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Final federal Family and Medical Leave Act (“FMLA”) Regulations became effective on January 17, 2009.   In addition to implementing the military family leave entitlements provided by amendments to the FMLA, the revisions provide some needed clarity for employers and include many substantive changes.  Notably, the final regulations specify the remedies for harm caused by interference with FMLA rights and expand the damages available to include “any other relief tailored to the harm suffered.”  Some of the most significant changes are summarized below.

  • Employer Notice Requirements Expanded and Modified:  Under the final regulations, employers must provide four notices to eligible employees:  (1) general notice; (2) eligibility notice; (3) rights and responsibilities notice; and (4) designation notice.   All employers must provide the general notice even if they have no eligible employees.  The time period for providing the various notices has been extended from two business days to five business days.   The final rules clarify that failure to provide required written notice may be considered “interference” with an employee’s FMLA rights.  
  • Employee Notice Requirements Enhanced:  Employees must provide sufficient notice to enable their employers to determine whether the FMLA may apply.  The final regulations also address problems many employers faced under the prior rules which courts had interpreted to permit employees to provide notice to an employer up to two business days after an absence, even if they could have provided notice earlier.  Under the revised rules, employees must comply with the employer’s usual and customary notice and procedural requirements when requesting leave, absent unusual circumstances.
  • Removal of Categorical Penalties Against Employers:   The final rules reflect the US Supreme Court decision in Ragsdale v. Wolverine World Wide, Inc., 531 U.S. 81 (2002)which invalidated the categorical penalty provisions of the regulations for failure to appropriately designate FMLA leave.  Under the new rules, an employer may be deemed liable only when the employee suffers individualized harm from the employer’s failure to follow the notice provisions.  Thus, employers who discover a failure to timely designate FMLA leave may now retroactively classify the leave without incurring liability as long as they provide notice to the employee and the employee has not suffered any harm.  Alternatively, the employer and employee may mutually agree upon the retroactive designation. 
  • Eligibility Period Based on Months of Service Need Not Be Consecutive:  In determining whether the employee has worked 1,250 hours in the 12 months preceding the FMLA leave request, the new regulations permit a seven year gap in service. 
  • Guidance Provided on Definitions of “Serious Health Condition”:   The final regulations maintain the current broad six individual definitions of serious health condition, but provide some additional guidance.  For the definition involving more than three consecutive, full calendar days of incapacity and either: (1) two visits to a health care provider  or (2) a regimen of continuing treatment, the first visit to the health care provide must occur within seven days of the first day of incapacity.  The new regulatory section added the word “full” to clarify that the standard may not be met by partial days and specifies that the requisite visits must be in-person visits to a health care provider.   In the “two visit” situation, the second visit must occur within 30 days of the start of the incapacity.  For the chronic serious health condition definition involving “periodic visits” to a health care provider, the final rules clarify that periodic visits means at least two visits to a health care provider each year. 
  • Changes to Medical Certification Timing and Procedure: 
    o       The new rules increase the time frame within which an employer may request a medical certification from two business days to five business days.  Employers may request medical recertification of an ongoing condition every 6 months.
    o        The new rules specify that the Health Insurance Portability and Accountability Act (“HIPAA”) privacy provisions apply to communications between employers and employees’ health care providers.  In addition to a health care provider, the rules now also permit a human resource professional, a leave administrator, or a management official (but not an employee’s direct supervisor) to directly contact the employee’s health care provider for authentication or clarification, but employer representatives may not ask the health care provider for information beyond that required by the form. 
    o        If an employer finds that a medical certification is incomplete or insufficient, the new rules require the employer to notify the employee in writing of the additional information needed and the employee then has seven calendar days to provide the information requested. 
    o       Employers may now follow the procedures for requesting medical information under the ADA, paid leave, or workers’ compensation programs and use such information in determining an employee’s entitlement to FMLA leave.   
  • Substitution of Paid Leave Streamlined:  Under the prior regulations, different procedural requirements applied to the use of vacation or personal leave than to medical or sick leave.  Family leave was also treated differently than vacation and personal leave.   The modified rules treat all forms of paid leave the same, including paid time off.  The rules also require an employee choosing to substitute paid leave to follow the same procedures that apply to other employees for the use of such leave.   
  • FMLA Leave Time May Be Counted to Deny Bonuses:   The final regulations allow employers to disqualify employees from bonuses or other incentive awards based on the achievement of a job performance goal, such as attendance or product sales, when the employee has not met the goal due to FMLA leave.  Employers must treat employees taking non-FMLA leave in an identical way. 
  • Light Duty Work Does Not Count Against FMLA Leave Time:  In response to at least two courts’ holdings that light duty work may count towards an employee’s 12 week FMLA leave entitlement, the final rules provide that light duty work does not count against an employee’s leave entitlement and an employee’s right to job restoration is held in abeyance during the period of time when the employee performs light duty work. 
  • Fitness for Duty Certifications Modified:  Employers may now request more than a “simple statement” of an employee’s ability to return to work and instead require a fitness for duty certification from an employee’s health care provider stating that the employee is able to resume work and perform the essential functions of the employee’s job.  For intermittent leave, employers may require an employee to provide a fitness for duty certification every 30 days if reasonable job safety concerns exist. 
  • Prospective Waiver of FMLA Rights Specifically Permitted Without Department or Court Approval:  The final regulations resolve a conflict among the United States Courts of Appeals and clarify that employees may voluntarily settle their FMLA claims without Department or court approval.
  • Professional Employer Organizations Distinguished From Traditional Staffing Agencies:  The final regulations clarify that the economic realities test is the proper standard for assessing whether a Professional Employer Organization (“PEO”) is a joint employer.  PEOs typically perform administrative functions for a client employer, such as payroll, benefits and updating employee handbooks.   The final rules clarify that unlike the situation involving traditional placement agencies, the client employer most commonly would be the primary employer in a joint employment relationship with a PEO.   

The new regulations are detailed and lengthy and this alert does not address every modification or discuss the military family leave requirements.   Employers should ensure that human resource and supervisory personnel are trained and familiar with the new regulations so that they properly respond to requests for FMLA leave. Significantly, the new regulations require the employer and the employee to discuss and document any disputes regarding whether leave qualifies as FMLA leave.  In addition, employers will need to revise notices, certification forms, employee handbooks and releases to reflect the new regulations.   The Appendix to the new regulations contains updated prototype forms to assist employers in administering the regulations.     

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