As a small business owner, you've probably realized success depends on anticipating and managing the various risks and opportunities that confront your venture. You've envisioned a number of these scenarios and your responses to them in your business plan. You've given extensive thought to your marketing and sales, manufacturing, and purchasing strategies - but what about your employee strategy? The Family and Medical Leave Act (FMLA) of 1993 is one of many regulations that makes it imperative for small business owners to consider human resources in a different light to avoid losing expensive lawsuits, alienating your workforce and distracting your attention.
What FMLA Requires
FMLA, a workplace law in the domain of the United States Department of Labor, requires companies that employ a workforce of 50 or more or that are public agencies to make unpaid leave of up to 12 weeks available to employees facing personal medical problems, the birth or adoption of a child or the need to care for a family member. FMLA applies specifically to employees who have worked for your company for at least 12 months and 1,250 hours and who intend to return to work at the conclusion of their leave. You must continue to pay the benefits of these employees and save their jobs for them.
The costs of compliance are high. The Small Business Administration estimates that "small businesses spend $6.3 billion a year on the Family and Medical Leave Act compliance," averaging $31,500 per eligible small business. Fortunately, it is possible to minimize or even eliminate this cost by understanding what FMLA requires you to do.
Your FMLA Action List
- Consult DOL's resources on FMLA and refer to the text of the regulation to clear up any lingering questions.
- Alert your employees to the existence of FMLA via workplace posters or other methods.
- *Provide detailed written explanations of your human resources policy, including Family and Medical Leave Act clauses, to new and prospective employees.
- *Know that employees can apply for FMLA leave on the basis of many possible medical and family-related scenarios, including reasons of personal mental health. It is ultimately up to the employee, not to you, to decide which reasons are legitimate for FMLA leave purposes.
- *Never fire, demote, or otherwise discriminate against a returning FMLA employee because of their leave. FMLA guarantees employees the right to return to their existing jobs under existing conditions.
- *Be aware that the statute of limitations regarding the FMLA is two or three years, depending on the situation. This means that an employee can file a grievance long after an FMLA leave has concluded.
- *Know your own rights. As an employer, you can require FMLA leave applicants to substitute paid leave, if available, in place of some or all of the FMLA time.
- *When your company grows, hire a human resources specialist to help craft and enforce policies for your expanding workforce, and make certain that he or she is familiar with FMLA laws and local rulings as well as with other workplace laws and regulations.
Business owners should be aware that courts have repeatedly demonstrated a willingness to err on the side of the employee in FMLA disputes. For example, in Stevenson v. Hyre Elec. Co., the court ruled on behalf of a stressed-out employee who had been fired as a result of acting oddly at work and calling in sick several days in a row. Although this employee did not officially file for FMLA, the court decided that her behavior alone constituted a notice of FMLA leave. In Honolulu, a court decided that an employee who had been demoted after returning from FMLA leave had been illegally discriminated against, even though the employer claimed that the demotion resulted from budgetary reasons. These kinds of cases demonstrate not only the employee's wiggle room under FMLA but also how employers who act in good faith can still be penalized under the regulation.
While FMLA is open to abuse, the purpose of the law is laudable: to ensure that employees can secure their own and their families' mental and physical health without being penalized. This right is guaranteed to employees by both legislation and litigation, and employers who fight against it have to be ready to pay the price - in the form of double lost wages, lawyers' fees, bad publicity and other damages. If you learn about and respond to the Family and Medical Leave Act in your human resources strategy, your business will be on the right side of the law.
