What is FMLA and How Does it Affect My Business?

what is fmla

What is FMLA?

If you find yourself asking this, don’t worry, you are not alone. FMLA is something that every small business owner needs to know about, but many do not understand nearly enough. They need to know whether their business is subject to it, if their employees qualify for it, what they need to do to remain compliant, and what impact FMLA could have on them. 

So, what is FMLA, then? Let’s dive in and answer FMLA questions you might have, further explain what FMLA is, what employers and employees are subject to it, and how it could affect your business.

What is FMLA?

FMLA stands for the Family and Medical Leave Act, a federal law that provides qualifying employees of up to twelve weeks of unpaid time off per year with their job protected. This could impact your business in several different ways.

In this article, we will further explain what FMLA is, what employers and employees are subject to it, and how it could affect your business.

FMLA Basics

FMLA is incredibly massive and complex, so we are going to give you a basic view of what FMLA says before we go into how it could affect you and your business.

Basically, here is what FMLA ensures:

  • It requires certain employers (see next section) to allow qualifying employees up to 12 weeks of unpaid time off for either:
    • Treatment of a medical condition.
    • To care for a family member with a medical condition.
  • It also applies to bonding after birth, adoption, or placement of a foster child.
  • The employer must not only offer the time off, but is required to allow the employee to return to the same or similar position with the same pay.
  • The law also carries requirements for continued group benefits, notifications to eligible employees, communications between the employer and employee during leave, and additional leave for military personnel.

Before we go any further, however, here are a few things to keep in mind about FMLA:

  • This basic description above only scratches the surface of FMLA law.
  • Details are further complicated by state and local laws.
  • Lack of knowledge can lead to costly lawsuits and FMLA cases are increasing rapidly.

What is FMLA Employer Criteria?

Not all employers are subject to FMLA, so it is vital to know whether you meet its requirements.

For a company to be subject to FMLA regulations, they must:

  • Be a private company with at least 50 employees.
  • Have 50 or more employees for each working day during 20 or more calendar workweeks in the current or preceding year.
  • Have at least 50 employees within a 75-mile radius.
  • Government agencies and schools are subject to FMLA regulations regardless of their total  number of employees.  

What is FMLA Employee Eligibility?

For an employee to qualify for FMLA leave, they must not only work for a qualifying employer, but also meet certain employment requirements.

Employment Requirements

To qualify, the employee must:

  • Have worked at your business for at least 1 cumulative year.
  • Have worked a minimum 1,250 hours for you during the previous 12 months.
  • Work at a location that has 50 or more employees within a 75 mile radius.

Qualifying Conditions

If an employee meets these employment requirements, they must also have a qualifying condition to be eligible for FMLA.

These are the qualifying conditions for FMLA leave eligibility:

  • Their own serious health condition.
  • An immediate family member with a serious health condition that they need to care for.
  • Placement or birth of a child.
  • Any qualifying emergency related to an immediate family member being in the military on “covered active duty.”

These are the qualifying conditions for FMLA leave eligibility:

  • Their own serious health condition.
  • An immediate family member with a serious health condition that they need to care for.
  • Placement or birth of a child.
  • Any qualifying emergency related to an immediate family member being in the military on “covered active duty.”

What is FMLA’s Impact on Business?

FMLA has had a huge impact on businesses in a number of different ways. Let’s take a look now at these different aspects and what they could mean for your business.

Financial and Compliance Impact

As stated in by Leo Corcoran for Entrepreneur, the numbers on the purely financial side of FMLA’s impact alone are staggering.

“According to the Employment Policy Foundation a Washington, D.C. based research group), compliance with FMLA costs employers more than $21 billion in lost productivity, continued health benefits, and labor replacement.”

Not only could FMLA have a large impact on your company’s finances, but also gives you certain obligations in order to remain compliant.

In order to remain FMLA compliant you must:

  • Post an FMLA notice explaining employee rights under the FMLA program.
  • Give all new employees information about the FMLA.
  • Promptly inform employees when they may have an FMLA-qualifying leave.
  • Explain the employee’s rights and responsibilities under the FMLA.
  • Record all FMLA leaves as FMLA designated and keep track of the total leave allotment and how much leave the employee has available.
  • Give employees an official eligibility notice for FMLA leaves.

FMLA is only a tiny piece of the federal, state, and city compliance laws pie. As the compliance burden continues to increase for employers, all you can do is continue to seek solutions that allow you to keep up with these ever-evolving demands from our government.

Partnering with a PEO to handle compliance issues is one such option. Why worry about these issues yourself when you can let an expert worry about it instead?

Litigation

FMLA’s impact on your company does not end there, though. In the same article, Corcoran goes on to explain that FMLA-based litigation poses an even bigger threat to businesses.  

“But the real FMLA-related risk is that of litigation. Lawsuits filed under the statute jumped from 291 in 2012 to 877 in 2013, according to the Administrative Office of the U.S. Courts. The FMLA was the only employment law to generate a sharp increase in claims in that period.

The statute requires a lower threshold of proof than most other employment laws. In a bias case, a worker typically has to show that his employer intended to discriminate. But in an FMLA case, he has to show only that the employer somehow deterred or interrupted a leave authorized under the act.”

If you have less than 50 employees, you may not be directly affected by FMLA law, but there’s still things like wrongful termination lawsuits, discrimination claims, and ADA obstacles that could cause headaches for your business.

Don’t Be Scared of FMLA Compliance

What is FMLA? Hopefully you now have a better understanding of the Family and Medical Leave Act and how it affects your business. However, even with this better understanding, FMLA regulations and compliance can be complex and difficult. The last thing you want is to end up in hot water because of a mistake. 

Do not worry, though! You can prevent this by practicing consistent policies and connecting with a trusted adviser like a PEO. Instead of trying to dig yourself out of a hole because of FMLA-related mistakes, you can prevent them from ever happening.

If you want to take this step for your business and avoid the hassle of FMLA, get in touch with us. We would love to help! 

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