Recordkeeping: The Often Overlooked Element of FMLA Compliance

Most employers grapple with the better-known aspects of the Family and Medical Leave Act (FMLA), such as determining whether an employee’s illness constitutes a serious medical condition, obtaining required certification or providing adequate coverage for workers on intermittent leave. All too often employers focus on the leave itself and breathe a sigh of relief when notice is provided confirming the dates of leave or when the employee has resumed his or her usual schedule. But an employer’s compliance with federal law includes the obligation to maintain adequate records related to the leave. Failure to do so can have significant consequences.

What Records Must You Keep?

FMLA recordkeeping requirements can be found in a single regulation, 29 C.F.R. § 825.500. That regulation requires employers to keep and preserve records in accordance with the recordkeeping requirements of the Fair Labor Standards Act (FLSA).  Records must be retained for no less than three years. Although no particular order or form is required, the records must be capable of being reviewed or copied. 

Covered employers with eligible employees must also maintain records that include basic payroll and data identifying the employee’s compensation. Failure to maintain accurate records can have significant consequences for employers, who have the burden of establishing eligibility for leave. Accuracy is important:  for example, the regulations demand that records document hours of leave taken in cases of leave in increments less than a full day.  Lack of suitable records documenting when leave was taken can also doom an employer’s defense to claims for leave. Special rules apply to joint employment and to employees who are not covered by or are exempt from the FLSA.

Importantly, copies of employee notices of leave furnished to the employer under FMLA, if in writing, and copies of all general and specific written notices given to employees are required under FMLA regulations. The required copies may be maintained in employee personnel files. In the event of a dispute between the employer and an eligible employee regarding designation of leave as FMLA leave, employers must present the required records, including any written statement from the employer or employee regarding the reasons for the designation and for the disagreement. All too often employers fail to audit their own personnel files to confirm that the required documentation is in place.

Documents (defined to include written and electronic records) describing employee benefits or employer policies and practices regarding the taking of paid and unpaid leaves must also be maintained, along with records of premium payments, if any, of employee benefits.

Compounding The Recordkeeping Requirement:  Don't Forget About Confidentiality

Of particular consequence for employers is the requirement that records and documents relating to medical certifications, recertifications or medical histories of employees or employees’ family members, created for purposes of FMLA, shall be maintained as confidential medical records separately from the usual personnel files. In those circumstances where the Americans with Disabilities Act (ADA) also applies, employers have a duty to maintain such records in conformity with the confidentiality requirements of the ADA. 

Be Proactive, Audit Your Records

Well-intentioned employers recognize that it’s never too late to conduct a compliance audit to determine whether their organization is complying with FMLA requirements.  Identifying and fixing any problems with your recordkeeping processes now could save a lot of headaches down the road.


When to Pay Summer Interns: FLSA Guidance You Need to Know

It's that time of year again, here's our post from last year from Matt Durham on this perennial summer concern for employers . . .

Certain things have become the recognizable signs of spring. Budding leaves. Flowers. Chirping birds. And summer intern resumes. Especially during a slow or recovering economy, HR professionals are likely to receive many resumes from eager students or recent graduates hoping to work as interns in order to gain valuable experience and networking opportunities. Often, intern candidates offer to work for nothing in exchange for the chance to learn about a job or industry.

Of course the idea, however enticing, of free labor should raise red flags. In fact, the United States Department of Labor (“DOL”) has made it clear that, unless specific criteria are met, student “interns” working at for-profit companies are actually student “employees,” subject to the minimum wage and overtime requirements of the Fair Labor Standards Act (“FLSA”). The DOL has identified the following six criteria for determining whether an individual meets the test for an unpaid intern:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Only if an internship program meets all of these requirements can participants be considered unpaid interns. And as you can imagine, meeting all of these requirements can be challenging. For example, the internship program must be structured around classroom or academic experience rather than around the employer’s business operations. For this reason, compliant programs are often developed and overseen by colleges or universities, which then give academic credit for participation. Moreover, the more the interns perform productive work for the employer (as opposed to job shadowing or similar activities), the more likely they will be deemed employees, entitled to minimum wage and overtime under the FLSA. You can find the DOL’s fact sheet on internship programs here.

At the end of the day, private employers seeking to benefit directly from eager students or graduates willing to work for the experience will find it difficult to meet DOL requirements. On the other hand, a company willing to provide work experience in order to be a good corporate citizen or to build relationships with schools or students, can structure an unpaid student intern program to meet those goals and comply with the law.


DOL Demonstrates Commitment to Wage and Hour Violations with Launch of New "DOL-Timesheet" App

In a highly visual public expression of its commitment to wage-and-hour violations, and to encouraging employees to file wage and hour complaints, the Department of Labor’s Wage and Hour Division entered the world of Smartphone apps when it recently launched its own “DOL-Timesheet” app for the iPad and iPhone. At first glance, the DOL-Timesheet App may not appear to be much more than the contemporary technological equivalent of a pad of paper, pencil, and some simple math. But not only does the DOL-Timesheet app track an employee’s hours and wages, it also: (1) contains a glossary of wage and hour terms; (2) informs workers about their rights under the Fair Labor Standards Act (FLSA); (3) contains easy to use links to contact the DOL’s Wage and Hour Division via phone or email; and (4) specifically instructs employees on how to file a wage violation complaint.


With all it does, there are still significant shortcomings and problems with the DOL-Timesheet app. The DOL candidly admits that the app does not address tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials and pay for regular days of rest. Additionally, the potential for human error or abuse creates inherent problems with reliability which may call into question the apps utility in a court of law. For example, it is unclear whether the DOL-Timesheet app includes metadata that would allow an employer to determine the time and date employees entered their time which in turn creates the potential that employees might overinflate their hours to seek benefits and compensation to which they may not be entitled.

Despite its shortcomings, the DOL left little question that it hopes and intends to use the information an employee tracks through its new app in its enforcement efforts when it stated the following in its press release announcing the app:


“This new technology is significant because, instead of relying on their employers’ records, worker now can keep their own records. This information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.”


For employers, the key phrase in the DOL’s statement is the last. An employee’s personal time records are unlikely to supplant or surpass an employer’s properly maintained time records. But in the absence of a well maintained and effective time-tracking system, an employee’s personal time records will quickly rise in value in the court’s eyes.


It remains to be seen whether the DOL-Timesheet will garner much attention and use from employees. However, regardless of its ultimate popularity, the DOL-Timesheet app serves as a clarion call to employers to get their proverbial wage-and-hour houses in order. If you are uncertain whether your wage and hour practices hold water under the FLSA, now is as good a time as any to take a good hard look at them.

More Federally Mandated Wallpaper: Federal contractors must post a notice of employee rights under the National Labor Relations Act


Once again, employers are being given an old line: we are from the federal government and we’re here to help you . . . with your office decorating. Shortly after his inauguration, President Obama issued Executive Order 13496 (the “Order”). The Order directed that all federal contractors post a notice to their employees advising the employees of their rights under the federal labor laws. The Order required the United States Department of Labor to prepare implementing regulations, including the text of the posting. After a year’s work, the Department has completed its work, and the required poster is now available. Federal contractors and all subcontractors must begin posting the required notice by June 19, 2010.

 Posting requirements are not new for federal contractors. In the 1980s, the first President Bush required contractors to post a notice advising employees of their rights to refrain from supporting unions’ political activities (the so-called “Beck” notices named after the U.S. Supreme Court case addressing the issue). President Clinton issued an executive order rescinding the Beck poster requirement; the second President Bush then reinstated the posting obligation. No surprise – in the Order President Obama again rescinds the obligation to post the Beck notice.

The new poster is available from the Department of Labor’s website here. The poster generally advises employees about their rights to engage in protected concerted activity under the National Labor Relations Act, as well as their right to refrain from engaging in that activity. The poster also describes the industries and employees that are not subject to the NLRA. Generally, the poster does a fair job of describing employee rights, and unlawful actions by both employers and unions. Of course, a single 11-inch by 17-inch poster cannot describe all of the complexities that have developed in the 75 years of NLRA enforcement. For example, health care employers should note that the poster does not even attempt to address the special rules applicable to various union activities in patient care areas.

The obligation to post the notice applies to all federal contracts that are above the “simplified acquisition threshold” applicable to federal contracts. Generally, the simplified acquisition rules are applicable to contracts with a total value less than $100,000. These provisions of the federal acquisition regulations are sometimes complex, and employers with questions as to their coverage should consult their attorney.

Federal contractors are required to include a contract provision requiring posting of the notice in all subcontracts, with a value of more than $10,000. Thankfully, in the final regulations the Department backed off its original proposal that subcontracts had to include the full text of the poster; now contractors can satisfy their obligations in this regard by incorporating the regulation by reference. Contractors should note that among the requirements of the contract clause is the obligation for subcontractors to include the provision in their contracts with their subcontractors; the Department’s regulations thus expressly require all businesses performing work on the federal contract to post the notice, regardless of their subcontract “tier” or whether the subcontract might itself be under the simplified acquisition threshold.

The poster must be physically displayed in the normal “conspicuous places” other employment related posters are located. The notice must be posted at all locations on which work on the federal contract is performed or is being allocated to the federal contract. When a substantial portion of the workforce does not speak English, the notice must be posted in the language spoken by those employees. When the employer routinely provides employees notices by electronic means, the employer must do so in this instance as well, typically by providing a link to the Department of Labor website.

What is a federal contractor or subcontractor to do?

For federal contractors or subcontractors that are already ubiquitously unionized, the poster may not cause any substantial headaches. Indeed, reminding unionized employees that there are certain things their union cannot do, as the poster plainly does, may not be a bad thing. For federal contractors or subcontractors that are not currently unionized, however, substantial issues are raised – especially if the employer wants to remain union-free. The new poster may raise employees’ awareness of their rights under the NLRA. It should also raise union-free employers’ attention to a systematic union avoidance program:

  • Nothing in the Executive Order or the Department’s regulations prevents an employer from posting its own notice, right alongside the newly required poster.
  • Employers should remind employees that it is official company policy that the employer does not believe a union is necessary or appropriate.
  • The employer should remind employees of the advantages they enjoy by being union-free.
  • If the company has not reviewed its nonsolicitation and nondistribution policy, it should be reviewed promptly to make sure that all of its provisions are in compliance with the law. If the company does not have a nonsolicitation and nondistribution policy – implement one!
  • Make sure that your nonsolicitation and nondistribution policy, and any other policies or practices that might impact employees or others engaging in union organizing, are applied in a fair and nondiscriminatory fashion.

Of course, before undertaking any these actions, federal contractors or subcontractors should consult with their labor law attorney.  



Another Circuit Court Agrees: ADA Amendments Act is Not Retroactive

Congress did not intend for the ADA Amendments Act (ADAAA) to be retroactive, the Court of Appeals for the District of Columbia ruled yesterday, and applied pre-ADAAA law to dismiss an employment discrimination claim.  Click here to read the court's decision in Lytes v. DC Water and Sewer Authority

Congress passed the ADAAA in 2008 and the new law became effective January 1, 2009.  The ADAAA significantly expanded the definition of "disabled" under the Americans with Disabilities Act (ADA).  The Lytes court reviewed the legislative history of the ADAAA, and could not find in that history any indication that Congress intended the law to apply retroactively.  The court also noted that Congress signaled its intend that the law not apply retroactively when it gave the ADAAA a specific effective date. 

The DC Circuit joins the Fifth Circuit Court of Appeals, which also ruled in EEOC v. Agro Distribution, LLC that the ADAAA is not retroactive.  Notably, the Department of Labor has also taken the position that the law should not apply retroactively.  And, at least for now, it appears that the Equal Employment Opportunity Commission agrees

Lytes and Agro Distribution are important cases for employers defending ADA claims; they make clear that for claims arising before January 1, 2009, pre-ADAAA standards of what constitutes a "disability" are likely to apply.  For more information on the ADAAA, click here for the Stoel Rives World of Employment's ADAAA coverage

DOL Secures $3.4 Million Settlement for NY Car Wash Employees

A portend of things to come in federal wage enforcment?  Yesterday, a group of New York car washes have agreed to pay over one thousand current and former employees a total of $3.4 million to settle a lawsuit filed by the Department of Labor (DOL) alleging violations of the Fair Labor Standards Act (FLSA).  Click here to read the consent decree in Solis v. LMC et al

As we reported back in May, the Department of Labor received a budget increase of 10 percent and is devoting most of that increase to enforcement.  Employers can expect to see more activity from the DOL to enforce wage and hour laws, especially large cases against groups of employers. 

In the meantime, sit back, relax and enjoy Rose Royce:


Federal Minimum Wage Increases to $7.25 Effective July 24

Employers take note:  the federal minimum wage increases to $7.25 per hour effective July 24, 2009.   For more information, check out the Department of Labor's Fair Labor Standards Act site

Of course, many states also have minimum wage laws, an where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage.  Click here for the Department of Labor's handy list of minimum wages by state, effective January 1, 2009.  (Note:  the chart does not accurately reflect that Nevada's minimum wage will increase effective July 1, 2009 increase from $5.85 per hour to $6.55 per hour, while the minimum wage for employees not receiving health benefits will increase from $6.85 per hour to $7.55 per hour). 

Need the Department of Labor's minimum wage posters?  Here they are:

IRS, DOL Publish New Info on COBRA Subsidy

Today the Department of Labor expanded its FAQs on the COBRA subsidies included in the American Recovery and Reinvestment Act of 2009 (ARRA).  Click here to read the DOL's new COBRA FAQs

Wondering what the tax implications of the subsidy are, or whether the person asking for the subisidy is truly eligible?  Click here to read the IRS's Premium Assistance for COBRA Benefits.  If that doesn't answer your tax questions, click here to visit the IRS's ARRA page

As a reminder, employers can click here to download the new model COBRA notices

Sick to death of COBRA and need to relieve the stress it's caused?  Click here to visit Orisinal - a site full of calming, zen-like computer games. 

And finally, click here to visit the Stoel Rives World of Employment's complete COBRA coverage