Seeking FMLA Assistance
With a new study finding that more employers are opting to outsource FMLA management, experts offer HR leaders advice on what to consider before looking outside for help with handling leave requests.
By Mark McGraw
The Family and Medical Leave Act has been the law of the land since 1993.
Here we are, nearly a quarter of a century later, and employers are deciding that now is the time to start outsourcing FMLA management.
That's according to a recent Disability Management Employment Coalition survey, which found 45 percent of 567 organizations with 1,000 or more employers saying they currently outsource FMLA management. That number stood at 35 percent in 2015 as well as in 2014, according to the DMEC.
For many organizations, remaining FMLA-compliant has become a very time-and-labor-intensive task, says Terri Rhodes, executive director at the DMEC, a San Diego-based non-profit that provides educational resources to employers in the areas of disability, absence, health and productivity.
"There's a lot to keep up with," says Rhodes, noting that a 2016 final rule that redefined "spouse" and uncertainty around the current presidential administration's potential impact on leave laws are among the factors adding degrees for difficulty for HR departments handling FMLA requests.
"There are certain requirements, and there are certain questions -- Are employees eligible for FMLA when they get their medical certification in? Do you have to maintain ongoing communication with a worker when he or she is on leave? Employers are looking for solutions to help them with these requirements and questions.
"We're seeing companies wonder if maybe they're not doing what they should be doing with respect to FMLA and the ADA," continues Rhodes. "And, companies are looking to outsource many different things -- payroll, HR information systems, for example. So I think this is just one more thing that HR is looking at and seeing what makes sense in terms of how it should be handled and by whom."
Looking outside for FMLA management certainly does make sense for some companies, especially those that are already outsourcing other components of their benefits packages, says Cindy Schmitt Minniti, the office managing partner of global law firm Reed Smith's New York office.
"Adding FMLA management is simply cost-effective and logical for employers who already have short- and long-term disability benefits administered by the same outside vendor, given the substantial interplay between disability benefits and FMLA leave."
Minniti attributes the rise in the number of companies outsourcing FMLA management to "the many discrete issues that can arise when dealing with FMLA leave requests and their administration. Simultaneously administering multiple FMLA leave requests can be and often is a full-time job."
Administering FMLA leave can indeed be "time-consuming and tricky," adds Christina Stoneburner, a Morristown, N.J.-based partner and member of Fox Rothschild's labor and employment department.
"For many employers, outsourcing [FMLA management] means they will have some assurances that the technical notice requirements of the FMLA are being fulfilled," says Stoneburner.
"Some employers struggle with ensuring that these leaves run concurrently with each other," she says. "Having one vendor manage all of these leaves helps to ensure that leaves are properly designated and run concurrently when appropriate."
Relieving HR professionals of tasks such as calculating leave eligibility, providing the appropriate notices and guaranteeing that employees submit the required documentation are some of the major advantages of outsourcing FMLA management, says Stoneburner.
Taking the outsourcing route can also offer employers an additional safety net when handling issues related to leave requests, adds Minniti.
And, "as companies continue to transition to automated timekeeping and payroll systems, outsourcing FMLA management can help streamline the process and make it easier to keep track of leave eligibility, especially when intermittent leave is requested," she says, adding that outsourcing might also allow the employer to more easily keep pace with changing paid- and unpaid-leave laws at the federal, state and local levels.
All that said, companies opting to outsource FMLA management must choose carefully, says Stoneburner.
"Some vendors have a better knowledge base than others," she says. "Employers cannot simply trust that the vendor knows what they are doing, and that all of the forms are correct."
Rather, employers should rely on corporate counsel to review a vendor's forms and processes to verify compliance before a contract is entered, says Stoneburner, adding that a vendor's services should include coordination with state family leave laws in states with such regulations.
Before handing over the reins, HR leaders must also "ensure that the outside vendor has all of the information needed to handle FMLA leave requests and their administration on a case-by-case basis," says Minniti. To illustrate the costliness of an employer's failure to do so, she cites a recent federal appeals court case in which the court ruled than an employer violated the FMLA by failing to inquire about an employee's in loco parentis relationship with his sick grandfather before denying the employee's leave request.
FMLA leave is generally not available to an employee in this type of scenario, "unless the grandparent stood in an in loco parentis relationship with the employee," she says. "It is important to provide a vendor with all the necessary information to [make certain] that it would pick up on these sorts of issues."
For most employers, the FMLA is just the minimum with respect to leave, and employees might be entitled to additional leave time beyond what the FMLA provides -- a leave of absence as an accommodation under the ADA, for example, says Minniti. "In this situation, the law requires that the employer engage in an interactive process with the employee, which vendors typically do not handle."
Ultimately, she says, "outsourcing FMLA management might provide many benefits to employers, [but] HR professionals still need to stay involved in the process to ensure compliance with the FMLA, and the other state and federal laws that might be impacted."
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