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Employer Law Report

‘Tis the Season For Holiday Workplace Issues – Download our Holiday eBook with FMLA Stocking Stuffer – “Three FMLA Holiday Stocking Stuffers: How to Avoid a Big Lump of Coal”

Posted in Leave Administration, Traps for the Unwary, Wage & Hour, Workforce Strategies

We hope you enjoyed our five-part series last week addressing the Top 5 Holiday Headaches for Employers. Due to popular demand, we have compiled this series into an eBook for you and have added a special bonus:

Three FMLA Stocking Stuffers: How to Avoid a
Big Lump of Coal

We couldn’t do a holiday-blog series and NOT include something about every employer’s favorite holiday topic. Like fruitcake, it is a gift that nobody really wants or knows what do with… the FMLA.

Here we tackle three prickly FMLA-holiday questions. First, do holidays count against an employee’s FLMA leave entitlement? Second, how does FMLA work in the case of a week-long plant, office or school shutdown? Lastly, does an employer have to pay an employee on FMLA leave holiday pay?

#1 – Does a Holiday Count Against an Employee’s FMLA Leave Entitlement?

Let’s say you have an employee who is out on FMLA leave from Monday, December 3, 2012 through Thursday, January 31, 2012. Let’s also say that your office is closed Tuesday, January 1, 2013 to celebrate New Year’s Day. Does the January 1, 2013 holiday count against the employee’s FMLA leave entitlement?

The FMLA itself does not directly answer this question, so we look to the general rule for counting FMLA leave during a holiday week. The key here is whether or not the employee is absent for the entire week in which the holiday is observed. In our example, the answer is "yes." Under the FMLA, leave is calculated in workweek increments. While there are some exceptions when employers have to deal with intermittent or reduced schedule leaves when shorter periods of leave of observed, the week is the standard unit. If an employee is out on FMLA for the entire workweek, like in our example, the holiday would count against the employee’s FMLA leave entitlement.

If, however, the employee works part of the week, e.g., if the FMLA leave is certified from Friday, December 21, 2012 through Wednesday, January 2, 2012, then only the days the employee would have been expected to report to work would count against the employee’s FMLA leave entitlement. In this case, the holiday days will not count against the employee’s FMLA leave entitlement unless the employee was otherwise scheduled to work as the FMLA provides:

For purposes of determining the amount of leave used by an employee, the fact that a holiday may occur within the week taken as FMLA leave has no effect; the week is counted as a week of FMLA leave. However, if for some reason the employer’s business activity has temporarily ceased and employees generally are not expected to report for work for one or more weeks (e.g., a school closing two weeks for the Christmas/New Year holiday or the summer vacation or an employer closing the plant for retooling or repairs), the days the employer’s activities have ceased do not count against the employee’s FMLA leave entitlement.
29 C.F.R. § 825.200(h) (emphasis supplied).

Here’s what it looks like in application. In our example, the employee has FMLA leave certified from Monday, December 3, 2012 to Thursday, January 31, 2012. So, the whole week, which includes the holiday, counts against the employee’s FMLA leave entitlement.

Monday

Dec. 31

Tuesday

Jan. 1

Wednesday

Jan. 2

Thursday

Jan. 3

Friday

Jan. 4

FMLA

HOLIDAY

FMLA

FMLA

FMLA

– Count Whole Week as FMLA Leave –

In the second example, where the employee has FMLA leave certified from Friday, December 21, 2012 through Wednesday, January 2, 2012, only Monday and Wednesday count against the employee’s FMLA leave entitlement.

Monday

Dec. 31

Tuesday

Jan. 1

Wednesday

Jan. 2

Thursday

Jan. 3

Friday

Jan. 4

FMLA

HOLIDAY

FMLA

WORK

WORK

– Count Monday and Wednesday
as FMLA Leave –

FMLA leave the employee used for the week. For this, divide the hours the employee missed for FMLA leave over the hours the employee would have worked but for the FMLA leave and get the fraction of FMLA leave to charge the employment’s leave allotment. Using our second example, and an 8-hour workday, here is what that looks like:

Hours missed for FMLA                            16  = 1

Hours would have worked but for FMLA      32     2 

 

Instead of

 

Hours missed for FMLA                            16  = 2

Hours would have worked but for FMLA      40     5 

In our example, the employee missed 16 hours for FMLA leave divided by the 32 hours the employee would have worked that week but for the FMLA leave. Divide the hours missed for FMLA, which is 16, over the hours the employee worked have worked, 32, and you get 1/2 a workweek FMLA used, instead of 2/5 the employee would be charged in a five-day workweek.

If an employer cannot determine how many hours the employee typically works in a workweek, i.e., the employee’s schedule varies from week to week, the employer should take the average number of hours the employee works (including hours worked, leave time used and overtime) taken over the past twelve months. The 12-week period is a look-back period from the date of the leave, not the date of the request for leave. When it comes to overtime, the regulations provide a bright-line rule that if an employee is typically required to work overtime, but is unable to do so because of an FMLA qualifying reason that precludes that employee from working overtime, the overtime hours should be counted against that employee’s FMLA entitlement. This is essentially intermittent leave, and the hours counted against the employee are counted at straight time, not time and a half. Voluntary overtime, however, is not to be counted against the employee’s FMLA leave allotment.

#2 – How Does This Work In Case of a Weeklong Plant, Office or School Shutdown?

If there is a weeklong shutdown, like a plant closing or school shutdown, where employees are not expected to work, the regulations are clear that the shutdown period cannot count against the employee’s FMLA allotment. This is referred to in 29 C.F.R. § 825.200(h), cited above.

#3 – Do Employees on FMLA leave Get Holiday Pay?

Last issue: Do employees on FMLA leave get holiday pay if they are on FMLA leave during the holiday? This issue has presented quite a conundrum, and if you Google this issue, you will be find a number of varying responses.

There are two regulations on point. 29 C.F.R. § 825.09, which provides how an employer must maintain an employee’s benefits while on FMLA leave, provides "[a]n employee’s entitlement to benefits other than group health benefits during a period of FMLA leave (e.g., holiday pay) is to be determined by the employer’s established policy for providing such benefits when the employee is on other forms of leave (paid or unpaid, as appropriate)."

In addition, 29 C.F.R. § 825.215(c)(2), which provides how an employer must maintain equivalent pay, provides:

Equivalent pay includes any bonus or payment, whether it is discretionary or non-discretionary, made to employees consistent with the provisions of paragraph (c)(1) of this section. However, if a bonus or other payment is based on the achievement of a specified goal such as hours worked, products sold or perfect attendance, and the employee has not met the goal due to FMLA leave, then the payment may be denied, unless otherwise paid to employees on an equivalent leave status for a reason that does not qualify as FMLA leave. For example, if an employee who used paid vacation leave for a non-FMLA purpose would receive the payment, then the employee who used paid vacation leave for an FMLA-protected purpose also must receive the payment.

Here’s what these regulations mean: Under FMLA, you treat FMLA leave like you would treat comparable non-FMLA leave. Suppose you have an employee who is taking vacation time during the holiday week and your policy provides that if an employee is on vacation the day before the holiday the employee will get paid for the holiday, but will not get paid for the holiday if the employee is on an unexcused absence the day before the holiday. Now suppose an employee is absent for an FMLA-qualifying reason the day before the holiday. The way you treat that holiday pay may depend on whether the FMLA leave is going to be running concurrent with the employee’s paid vacation leave, or whether it is simply an unpaid leave under the FMLA. If the employee is using vacation, and the employer policy would allow the employee to take holiday pay if they are using vacation the day before the holiday, the employer would have to allow that for the employee on FMLA leave. On the other hand, if an employer does not ordinarily pay an employee for the holiday if the employee is absent on some other kind of unpaid leave the day before the holiday, the employer would not have to pay the employee on FMLA leave. Employers just have to be sure they are treating employee consistently with similar forms of non-FMLA leave under your policies.

This year, the United States Court of Appeals for Eighth Circuit held in Keeler v. Aramark, that an employee out on FMLA leave was not entitled to holiday pay when his employer had a policy of not providing such pay to employees who did not work the day before the holiday regardless of the reason. In Keeler, the employer requested various leaves in the fall of 2007. His FMLA time went through Labor Day, a day the employer typically paid its employees, even though they were not required to work.

The employer’s policy provided that it did not provide holiday pay for any employee on unpaid leave during the holiday, or for any employee who did not work the last regularly scheduled workday before the holiday, unless that absence was previously approved. Pursuant to this policy, the employer did not pay the employee for Labor Day because the employee was absent on the last workday before Labor Day.

The employee sued claiming he was entitled to holiday pay for Labor Day even though he was out on FMLA leave. The employee argued that because the FMLA prohibits an employer from using an employee’s use of FMLA leave as a negative factor in employment actions, he was entitled to the same paid leave he would have received as had he not been out on FMLA leave. The court disagreed and relied on 29 U.S.C. § 825.215(c)(2), set forth above, in particular: “if a bonus or other payment is based on the achievement of a specified goal such as hours worked … or perfect attendance, and the employee has not met the goal due to FMLA leave, then the payment may be denied." Relying on this regulation, the court found that so long as the employer treats other employees who were absent for non-FMLA reasons in the same manner. This regulation, with the employer’s policy of not providing holiday pay for any employee on unpaid leave during the holiday, meant the employee had no claim.

The takeaway here for employers is simple: check your leave policies and check them twice, and make sure you are applying FMLA leave entitlements in conformity with the FMLA and your own policies.