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A brief phrase in Department of Labor regulations implementing the 1993 Family and Medical Leave Act, 29 U.S.C. � 2601 et seq, can cause problems for in-house counsel whose companies enforce a no-fault attendance policy. The FMLA entitles a qualifying employee to take up to 12 workweeks of leave in a 12-month period. According to � 2615(a)(1), an employer may not “interfere, restrain, or deny the exercise of, or the attempt to exercise any right” provided under the FMLA. DOL regulations at 29 C.F.R. 825 prohibit an employer from refusing to authorize leave, discouraging the use of leave, engaging in “manipulation” to avoid FMLA responsibilities, discriminating against employees who have used FMLA leave, or using FMLA leave as a negative factor in employment actions, including disciplinary actions. At � 825.220(c), the regulation specifically states “nor can FMLA leave be counted under ‘no fault’ attendance policies.” These 10 words seem to be almost an afterthought, but their impact is significant. The regulations do not define what is meant by a “no-fault” attendance policy, but it is generally understood to be a policy in which any absence from work, except those absences specifically excluded by the policy — such as vacation, holiday, jury duty — are tracked. When an employee reaches a certain number of such absences in a prescribed time frame, discipline results. These types of policies are commonplace, particularly for rank-and-file employees. As an example, assume an employer has an attendance policy providing for progressive discipline resulting in termination of employment when an employee accumulates 10 absences from work during a 12-month period. An employee reaches the 10-absence level and is discharged pursuant to the policy. The regulations, and recent court decisions, make it clear that if any of those absences were for FMLA-qualifying reasons, the employer can be held liable for interfering with the exercise of the employee’s rights under the FMLA. Accordingly, if an employee, discharged pursuant to such a policy, brings suit alleging interference with FMLA rights, the employer can expect every absence assessed against the employee to be scrutinized. Thus has the FMLA caused attendance control policies to become a source for liability if the employer’s attendance policy, intentionally or unintentionally, counts any FMLA-qualifying events against the employee’s absenteeism total. To avoid this result, it is essential to: 1. properly structure the attendance policy and 2. administer FMLA leave in accord with DOL’s technical regulatory requirements. STRUCTURING POLICIES Here’s what in-house attorneys need to do to help their companies avoid legal exposure for miscounting FMLA absences and punishable absences. Assume the requirement against counting FMLA absences applies to all attendance policies. The reference to no-fault policies likely was made to emphasize that the rule applied even to those types of policies. Review the company’s policy to ensure that FMLA leave is explicitly excluded from consideration. If not, revise it. At the same time, consider reducing the number of allowable absences under the policy if the number of allowable absences under the policy has not changed for some time. For example, if the policy allows 10 absences per year, including absences that must be excluded under the FMLA, then FMLA usage should be evaluated to determine whether and to what extent to reduce the allowable absence total. Keep in mind that the downside of reducing allowable absences is that FMLA leave requests will likely increase, particularly among employees facing discipline based on attendance. Many absenteeism policies place an errant employee on a program lasting for a set period of time during which time the employee must demonstrate improved attendance. Such a program may provide that the period of time is extended by any time missed. If the period of time is extended by the use of FMLA leave and the employee is discharged during the extended period, this could arguably constitute interference with FMLA rights. For example, in Schmauch v. Honda of America (2003), the U.S. District Court for the Southern District of Ohio found a material fact issue existed as to whether the employer’s policy of extending the length of an attendance improvement program when FMLA leave was taken interfered with FMLA rights. Some employers require that an employee offered light duty accept the assignment as a condition of employment. However, if the employee qualifies for FMLA leave due to his own serious medical condition, DOL regulations at 29 C.F.R. � 825.220(d) and � 825.702(d)(2) make it clear that an employee is free to turn down the assignment. Attendance bonus programs should not penalize an employee from receiving the bonus due to the use of FMLA leave. However, employers may not want to reward employees for perfect attendance when the employees are out on FMLA leave. If the eligibility period for the bonus is a set period of time, in-house lawyers might consider changing the eligibility criteria to actual hours worked. For example, a company could award a “well day” — a performance incentive couched in the reverse terminology of the old entitlement “sick day” — for every 1,000 hours worked, instead of for perfect attendance in a six-month period. An employee who took FMLA leave would not be harmed or unfairly rewarded with this type of policy change. SOME SAFEGUARDS The other source of potential liability under the FMLA is failing to administer FMLA leave properly. DOL has required notice and then more notice to employees of their FMLA rights. This is interesting, because the only requirement for notice in the statute is that the employee notify the employer of the need for leave. The regulations require that employers notify employees of FMLA rights in a variety of ways, including detailed posting requirements, inclusion of FMLA rights in employee handbooks, and just to be sure, individualized notice when an employer becomes aware that an employee may be eligible for leave. In-house attorneys should review employer procedures to ensure that the company is meeting these notice requirements. Training supervisors to recognize potential requests for FMLA leave and to forward such requests to the company’s FMLA administrator is critical. In the U.S. Supreme Court’s 2002 decision in Ragsdale v. Wolverine World Wide Inc., justices overruled a DOL regulation providing that failure to notify the employee that leave would be designated as FMLA meant any leave taken could not be counted against the 12-week entitlement. The defendant in that case was forced to argue the regulation was invalid because it had not provided the notice required under the regulation. To reduce abuse of FMLA leave, employers should consider the safeguards afforded them. Employers with high FMLA usage should review their policies to utilize available options fully, including: � Granting leave for eligible employees only, those with one year of employment and 1,250 hours worked in the previous 12 months (including use of a rolling 12-month period). To fall under the ambit of FMLA, the employer must have at least 50 employees within a 75-mile radius of the worksite; � Requiring certification — as allowed under the regulations — of the need for leave, in particular medical certification, which is crucial when an employee requests intermittent FMLA leave, a rich source for abuse of FMLA leave by employees; � Designating certain absences as FMLA leave; � Revising a company’s sick leave policy; and � Adjusting the company’s insurance coverage to limit the definition of “health care provider.” The DOL notice, posting and individualized notification regulations have made compliance with the FMLA much more complicated for companies. However, unlike other employment statutes such as Title VII, the FMLA allows a suit against not just the company, but against “any person who acts, directly or indirectly, in the interest of an employer to any of the employees of such employer.” This potential for individual liability helps provide the impetus for assuring that attendance policies and procedures conform with the FMLA and DOL’s implementing regulations. Kent McCulloch has been board certified in labor and employment law by the Texas Board of Legal Specialization since 1997 and has practiced in that field with law firms and in-house for more than 20 years. He is currently president of and manages labor relations for StarTran Inc., a company employing nearly 1,000 bus drivers, mechanics and administrative personnel in Austin. If you are interested in submitting an article to law.com, please click here for our submission guidelines.

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