A Primer on Leave Policies

Question: I just started at a new company and they have many more leave policies than the small organization where I used to work. I'm really confused with how all these policies interact: short-term disability, long-term disability, FMLA leave, etc. Can you explain what each of these policies are and how they are typically implemented? Do they run together? Do employees get paid while on each of these leaves?

Answer: You have entered what employers and attorneys (not so fondly) refer to as the "Bermuda Triangle" of employment law: the Family and Medical Leave Act, the Americans with Disabilities Act and state workers' compensation laws. But this triangle is really more like a hexagon, because state and local laws may provide additional or broader rights than federal law, and employers often choose to implement voluntary policies granting more leave or benefits to their employees as employment perks. For that reason, no two employer's policies are the same. The best way to grasp how all your employer's policies interact is to understand the purpose behind each policy, if there is a law underlying that policy and, if so, when the law applies and what it requires. With this knowledge, you can determine which law or laws are implicated in an employee's situation. If more than one applies, the employee is entitled to the more generous benefits provided under each part of the applicable laws. See DOL, Office of Disability Employment Policy, Employment Laws: Medical and Disability-Related Leave.

The FMLA and ADA are federal laws that need to be considered when an employee has a disability, injury or illness -- regardless of whether job-related -- and needs to take time off. The FMLA is a leave-entitlement law, which allows eligible employees with a "serious health condition," as defined under the statute, to take protected leave from work. 29 U.S.C. §§ 2611(11), 2612. The ADA is an anti-discrimination law prohibiting employers from discriminating or retaliating against individuals with a "disability," which is also a statutorily defined term. 42 U.S.C. §§ 12102(1), 12112(a). The ADA also requires that employers make "reasonable accommodations" for qualified individuals. Although the terms "serious health condition" and "disability" are similar, not every serious health condition under the FMLA is a disability under the ADA and vice versa. For this reason, employers must evaluate each employee's circumstances individually and consider whether one or both laws is applicable.

The FMLA covers employers with 50 or more employees and provides qualified employees who are unable to work due to a serious health condition (and a few other reasons) with up to 12 workweeks of unpaid leave during a designated 12-month period, with very limited exception, and job protection upon a timely return to work. 29 U.S.C. § 2612(a). Employers often -- and should -- have an FMLA leave policy in place highlighting key aspects of the law, such as employee eligibility, rights and how to request leave. Employers should be careful, though, to make sure these policies accurately state the law. Otherwise, they may be found liable under equitable principles if employees rely on the policy's imprecise assertion of the law. See Tilley v. Kalamazoo Cty. Rd. Comm'n, 777 F.3d 303, 313 (6th Cir. 2015).

By having a written FMLA leave policy, employers can choose certain terms to include, such as how to calculate the 12-month period or requiring short-term disability leave and workers' compensation leave to run concurrently with FMLA leave -- meaning any leave days when employees receive those benefits "count" towards the employee's FMLA leave allotment. See 29 C.F.R. § 825.702. If the employer does not provide notice to employees and designate these absences concurrently as FMLA leave, the employee could effectively "stack" any available leave time to which he or she is entitled to under the law. For example, a workplace injury may require an employee to be out from work for 12 weeks on a workers' compensation leave of absence. However, if the employer does not designate this time off as FMLA leave, the employee would be able to use the 12 weeks of workers' compensation leave and still have another 12 weeks available under the FMLA to use for eligible reasons. 29 U.S.C. § 2612(a)(1).

Leave under the FMLA is generally unpaid. Id. § 2612(c). However, employees may receive pay while on FMLA leave in three ways:

First: Employees may choose to substitute accrued paid leave, such as sick or vacation time, or employers can state in their FMLA leave policy that employees are required to use accrued paid time off while out on FMLA leave. Id. § 2612(d)(2).

Second: An employee may receive short-term disability or workers' compensation benefits while out on FMLA leave, which pay a percentage of the employee's salary. If that is the case, concurrent use of accrued paid leave is generally not applicable, with some exceptions: employers may state in their policy that any accrued paid leave must be used during the waiting period before such benefits kick in, and where disability or workers' compensation benefits only provide replacement income for some percentage of an employee's total salary, the employer and employee can agree to use accrued paid leave to supplement the employee's benefits to 100 percent of his or her salary, if state law permits. 29 C.F.R. § 825.207.

Third: States or localities may have applicable laws requiring paid medical and family leave or sick leave. See NCSL, State Family and Medical Leave Laws (July 19, 2016).

Employers with 15 or more employees must also abide by the ADA and thus should consider whether an employee's injury or illness qualifies as a disability. 42 U.S.C. § 12111(5). Disabilities substantially limit one or more of the employee's "major life activities" and generally are not short-term or temporary unless sufficiently severe. Id. § 12102; 29 C.F.R. 1630.2(j)(1)(ix). If the employee has a disability, the ADA requires employers to engage in the interactive process to find out if there is a reasonable accommodation that would allow the employee to perform the essential functions of his or her job. See EEOC, Enforcement Guidance: Reasonable Accommodation and Undue Hardship under the Americans with Disabilities Act (October 17, 2002).

Employers often have policies in place relating to requests for medical leaves of absence, which may include paid medical leave time. If that is the case, the employer must apply the policy consistently and fairly to its employees. But regardless of whether such a policy exists or is applicable to a particular employee, the employer still must consider whether allowing the employee to use accrued paid leave or to take an unpaid leave of absence (including additional leave after FMLA leave runs out) may be a "reasonable accommodation" under the ADA, unless it creates an undue hardship for the employer. See id.; EEOC, Employer-Provided Leave and the Americans with Disabilities Act (May 9, 2016). The ADA does not provide "bright line" rules on how much leave must be provided as a reasonable accommodation, although indefinite leave is generally considered unreasonable under the ADA. See 29 C.F.R. § 825.702; Wood v. Green, 323 F.3d 1309, 1313 (11th Cir. 2003). For information on how much leave is reasonable, take a look at this earlier column: Requesting Additional Leave.

Just like with family and medical leave laws, it is essential for employers to be familiar with the applicable state and local disability laws, which may provide greater rights than the ADA. For example, the New York State Human Rights Law ("NYSHRL") and New York City Human Rights Law ("NYCHRL") apply to employers with 4 or more employees and have different but broader definitions of disability than the ADA. N.Y. Exec. Law §§ 292, 296; N.Y.C. Admin. Code §§ 8-102(5), 8-107. They also may provide broader protections for employees than under the ADA.  For example, unlike the ADA, a request for indefinite leave under the NYCHRL is not per se considered to be an unreasonable accommodation, unless the employer can prove undue hardship. See Vangas v. Montefiore Med. Ctr., 6 F. Supp. 3d 400, 416 (S.D.N.Y. 2014).  The seminal case on this point is the NY Court of Appeals case of Romanello v. Intesa Sanpaolo, SPA (NY. Oct. 10, 2013).

In addition to FMLA leave and/or medical leave of absence policies, employers may also have policies in place relating to short-term disability, long-term disability and workers' compensation, which provide payments to employees who are unable to work due to injury or illness. The key distinction to consider with respect to these policies is whether the injury or illness is job-related. If so, state workers' compensation law will likely apply. If not, then short-term or long-term disability benefits may be payable to the employee, depending on whether state law requires it or the employer chooses to offer such benefits.

Short-term disability and long-term disability are types of insurance that pay weekly cash benefits to employees who are unable to work due to a non-workplace injury or illness. Both STD and LTD insurance pay the employee a percentage of his or her salary for a specified length of time to replace (in part) lost wages, with LTD kicking in after STD coverage ends. A handful of states require employers to provide STD benefits to eligible employees. New York, for example, mandates employers provide, at a minimum, STD payments for up to 26 weeks in the amount of 50 percent of an employee's salary up to a maximum of $170 per week. N.Y. Work. Comp. Law §§ 200, et seq. Thus, employers in New York and the other states with such laws must (at least) provide coverage as dictated by statute.

Even if not required by law, employers often choose to offer STD and LTD coverage (or more generous coverage than required by law) to their employees as voluntary benefits. If that is the case, the employer's policy can state which employees are eligible for the benefits (for example, full-time employees or employees who have worked for a certain length of time), what the applicable coverage is, how to apply for benefits and any leave requirements, such as mandating that the leave run concurrently with the employee's FMLA leave allotment and/or that any accrued sick or vacation time must be used during the waiting period before STD benefits kick in. 29 C.F.R. § 825.702. See, e.g., Murphy v. Samson Res. Co., 954 F. Supp. 2d 1295, 1304–05 (N.D. Okla. 2013).

If the injury or illness is job-related, then workers' compensation laws are implicated. Such laws vary from state to state, so it is essential for an employer to be aware of the applicable state requirements. Just like with STD and LTD, workers' compensation laws relate to compensation an employee receives while unable to work. Although there is no specific leave requirement under such laws, most states prohibit employers from retaliating against employees who seek workers' compensation, which provides a limited form of job protection for employees who need to take leave due to a workplace injury or illness. See, e.g., N.J. Stat. § 34:15-39.1. Workers' compensation leave policies also can require any leave run concurrently with FMLA leave. See 29 C.F.R. § 825.702.

Determining how leave laws and policies interact is very complicated. Because of this, employers should be sure to consult outside counsel to ensure their leave policies are in compliance with federal, state and local laws, and that those policies are being applied lawfully.

Keisha-Ann G. Gray is a partner in the Proskauer’s Labor & Employment Department, resident of the New York office. Proskauer Associate Minia E. Brememstul, an associate in Proskauer's New Orleans office, assisted with this article.

 

Jul 31, 2017
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