Tag: leave

April 3, 2018

Is Time Off a Reasonable Accommodation?

The Americans with Disabilities Act (ADA) requires employees to provide reasonable accommodations to qualified employees with disabilities. These accommodations can take various forms, including structural modifications to the workplace and scheduling adjustments. The U.S. Equal Employment Opportunity Commission (EEOC) also considers time off from work to be a reasonable accommodation in many situations.

Time Off Under the ADA

Let’s start with a relatively unsurprising conclusion under disabilities discrimination laws. Employers cannot provide employees with disabilities less time off than other similarly situated employees. For example, an employer that allows employees to take vacation time for any purpose cannot exclude an employee with a disability from using vacation time to recuperate from a medical procedure.

Few employers would object to that principle. But many do not consider the possibility that an employee with a disability may be entitled to take more time off than company policies normally allow.

Leave as a Reasonable Accommodation

The EEOC’s ADA regulations define reasonable accommodation to mean modifications or adjustments:

to a job application process that enable a qualified applicant with a disability to be considered for the position the applicant desires;
to the work environment, or to the manner or circumstances under which the position held or desired is customarily performed, that enable an individual with a disability who is qualified to perform the essential functions of that position; or
that enable an employee with a disability to enjoy equal benefits and privileges of employment as are enjoyed by the employer’s other similarly situated employees without disabilities.

EEOC guidance states that: “The purpose of the ADA’s reasonable accommodation obligation is to require employers to change the way things are customarily done to enable employees with disabilities to work. Leave as a reasonable accommodation is consistent with this purpose when it enables an employee to return to work following the period of leave.”

As with other forms of accommodations, additional leave or time off must be reasonable and can be denied if it imposes an undue hardship. Often these issues raise questions of how much leave is reasonable?

The EEOC will not answer this question directly. There is no bright line amount of time off that an employee with a disability must receive under the ADA. Instead, the EEOC has historically taken the position that employers must evaluate each situation individually.

Factors that play into the analysis of reasonableness include

the reason(s) the employee needs leave;
whether the leave will be consecutive (all at once) or intermittent (periodic); and
when the need for leave will end.

Additional factors toward whether time off will impose an undue hardship include

size and skills of the remaining workforce;
ability to temporarily replace the employee; and
whether the time off is foreseeable or unpredictable.

Maximum Leave Policies

Trying to avoid the complicated analysis suggested above, some employers seek to enforce a maximum leave policy. Most commonly, these are for either 6 or 12 months. But some employers use longer or shorter periods.

Under these policies, employers would like to say that no matter the reason for the extended leave, any employee out longer than X months will be removed from the payroll, etc. The EEOC consistently rejects these policies. Sometimes courts allow them, however.

Still, even the risk of EEOC investigation makes it dangerous to try to apply a strict maximum leave policy. Accordingly, it is usually better to build some discretion into the policy. For example, while referencing a general maximum time period, the policy would advise employees that a brief extension of the leave may be available if medically necessary. You could then determine what a “brief extension” means on a case-by-case basis, providing the flexibility the EEOC seeks.

Don’t Let the FMLA Fool You

The federal Family and Medical Leave Act (FMLA) requires employers with 50+ employees to allow eligible employees to take up to 12 weeks off. Qualifying circumstances for FMLA leave include the employee’s own serious health condition.

Employees with serious health conditions often also qualify as employees with a disability under the ADA. Thus, they may be eligible for leave as a reasonable accommodation. And more than 12 weeks off might be reasonable under the circumstances.

Accordingly, employers should almost never automatically terminate an employee’s employment merely because they don’t return to work immediately after 12 weeks of FMLA leave. (In addition to the medical leave scenario, other forms of FMLA leave may also touch on other discrimination protections, such as sex/pregnancy discrimination. Plus, retaliation for taking FMLA leave is itself unlawful.)

Time Off as an Accommodation Can Be Unpaid

Allowing an employee time off as a reasonable accommodation does not mean employers must provide paid leave. As mentioned, if the employee is eligible to use vacation or other paid leave for a portion of the time off, then they should not be denied the opportunity to do so based on their disability. But, if they have exhausted any available paid time (or have none in the first place), then, like the FMLA, the ADA does not entitle anyone to receive paid leave.

Review Your Leave Policies

It is difficult to propose one-size-fits-all advice on this issue, but all employers should seek to avoid facially unlawful leave policies. At a minimum, this includes any wording that directly penalizes qualified employees with disabilities. But most employers should go further and build in flexibility to account for reasonable accommodations, as suggested above. This includes, by the way, so-called “no-fault” attendance policies. (But that will have to be a topic for another day!)

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February 8, 2018

Tax Reform Affects Sexual Harassment Settlements and Employee Benefits

On December 22, 2017, President Donald Trump signed sweeping tax reform legislation. The controversial tax bill includes many changes that directly affect the employment relationship. These range from sexual harassment settlements and paid family and medical leave to reimbursed employee expenses and retirement plans.

Although I am neither a tax lawyer, nor an accountant, I offer a synopsis of these changes here.

Tax Deductions for Sexual Harassment Settlements

In response to the ongoing #MeToo movement, Senator Bob Menendez (D-NJ) introduced a new provision to the Internal Revenue Code’s section on tax deductions for ordinary trade or business expenses. The provision prohibits deductions for:

any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement; or
attorney’s fees related to such a settlement or payment.

The tax reform bill doesn’t expand on the meanings of the terms used in this new provision. That leaves its application open for debate, at least until the IRS issues guidance and begins to apply the restriction to actual returns.

Clearly, this new tax code provision will affect settlements of employment claims. This may include both cases of an asserted claim involving sexual harassment or sexual abuse and those where the employer seeks a general release to cover all employment-related claims. In the latter scenario, the employee may not have specifically alleged sexual harassment/abuse. But a broad release would typically reference Title VII and similar state laws that could encompass sexual harassment claims. Employers (and employees) will need to weigh the trade-off between release coverage, confidentiality, and tax deductibility.

Employer Credit for Paid Family & Medical Leave

Employers can now claim a tax credit starting at 12.5% of wages paid to qualifying employees on family and medical leave. Wages paid must be at least 50% of the employee’s normal wages. The credit increases by 0.25% for each full percentage point by which the employer’s wage payment exceeds 50% of the employee’s normal wages, up to a maximum 25% credit.

To be eligible to take the credit, the employer must provide all qualifying full-time employees at least two weeks of paid family and medical leave each year under a written policy. The employer must also provide part-time employees leave on a pro-rata basis.

Qualifying employees are only those who have been employed for one year or more and whose wages do not exceed $72,000 (in 2018, indexed for inflation).

The credit is limited to 12 weeks of paid leave per employee in a tax year. It is only in place for 2018 and 2019 and does not apply to paid leave mandated by state or local law.

Certain Reimbursed Expenses No Longer Excluded from Employee Income

The 2017 tax reform bill repeals certain exclusions from employees’ taxable income. One such exclusion previously applied for certain moving expenses reimbursed by their employer. Another permitted employees to exclude up to $20 per month of qualified bicycle commuting expenses reimbursed by their employer. Under the new tax law, neither of these exclusions apply between January 1, 2018 and December 31, 2025. Subject to future Congressional action, these exclusions are scheduled to return in 2026.

The reforms also indefinitely eliminated employer deductions for certain transportation benefits provided to employees. Specifically, these deductions applied to up to $255 per month for employee mass transit commuting and parking and up to $20 per month in bicycle costs.

There are also changes to tax treatment of qualified equity grants to employees, employee achievement awards, and length of service award plans.

Retirement Plans

The tax changes also affect employer-sponsored defined contribution plans. It gives employees more time to roll over loan balances to an IRA following plan termination or separation from employment. Under the old rules, employees had 60 days to avoid having the loan treated as a distribution. They now have until the due date for filing that year’s tax return.

Other earlier drafts included additional changes that were ultimately dropped. These included reducing the age for beginning in-service distributions from defined benefit and state and local governmental plans to 59 1/2 and changing rules regarding hardship distributions.

Health Care

The new tax bill eliminates the penalty connected to the Affordable Care Act’s individual mandate as of 2019. The penalty still applies to individuals who haven’t maintained sufficient health insurance coverage in 2017 and 2018.

It also reduces the threshold for claiming itemized deductions for qualified medical expenses from 10% to 7.5% of income in 2017 and 2018. The 10% threshold returns in 2019.

Response to Employment-Related Tax Reform Issues

Most of these issues do not require employers to take action (other than paying taxes differently). However, because they will affect taxation of both the employing organization and the employees, questions are likely to arise. Proactive employers should consider the tax impacts and plan accordingly.

Businesses should seek further guidance from appropriate professionals in considering their approach in response to these developments. Often that will mean accounting or tax law professionals. But it will also include attorneys involved in settling disputes with employees, especially (but not only) those involving sexual harassment allegations. An experienced employment lawyer can also assist in preparing a credit-qualifying paid family and medical leave policy.

The IRS indicates that it will provide updates and resources about the new tax reforms here.

November 30, 2017

A Closer Look at the New York Paid Family Leave Request Forms

The New York State Workers’ Compensation Board has published several forms for use by employees making a paid family leave request. Employees will first be eligible for this leave beginning January 1, 2018. Here we’ll discuss forms and what they’ll mean for New York employers and employees.

If you’re just looking for the Paid Family Leave (PFL) forms themselves, you can find them here.

For more discussion about these forms and other PFL topics, check out this free webinar.

PFL Background

Under the New York Paid Family Leave Benefits Law, many employees across the state will be eligible for paid leave for these qualifying events:

Caring for a family member with a serious health condition.
Bonding with a child during the first 12 months after the child’s birth or placement for adoption or foster care, or to meet related adoption or foster care obligations.
“Qualifying exigencies” arising from a family member being on active duty or notified of an impending call to active duty in the U.S. Armed Forces.

Beginning in 2018, eligible employees may take up to 8 weeks of leave and receive up to 50% of their average weekly wage for any of these qualifying circumstances. By 2021, the benefits are scheduled to increase to 12 weeks of leave and up to 67% of the employee’s average weekly wage.

The pay component of the New York Paid Family Leave is an insurance benefit like the state’s short-term disability pay. Consequently, unlike the federal Family & Medical Leave Act (FMLA) where employers determine leave eligibility, the insurance carrier (or self-insured employer) decides whether employees qualify for New York Paid Family Leave. This means that once employees complete leave forms, they will submit them to the insurance administrator for review and processing.

Insurers can use their own forms and allow telephonic or Internet reporting, but they must also accept the forms issued by the Workers’ Compensation Board.

Request For Paid Family Leave (Form PFL-1)

This is the generic form to be completed by any employee seeking New York Paid Family Leave. It has two parts. Part A is for the employee to complete. The employer completes Part B.

Part A

Part A start with basic information about the employee: name, address, social security number, date of birth, telephone number, gender, and preferred language. Then there’s an option section where employees can identify their race, for research purposes.

The next section of Part A gets into the basis for the paid family leave request. Specifically it asks about:

Reason for PFL request?
Which family member (by relationship, not name) is involved?
Will PFL be for a continuous period of time and/or periodic? (Including listing applicable dates.)
If providing less than 30 days’ advance notice to the employer, please explain . . . .

Finally, Part A ends with several items about the employee’s employment. Among these questions is whether the employee has more than one employer and whether they are also taking leave from another employer. It also asks whether the employee is receiving Workers’ Compensation Lost Wage Benefits. The employee must sign at the end of Part A declaring, essentially, that they have made no false statements in the form.

Part B

Like the employee’s part, the employer’s part of Form PFL-1 starts with a basic information section. The employer must fill out: business name, address, FEIN, SIC code, and contact information.

The employer also must provide information about the employee’s employment: date of hire, occupation, and wage data for the past 8 weeks.

Then Part B shifts to information about the employee’s paid family leave request:

Whether the employer is requesting reimbursement for wages it paid.
Whether the employee has received benefits for paid family leave or NYS disability in the past 52 weeks (with details).
Is the employee taking FMLA leave concurrently with PFL?

The FMLA question could be tricky. When the employer completes this form, it may not yet know whether it will grant FMLA leave. Ideally, the form really should ask, “Is the employee requesting FMLA leave concurrently with PFL?”

The employer must also provide the name and contact information for its insurance carrier.

At the end of the form, the employer must confirm that the employee is eligible for PFL based on their schedule and number of days worked. This does not necessarily mean the employee’s situation qualifies them for leave. The insurer will make that decision.

Bonding Certification (Form PFL-2)

This is the form for employees making a paid family leave request to bond with a newborn, an adopted child, or a foster child.

After entering personal information, the employee must fill out information about the child, including:

Date of birth
Gender
Whether the child lives with the employee
Nature of relationship (biological child, stepchild, foster child, adopted child, legal ward, or spouse/domestic partner’s child)

Then the employee must identify what type of documentation they are submitting. The instructions indicate that employees generally should not send originals.

Here are the possible forms of documentation:

Health care provider certification of pregnancy (original letter required)
Health care provider certification of birth (original letter required)
Birth certificate
Voluntary Acknowledgement of Paternity
Court order of filiation
Marriage certificate
Civil union/domestic partner’s documentation
Foster care placement letter
Court documents of adoption
Other documentation, if none of the others apply

Again, the employee must sign declaring that all information provided is accurate.

The employer does not complete any portion of this form.

Release Of Personal Health Information Under The Paid Family Leave Law (Form PFL-3)

By default, neither the employee requesting leave, nor the employer complete most of this paid family leave request form. Rather, the family member the employee will be caring for (or an authorized representative) must complete it. Of course, the employee may be the one to complete the form if they are an authorized representative, for example as the parent of the patient.

The purpose is to enable the family member’s health care provider to complete another form, providing information about the patient’s medical condition to the employee and the PFL insurance carrier.

The form specifies that the release only covers information related to the family member’s current condition that is the subject of the employee’s paid family leave request. Interestingly, the form doesn’t require the family member to identify which medical condition that is.

The employee can revoke the release anytime. Otherwise, it automatically expires after one year.

Health Care Provider Certification For Care of Family Member With Serious Health Condition (Form PFL-4)

The employee puts their personal information on the form and gives it to the family member’s health care provider along with the release authorization. Interestingly, the employee is supposed to include their own social security number and date of birth. Some employees might be reluctant to provide this information if they don’t share the same doctor as their family member. It may be possible, as a practical matter, for the employee to add this information after receiving the certification back from the provider.

The health care provider completes most of this form.

The first question for the health care provider is “Does patient require care by the employee requesting Paid Family Leave (PFL)?” This seems like a question that the health care provider wouldn’t necessarily be qualified to answer. The form clarifies that “providing care may include necessary physical care, emotional support, visitation, assistance in treatment, transportation, arranging for a change in care, assistance with essential daily living matters, and personal attendant services.” But it’s unclear how the doctor would know in some cases whether the employee would have to be the one to provide such care. Regardless, it’s fair to assume many health care providers will readily mark “yes” for this item.

The health care provider then indicates the patient’s diagnosis (on one line) and timing information, including:

Date patient’s condition commenced
First date care for patient is needed
Expected date patient will no longer require care
Estimated number of days per week or days per month patient requires care

Overall, there is little space on the form for the health care provider to enter information about the patient’s medical condition.

The rest of the form is for additional information about the health care provider, who is then required to certify the accuracy of the completed form.

Military Qualifying Event (Form PFL-5)

This form is completed entirely by the employee making the paid family leave request.

As with the other forms, the employee must enter identifying information. Then they provide information about the proposed military qualifying event.

The employee must identify the covered military member by name, date of birth, gender, address, and relationship to the employee.

The form also asks about the dates of the active duty and requires the employee to submit one of these forms of supporting documentation:

Covered active duty orders
Letter of impending call or order to covered duty
Documentation of military leave signed by the approving authority for the military member’s Rest and Recuperation

The employee is also prompted to identify the reason the employee is requesting PFL. The employee may select one or more of the following:

Arranging for child care
Arranging for parental care
Counseling
Making financial arrangements
Making legal arrangements
Acting as military member’s representative before a federal, state, or local agency for purpose of obtaining, arranging, or appealing military service benefits
Attending any event sponsored by the military or military service organizations
Other

Notably, the form doesn’t require the employee to explain most of the above items. Nor is there is any guidance regarding what may qualify in the “other” category. That item does at least provide a box where it looks like an employee could add more information. The form’s instructions suggest the employee should provide more information in narrative form, but it’s not clear whether that’s necessary. It seems likely that many employees would take the path of least effort and simply check a box.

In addition to advising the employee to attach supporting documentation, there is a supplemental section to be completed if the leave if requested to meet with a third party. The form suggests: “The reason for a meeting can include: arranging for child or parental care, counseling, making financial or legal arrangements, acting as the military member’s representative before a federal, state or local agency for purposes of obtaining, arranging or appealing military service benefits, or attending any event sponsored by the military or military service organizations.”

Processing of Paid Family Leave Request Forms

Once completing all the paid family leave request forms, the employee submits them to the insurance carrier. There is no requirement that the employee provide copies to the employer. This could make it difficult for the employer to even predict the likelihood of the insurer granting the PFL benefits. Meanwhile, however, the employer has to either allow or plan for the employee’s leave in case it is approved.

The law seems to allow the insurer to discuss the information the employee provides with the employer. But it’s not clear whether it would be appropriate for the insurer to share information obtained from a family member’s health care provider. The release only specifically authorizes release (a) to the employee and (b) to the insurance carrier.

Upon receipt of the necessary paperwork, the insurance carrier has 18 days to pay or deny the claim. Employees can appeal denials through a process that can result in arbitration. Unless self-insured, the employer is not a party to that process. Nonetheless, the employer is responsible for permitting leave, reinstating the employee, and maintaining the employee’s group health insurance coverage, depending on the outcome of the PFL benefits claim.

Click here for more information about a New York Paid Family Leave webinar.