department of Labor (DOL) opinion letters, a “bona fide benefits plan” must include, among other things, a reasonable number of paid sick days. Of course, the plan may include eligibility criteria, including a minimum service requirement.

Tip #2 – Clarify your leave obligations for pregnancy, childbirth, and related medical conditions.

Even if your organization is not covered under the Family Medical Leave Act (FMLA), your employees may still have leave rights for pregnancy, childbirth, or related medical conditions. Although the FMLA only applies to organizations with 50 or more employees, the Pregnancy Discrimination Act (PDA) applies to organizations with as few at 15 employees. Under the PDA, women affected by pregnancy, childbirth, or related medical conditions may be entitled to leave to the same extent as sick or disabled employees.

Tip #3 – Carefully check applicable state laws for other forms of leave.

Where applicable state law provides employees with more rights than federal law, employees are generally entitled to the rights provided by state law. For example, although the FMLA applies only to employers with 50 or more employees, some state-specific family and medical leave laws apply to smaller businesses.

BONUS TIP – Stay up to date on regulations and guidance released under the Families First Coronavirus Response Act.

According to recent DOL guidance, in 2020, employees have only one “bite at the apple” for the Families First Coronavirus Response Act (FFCRA)’s paid sick leave and expanded family and medical leave. For example, if an employee exhausted his or her 12 weeks of expanded family and medical leave due to school closings in March and April 2020, the FFCRA does not (presently) entitle the employee to another 12 weeks of expanded family and medical leave if schools are still closed in September. As another example, if an employee exhausted his or her two weeks of paid sick leave prior to being furloughed, the FFCRA does not entitle the employee to another two weeks of paid sick leave upon returning from furlough.

If you have any questions about any of the above, please contact Hall Benefits Law. We would love to hear from you, and the HBL team looks forward to serving as your risk management partner!

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.
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