The 3-Legged Dance a.k.a. The Bermuda Triangle of HR
(or Why You Really Want Access to Experienced HR Professionals)

In this update we mention ADA, COBRA, PDA, ERISA, FLSA and Recordkeeping, some of these regulations have minimum employee counts to be effective for an organization and some effect a business because you have one employee. You may not be required to comply with all of the regulations mentioned above today, but as your organization grows you will most likely be required to comply with all of them at some point in time.

Much of the information that follows below comes from recent HR Updates delivered to us by BLR.

Much has been written about the Bermuda Triangle of Family and Medical Leave Act (FMLA), Americans with Disabilities Act (ADA), and Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), but that’s not the only triangle that makes FMLA compliance tricky. Compliance gets even murkier when the ramifications of the Pregnancy Discrimination Act (PDA), ADA, and COBRA are factored in.

FMLA regulations specify that the FMLA does not override other applicable laws, and that where multiple laws apply to a leave situation, FMLA should be coordinated with the other applicable laws. Understanding which laws apply in a given situation, and how they interact, can be complex and confusing, to say the least.

The Pregnancy Discrimination Act and FMLA
The PDA, which amends Title VII of the Civil Rights Act of 1964, makes it unlawful to fire, fail to hire, refuse to promote, or otherwise discriminate against a woman because she is pregnant.
The basic principle behind the PDA is that women affected by pregnancy and related conditions must be treated the same as other applicants and employees on the basis of their ability or inability to work.

As regards FMLA leave, this means:
• A pregnant woman may not be forced to go on leave as long as she can still work.
• If other employees who take disability leave are entitled to get their jobs back, so are women who have been unable to work because of pregnancy.
• If pregnant employees are treated differently with respect to their FMLA leave than nonpregnant employees who request leave because of a serious health condition, you may be guilty of discrimination.
• If a woman is terminated allegedly because of pregnancy or the birth of a child, she may be able to sue under both FMLA and PDA.

Please keep in mind that some states have laws that mandate maternity leave (not Utah, Idaho, Wyoming, or most western states except California)

COBRA and FMLA
COBRA contains rules regarding employees’ rights to healthcare coverage.
The major question for employers who must comply with both COBRA and FMLA is when COBRA benefits begin. According to guidance issued by the Internal Revenue Service (IRS Notice 94-103), taking leave under the FMLA does not constitute a COBRA-qualifying event setting off COBRA’s notification requirements. A qualifying event does occur if the following conditions are met:

• The employee (or spouse or dependent) is covered by the employer’s group health plan on the day before the first day of FMLA leave,
• The employee does not return to work at the end of the FMLA leave, and
• The employee would, in the absence of COBRA, lose coverage under the health plan before the end of the maximum coverage period provided by COBRA.

If these three conditions are met, a qualifying event occurs on the last day of FMLA leave. The maximum COBRA coverage period is generally measured from the date of this qualifying event. If coverage would be lost on a later date, the maximum COBRA coverage period would be measured from that date.

The IRS guidance also says that:
• Any state and local laws that require group health plan coverage during a leave of absence for more time than required by FMLA do not affect the determination of when a COBRA qualifying event has occurred.
• A qualifying event also occurs if an employee fails to pay his or her share of group health plan premiums during the FMLA leave or declines group health plan coverage during the leave.
• The right to take COBRA continuation may not be conditioned on repayment by an ex-employee of any premiums paid by the employer for group health coverage during FMLA leave.

In part 1 above we entered the Bermuda Triangle of HR—the dangerous waters where the Family and Medical Leave Act (FMLA), Americans with Disabilities Act (ADA), and Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) intersect. Today, we’ll see what the Employee Retirement Income Security Act (ERISA) and Fair Labor Standards Act (FLSA) have to do with the FMLA, and we’ll introduce a comprehensive program that will keep your FMLA hassles to a minimum.

FMLA and ERISA
The FMLA allows for the discontinuation of employee health benefits during a leave if the employee fails to pay his or her portion of the premium. However, the FMLA requires that any discontinued benefits provided pursuant to an employee benefit plan, as defined by ERISA, be resumed when an employee returns from FMLA leave, without any qualifying period.

This requirement makes it necessary for employers to review their benefit plans to ensure that an employee returning from leave will be able to be fully reinstated to all benefits. For example, it may be necessary for the employer to continue life insurance for an employee on FMLA leave to avoid the employee’s having to pass a new physical for the life insurance carrier.

In addition, any period of FMLA leave must be treated as continued service for purposes of vesting and eligibility to participate in pension and other retirement plans.

FLSA and FMLA
The FMLA and the FLSA interact in two important ways. First, the FMLA provides a special FLSA exemption for salaried, exempt employees. Second, the FMLA requires that FMLA-covered entities maintain records in accordance with the FLSA.

Exemption for Salaried Employees
Normally, employers may not deduct hourly amounts from exempt employees’ salaries. The FMLA provides an exception, stating that an employer may deduct hourly amounts from an employee’s salary when providing FMLA leave without affecting the employee’s exempt status under the FLSA.
Recordkeeping

The burden of proof is on the employer to prove an employee is ineligible for leave because he or she has not worked the requisite 1,250 hours. In determining an employee’s eligibility for leave under the FMLA, the appropriate measure of “hours of service” is the standard used by the FLSA that considers only actual hours worked by the employee.

If you do not keep time records, you may have a difficult time establishing your case. To this end, the FMLA requires employers to make, keep, and preserve records related to their obligations under the FMLA, according to the recordkeeping requirements of the FLSA.

FMLA hassles—they just won’t go away, will they? And, now, of course, there are all the new FMLA responsibilities—like military leave and reinstatement. Still a little shell-shocked?

The issues touched on above are the kind of issues handled daily by the HR Professionals at A Plus Benefits, Inc. If you have questions or concerns about these issues or other employment related matters please contact one of our HR Professionals.

Randall Barker is the VP of Human Resources for A Plus Benefits, Inc.