Thursday, April 7, 2011

When does 50 not equal 50?

Most people think of “50” as the magic number for the FMLA. “Oh, we have 50 employees, so we now have to comply with the FMLA,” is a popular refrain among HR departments. It’s not that simple.

The FMLA has two different rules that must be met before you have to offer FMLA leave to an employee—coverage and eligibility. Coverage applies to the employer and eligibility applies to the employee. They both have the magic number 50 as a key component, but are very different in application.

Coverage. The FMLA covers any private employer that has 50 or more employees on the payroll during 20 or more calendar workweeks (not necessarily consecutive workweeks) in either the current or the preceding calendar year. Who counts as an employee for coverage purposes?
  • Any employee whose name appears on the payroll will be considered employed each working day of the calendar week, and must be counted whether or not any compensation is received for the week.
  • Employees on paid or unpaid leave, including FMLA leave, leaves of absence, disciplinary suspension, etc., are counted as long as the employer has a reasonable expectation that the employee will later return to active employment.
  • If there is no employer/employee relationship (as when an employee is laid off, whether temporarily or permanently) that individual is not counted.
  • Part-time employees are considered to be employed each working day of the calendar week, as long as they are maintained on the payroll.
  • An employee who does not begin to work for an employer until after the first working day of a calendar week, or who terminates employment before the last working day of a calendar week, is not considered employed on each working day of that calendar week.
Once a private employer meets the 50 employees/20 workweeks threshold, that employer remains covered until it reaches a future point where it no longer has employed 50 employees for 20 (nonconsecutive) workweeks in the current and preceding calendar year. Thus an employer who met this threshold in 2010, drops below it later that year, and never crosses it again during 2011, would remain covered until December 31, 2011.

Eligibility. Just because the FMLA covers a particular employer, does not mean that the FMLA requires that employer to provide FMLA leave to any or its employees. An employee must still meet the FMLA’s eligibility requirements. To be eligible for FMLA leave, an employee must work for a covered employer, and:
  1. Was employed by the employer for at least 12 non-consecutive months;
  2. Worked 1,250 hours during the 12-month period preceding the start of the requested leave; and
  3. Works at a location where the employer employs 50 or more employees within a 75-mile radius.
There you have it. At least as the FMLA is concerned, 50 does not necessarily equal 50. If you a business that has 50 or more employees who are fragmented across smaller locations, each more than 75 miles from the others, then you may fall into the weird vortex of being covered by the Act, but never having any employees who are eligible for leave.

Next week, we’ll look at what this distinction means on a practical level for your business, and also explore whether in light of the recent ADA Amendments it even matters.