Top Ten Employee Leave Developments and Trends
Feb 23, 2017 Top Ten Download PDF
By Katrin U. Schatz, Esq., Jackson Lewis P.C.
For many managers and human resource professionals, employee leave administration counts among the top challenges in workforce management. The legal and regulatory landscape is complex and varying, and the rules appear to be continuously changing. Keeping up with recent developments is important to lowering the risk of missteps and potential litigation. Discussed below are some of the most notable issues in this area for in-house counsel in 2017.
1. Proliferation of State and Local Paid Sick Leave Laws
The patchwork of state and local paid sick leave laws easily tops our list. Just a few years ago, paid sick leave was a matter of employer choice. That all began to change when Connecticut became the first state to mandate paid leave for service workers in 2011. Since then, California, Oregon, Massachusetts, Puerto Rico, the District of Columbia and Vermont have joined the list. New to the list, Arizona and Washington will have paid sick leave laws in July 2017 and January 2018, respectively.
Not only states, but, by the most recent count, 33 counties and cities (including Los Angeles, Chicago and New York) also require employers doing business within their boundaries to offer paid sick leave, or will do so by the end of 2017. Unfortunately, the patchwork of sick leave laws is far from uniform. The laws vary considerably in such details as defining who is a covered employer, who qualifies as an eligible employee, how much sick leave is available, how it is accrued and when it can be taken.
Absent guidance at the federal level, which is unlikely to happen soon, expect the list of state and local paid leave laws to grow. The nation’s paid sick leave patchwork will continue to challenge employers.
2. New Paid Sick Leave Requirements for Federal Contractors
Effective January 1, 2017, employers must offer paid sick leave to employees working on certain federal contracts. Executive Order 13706, signed by President Barack Obama in 2015, imposes a sick leave mandate on a broad range of contracts entered with the federal government based on solicitations issued on or after the first day of 2017. Under the Labor Department’s September 2016 Final Rule, paid sick leave must be granted for an employee’s own illness, to care for an ill family member, and to address domestic violence. Eligible employees accrue one hour of paid sick leave for every 30 hours they work on a covered contract. Determining which employees are covered, how to track sick leave accruals and how to reconcile the rule with state and local paid sick leave laws will be a challenge for many federal contractors.
Will the Order remain in effect under President Donald Trump? Trump’s “Contract with the American Voter” promised to “cancel every unconstitutional executive … order issued by President Obama” within the first 100 days. Whether that includes Executive Order 13706 remains unclear.
3. Continuing Efforts to Implement Paid Parental Leave
The past year has seen greater efforts to provide employees with paid parental leave. In April 2016, the State of New York enacted legislation, to take effect in 2018, granting up to 12 weeks of paid time off per year to be used to bond with a new child, care for a seriously ill family member or address military family needs. The City of San Francisco became the first municipality to institute an ordinance requiring covered employers to provide up to six weeks of paid leave for new mothers and fathers. In December 2016, Washington D.C. passed legislation to grant eight weeks of paid bonding leave.
So far, only three states other than New York (California, New Jersey and Rhode Island) provide workers with partial pay during parental leave. Whether the trend toward state paid family leave laws will continue remains to be seen. However, we may see a push at the federal level if President Trump makes good on his campaign promise to promote paid maternity leave legislation.
4. EEOC’s Enforcement Focus on Inflexible Leave Policies
The Equal Employment Opportunity Commission’s five-year Strategic Enforcement Plan (SEP) for 2017-2021 reaffirms the agency’s enforcement priority on compliance with the Americans with Disabilities Act (ADA). In its 2016 resource document titled, “Employer-Provided Leave and the Americans with Disabilities Act,” the EEOC highlighted three leave-related employer practices that violate the ADA: (a) inflexible leave and attendance policies that fail to allow for extended leave as an accommodation; (b) “100 percent healed” policies that preclude consideration of potential accommodations that might allow temporarily disabled employees to return to active work; and (c) failure to consider transfers to vacant alternative positions.
Almost one-third of all lawsuits filed by the EEOC in 2016 included claims for disability discrimination. Prominent were cases involving policies calling for automatic discharge of employees whose medical leaves exceeded a certain time period. EEOC enforcement actions in this area have resulted in multi-million dollar settlements in some cases. In-house counsel should review employer leave policies and procedures carefully in 2017.
5. Litigation Trap Created by Intersection of FMLA and ADA
Much ADA litigation revolves around employers’ alleged failure to consider leave as a reasonable accommodation under the ADA when employees are ineligible for or have exhausted leave under the Family and Medical Leave Act (FMLA). The 2008 ADA Amendments Act broadened the scope of coverage under the ADA, and the EEOC’s laser focus on leave policies highlights that even relatively minor or short-term health conditions may qualify as covered disabilities. An employee’s request for time off to deal with a medical condition more often than not will trigger a duty to engage in an interactive process to evaluate whether leave should be allowed as an ADA accommodation. Employee handbooks that lack policies describing the accommodation process or that limit available medical leave to that afforded by the FMLA can raise red flags in a government audit or EEOC charge.
6. EEOC’s Enforcement Focus on Accommodating Pregnant Employees
Another leave priority announced in the EEOC’s SEP focuses on accommodating pregnancy-related limitations under the ADA and the Pregnancy Discrimination Act. Both the EEOC and the Justice Department have aggressively pursued lawsuits against employers who allegedly required pregnant employees to take leave when other accommodations might have allowed the employees to continue working. The EEOC has taken particular issue with policies offering light duty assignments to temporarily disabled employees but not to pregnant employees. In-house counsel should consider including specific language in employer accommodation policies advising that reasonable accommodation may be provided to employees temporarily disabled due to pregnancy, childbirth or related medical conditions.
7. Rise of ADA Interference Litigation
The EEOC’s August 2016 Enforcement Guidance on Retaliation and Related Issues suggests that the agency expects to pursue claims for interference with ADA rights more aggressively than in the past. The ADA’s prohibition on “coercion, threats, intimidation, or interference” with respect to ADA rights is broader than the statutory prohibition on retaliation. Thus, the guidance notes that conduct that is not “materially adverse” for retaliation purposes may still be actionable as interference.
According to the EEOC, conduct constituting interference may include intimidating an applicant or employee to refrain from requesting an accommodation; coercing an employee to forgo accommodation; threatening adverse action against an employee for not submitting to an unlawful medical examination; or subjecting an employee to adverse treatment for assisting a coworker in requesting accommodation. As this list makes clear, even non-disabled individuals can invoke protection under the statute’s non-interference provision. Expect ADA interference claims, including claims for alleged interference with an employee’s access to medical leave, to increase.
8. Efforts to Control FMLA Abuse
FMLA leave abuse remains a top concern for employers, and employer actions to curb abuse are increasingly being challenged in court. Thankfully, a growing body of case law, such as the Fourth Circuit’s recent decision in Sharif v. United Airlines, Inc., supports an employer’s right to discipline employees based on the employer’s “honest belief,” formed after reasonable investigation, that an employee engaged in abuse or fraud. However, questions such as precisely what constitutes a reasonable investigation or what is a legitimate reason for FMLA leave are not always clearly answered in case law. These issues require careful scrutiny. Consultation with counsel before taking adverse action in response to suspected fraud is often recommended.
9. Heightened Importance of Regular Policy Review
The increasing complexity of federal, state and local leave laws, combined with an increase in agency enforcement and private litigation, makes it critically important for employers to review their leave policies and procedures each year. In addition to achieving legal compliance, annual reviews should seek to ensure consistency among the range of handbook policies governing leave, accommodation, paid time off, attendance, disability, fitness for duty, light duty, drug testing, physical agility testing, medical examinations, wellness programs and related matters.
10. Leave as Accommodation to Care for Disabled Family Members?
It is generally understood that only a disabled employee may request reasonable accommodation under the ADA. Yet, in 2016, a California court of appeals held in Castro Ramirez v. Dependable Highway Express, Inc., 2 Cal. App. 5th 1028, that an employer who denied a non-disabled employee’s request for leave to care for a disabled family member may have violated California law. The court found that California’s non-discrimination statute imposes a duty to provide reasonable accommodation to an employee who is associated with a disabled individual. The California Supreme Court refused to review the case, making the decision binding on California trial courts, unless another appellate court issues a conflicting decision.
Importantly, a similar ADA provision prohibits discrimination based on an employee’s association with a disabled person. Does the California opinion signal the beginning of a trend that may extend into other states or federal courts? Only time will tell. Meanwhile, employers with California operations should take note of this decision.
Employers will continue to face a rapidly changing legal landscape in 2017 when it comes to employee leave entitlements. The medley of new laws, court decisions and agency enforcement actions requires employers to remain vigilant to avoid the numerous traps in employee leave management.
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