On March 14, the Department of Labor issued an opinion letter to answer the following two questions about FMLA leave: 1) may an employer delay designating leave as FMLA covered, even if the leave is for a FMLA qualifying reason, to allow the employee to exhaust paid leave first; 2) may an employer expand an employee’s FMLA leave beyond the statutory 12 week entitlement. In the DOL’s opinion, the answer to both questions is “no.”
The situation the opinion letter addresses is quite common: an employee wants to use available paid leave before starting the clock ticking on the 12 weeks of FMLA leave. By delaying the designation of the leave as FMLA covered until after the paid leave is exhausted, the employer has effectively granted the employee additional weeks of protected leave.
I have always thought the FMLA regulations on this point are fairly clear: the employer is required to designate FMLA qualifying leave as covered by FMLA; to the extent an employee has accrued paid time off, the employer can require it to run concurrently with FMLA. This rule is a great benefit to employers in managing employee leave by ensuring that the FMLA job protected leave lasts no longer than 12 weeks, regardless of how much paid time off the employee has accrued.
Despite the seeming clarity of the regulation, the DOL issued two prior opinion letters (in 1995 and 1996), that took the position that an employer had the right, but was not required, to designate FMLA qualifying leave as FMLA covered (so long as it did not deny employees their rights under FMLA). The Department reasoned that this permissive approach was consistent with FMLA’s provision that allows employers to extend more leave than FMLA requires. However, in the March 14 letter, the DOL emphasized that the designation of FMLA qualifying leave as covered leave is mandatory, and the maximum number of weeks of FMLA leave to which an employee is entitled in a year is 12 (or 26 is the case of military caregiver leave). An employer remains free to grant leave beyond the 12 week requirement, but it cannot be considered FMLA leave. The March 14 letter expressly withdrew these prior opinion letters.
DOL may have taken a more permissive approach in the past because the practice of allowing an employee to use paid leave before starting the FMLA clock typically causes no harm to the employee. In fact, it is usually a great benefit to the employee who gets the extra leave. From that perspective, it’s difficult to discern what harm the Department is trying to remedy with this new opinion.
The answer may be a 2014 ruling on this subject from the Ninth Circuit, Escriba v. Foster Poultry Farms, Inc., 743 F.3d 1246, 1244 (9th Cir. 2014). The plaintiff in that case, Maria Escriba, sought two weeks of leave to care for her ill father in Guatamala. She informed her supervisors of the FMLA qualifying reason for the leave, but expressly requested the time be deemed as vacation leave, so she could save FMLA leave for future use. When Escriba failed to return to work after two weeks, she was terminated. Escriba filed suit, alleging her termination interfered with her FMLA rights. She claimed, based upon the regulations, the employer was required to designate her leave as FMLA leave. Escriba argued she was not allowed to waive her FMLA rights by electing to use vacation leave before FMLA leave commenced, despite the fact that is what she specifically requested.
On appeal, the Ninth Circuit rejected Escriba’s arguments, ruling that the two weeks of vacation leave she requested were not FMLA protected, even though she was on leave for an FMLA qualifying reason. The court held that, “an employee can affirmatively decline to use FMLA leave, even if the underlying reason for seeking the leave would have invoked FMLA protection.” Because Escriba’s two weeks of leave was not FMLA protected, the court concluded the employer did not interfere with her FMLA rights by terminating her employment.
Escriba was a win for that particular employer, but ironically was a loss for employers generally. What was previously a employer granted discretionary benefit (allowing exhaustion of paid leave before starting the FMLA) was transformed into an employee right (entitlement to exhaust paid leave before starting FMLA). Once the employee has the right to determine when the FMLA clock starts, the employee potentially gains the opportunity of extra leave beyond the 12 week statutory entitlement. The employer’s ability to effectively manage FMLA leave, granted to it by regulation, was out the window.
The DOL specifically mentioned in footnote 3 of the March 14 letter its disagreement with the holding Escriba. While the Department’s opinion letter is not binding authority, courts often defer to the agency’s interpretation of the law. Perhaps the Department issued this letter as part of an effort to confine to the Ninth Circuit the transformation of an employer managed benefit into an employee entitlement.
What is the takeaway for employers? First, if you want to protect your prerogative to manage FMLA leave, then you need to exercise it by following the DOL’s guidance in the March 14 opinion letter; namely, you should always designate as FMLA covered leave any leave that is FMLA qualifying. If the employee has available paid leave, the two can run concurrently. If you want to be more generous, make it clear that additional leave is available only after FMLA leave has been exhausted, and does not necessarily come with FMLA protected rights. Second, it may help employers reinforce the rule to supervisors and HR personnel who may not recognize the employee does not have a choice in determining when the designation of FMLA covered leave occurs. Finally, while there is no ironclad guarantee that other circuits will follow the DOL’s opinion letter, relying on a DOL Guidance supports an employer’s good faith defense it was trying to comply with the law, even if a court later finds the conduct to violate FMLA.