On March 14, 2019, the U.S. Department of Labor/Wage and Hour Division continued its practice under the Trump Administration of issuing Opinion letters by releasing three new ones – its first Opinion letters of 2019. One of the newly-released Opinion letters relates to the Family and Medical Leave Act (“FMLA”), and two of them involve the Fair Labor Standards Act (“FLSA”).
Two of the new Opinion letters (one on the FMLA and one on the FLSA) are of particular importance to most employers. The FMLA Opinion letter involves the issue of whether an employer and/or employee can elect not to count absences as FMLA leave if they are otherwise FMLA-qualifying. The FLSA Opinion letter involves whether an employer must compensate an employee for time spent outside of work hours performing volunteer work as part of an employer community service program.
A. FMLA Opinion Letter FMLA2019-1-A
The primary issue addressed in this Opinion letter is whether an employer may allow an employee to decline the use of FMLA leave for FMLA-qualifying absences in order to preserve it for future use. The issue arose because some employers do not count otherwise FMLA-qualifying absences as FMLA leave at the employee’s request or until an employee has first exhausted available paid time off (such as sick days or vacation days).
In its 2019 Opinion letter, the DOL/WHD has taken the position that an employer must designate and count FMLA-eligible absences as FMLA leave and may not allow an employee to save up FMLA leave for a rainy day. DOL/WHD considers the practice of delaying the designation of FMLA leave or permitting employees to save FMLA leave for future use to be an unlawful waiver of an employee’s FMLA rights.
As a secondary issue, the DOL/WHD stated that the employer may not count more than 12 weeks of absences (26 weeks in the case of military caregiver leave) as FMLA leave during the leave year. DOL/WHD believes that such an expansion of the statutory entitlement would be an attempt to circumvent the waiver issue.
This is a reversal of DOL/WHD’s prior position on the primary issue. The DOL/WHD has issued four prior Opinion letters on this topic (which are now rescinded to the extent inconsistent with the new 2019 Opinion letter):
- In two of the prior Opinion letters, the DOL/WHD took the position that an employer could elect not to count otherwise qualifying absences as FMLA leave as long as the employer still provided FMLA’s benefits and protection to the employee for those absences (e.g., job protection, active employee rate for health insurance, etc.). The DOL/WHD previously rationalized that such treatment was consistent with the FMLA’s provision stating that an employer could extend greater coverage to an employee than FMLA requires. See Opinion Letters FMLA-49 (1994) and FMLA-67 (1995).
- In the other two prior Opinion letters, the DOL/WHD made it clear that the employer was entitled, but not required, to count as FMLA leave any absence which was otherwise FMLA-qualifying regardless of what the employee wanted. In other words, the employer had the right to count them as FMLA leave even if the employee had not requested that the absences be counted or preferred that they not be counted as FMLA leave. See Opinion Letters FMLA-68 (1995) and FMLA-83 (1996).
The issue at hand has also been the subject of a few court cases. The 9th Circuit Court of Appeals has stated that an employee may use non-FMLA leave for an FMLA-qualifying reason and decline to use FMLA leave in order to preserve FMLA leave for future use. Escriba v. Foster Poultry Farms, Inc., 743 F.3d 1236 (9th Cir. 2014). The 9th Circuit considers such a practice to be nothing more than a postponement of the exercise of a right the employee has, as opposed to a permanent waiver of that right. In its 2019 Opinion letter, the DOL/WHD specifically stated that it disagrees with the 9th Circuit.
At least two federal district courts (Northern District of Ohio and Western District of Washington) have agreed with the 9th Circuit position. At least one state court (Supreme Court of Texas) has disagreed with the 9th Circuit and adopted the position that has now been articulated by the DOL/WHD.
- Under DOL’s position, an employer has no choice (and the employee has no say) but to count as FMLA leave any absence that is FMLA-qualifying once the employer has sufficient information to determine it is FMLA-qualifying.
- Also under DOL’s position, an employer is permitted to provide more generous leave benefits (beyond the 12 weeks/26 weeks required under FMLA) by allowing the employee to take more leave after (but not before) FMLA is exhausted. In addition, the extra leave cannot be designated as FMLA leave and has to be treated as non-FMLA leave.
- At this time, there are few court decisions on this topic, and the court decisions which have been issued are not in agreement. It is difficult to predict where this issue will ultimately land. Employers should stay abreast of court decisions on point.
- Employers will need to decide (possibly in consultation with legal counsel) whether to follow existing court opinions that govern their jurisdiction or to follow the DOL/WHD position to the extent that court decisions and the DOL/WHD position conflict.
B. FLSA Opinion Letter FLSA2019-2
The primary issue in this Opinion letter was whether an employee’s time spent participating in an employer’s optional volunteer program, which awards a monetary bonus to the team with the most community impact, is “hours worked” and compensable under the FLSA. Based on the facts presented to DOL/WHD in this Opinion letter, it concluded that the employee’s hours spent outside normal work hours on volunteer activities related to the employer’s optional community service program are not “hours worked” and are not compensable under the FLSA.
The Opinion letter did not say whether the employer was a private sector or public sector employer, so presumably the Opinion letter applies to both.
A side issue addressed by DOL/WHD in this Opinion letter involved the use of a mobile electronic device and time-keeping application to track the volunteer hours of each employee participant. The DOL/WHD stated that it was permissible to track volunteer hours using an mobile device/application as long as the device/application was not used to direct or control the employee’s activities (e.g., give instructions about what volunteer work the employee should do or how to do it) or to direct an employee to volunteer.
The DOL/WHD has addressed various aspects of this issue in a number of prior Opinion letters, but this particular Opinion letter provides a good collective summary and a useful roadmap for employers when designing volunteer community service programs. The following factors were key to DOL/WHD’s opinion:
- The employer provided an optional community service program for its employees, under which employees could participate in community service activities either sponsored by the employer or selected by the employee.
- The community service was for a charitable, religious, civic, humanitarian, or similar public service purpose. In this case, it was for a charitable purpose.
- The employer notified employees of the program and either invited employees to participate or actively promoted participation by employees. However, employees were not required, pressured, or coerced to participate in the community service program. The employer did not direct or control participation. It was a truly voluntary program.
- The employer paid for any time employees spent on the volunteer activities that occurred during an employee’s normal work hours or while the employee was required by the employer to be on the employer’s premises.
- Employees who chose not to participate were not subjected to adverse consequences, employment actions, or working conditions. In other words, there were no negative ramifications for not participating.
- Employees who chose to participate were considered for a monetary bonus at the end of the year, but there was no guarantee of a bonus (i.e., employees had no contemplation of a bonus or other compensation). The bonus was awarded to the group of employees with the greatest community impact. The winning group’s supervisor determined how to distribute the bonus among employees in that group and could take into account how many hours each employee volunteered.
- The Opinion letter was silent on whether the size of the bonus or the method of allocating it could be issues under other circumstances. Employers should be cautious in establishing a bonus (or bonus pool) or method of allocation that could be viewed as providing an incentive for or pressuring employees to participate. Doing so might undercut the employer’s position that the program is voluntary.
This article was written by Sue Willman. She is a Partner in the Spencer Fane Kansas City, Missouri Office. For more information, please visit www.spencerfane.com.