FMLA obligations don’t kick in unless an employer qualifies as a “covered employer” under the statute.
Sometimes, determining whether an employer is covered can get a little tricky.
The questions abound: How many employees must be retained? For how long? What if we straddle the minimum number over the course of time? What about part-time employees? Those on leave? And the list goes on.
Let’s take a closer look at which employers are covered by the FMLA, and which are not. After all, if it turns out you are not covered in the first place, it can save you a lot of unnecessary legwork.
The covered employer basics: The 50/20 rule
Let’s begin with the basic rule for private-sector employers.
A private sector employer is covered by the FMLA – meaning it must comply with applicable FMLA requirements – if it employs at least 50 employees in at least 20 workweeks in the current or previous calendar year.
Not a fiscal year. Not a rolling year (which can come into play when determining the period during which eligible employees can take FMLA leave). To determine whether an employer is covered, it’s a calendar year that applies.
Those 20 weeks do not have to be consecutive. Instead, the question is whether the employer had at least 50 employees in any 20 workweeks in the current or prior calendar year.
Another important note: If an employee works for any part of a workweek, they are considered to be employed for each working day of the calendar workweek for purposes of determining coverage under the FMLA.
Who gets counted as an ‘employee’?
To get an accurate count, employers need to know which people are “employees” and which are not.
Here is a quick list of employees who must be counted, courtesy of the Department of Labor:
- Any employee who works in the U.S. (or in any one of its territories or possessions)
- Any employee whose name is on payroll records (it doesn’t matter whether compensation was paid)
- An employee on leave (as long as you expect them to return)
- Employees of foreign firms operating in the U.S., and
- Employees who are part-time, temporary and seasonal (as well as full-time employees).
Some individuals do not need to be counted for purposes of determining whether the 50-employee threshold has been met.
- Former employees
- Unpaid volunteers
- Employees of U.S. firms who are stationed at worksites outside the U.S., and
- Employees of foreign firms who are working outside the U.S.
Once it’s met, it’s met
Let’s say an employer has a busy season that runs from the beginning of May through the end of September, during which it employs more than 50 people.
When things slow down, the number of employees drops below 50 and remains there until June of the next year.
At that time, an employee asks for FMLA leave.
Must the employer entertain the request, even though it has not had 50 or more employees since the previous September?
In this example, the employer met the 50/20 threshold in the prior year. Therefore, it’s a covered employer in the following year.
Remember: If there were 50 or more employees for 20 weeks of the current or prior calendar year, the employer is a covered employer under the statute.
What happens when separate businesses retain fewer than 50 employees each but operate under a single corporate entity or share common management? Are those businesses always excluded from FMLA coverage?
That’s a hard no, the DOL advises.
First, a corporation is a single employer under the FMLA, and all of its employees – at all locations – are counted for purposes of determining whether the FMLA applies.
In addition, separate businesses may all be parts of a single employer if they qualify for what is known as an “integrated employer.”
In determining whether an employer is an integrated employer, relevant factors include:
- Whether there is common management
- The interrelation between operations
- Whether there is centralized control of labor operations, and
- The degree of financial control or common ownership.
What happens when two businesses share control over an employee’s work? Who’s the employer for FMLA purposes?
In this situation, both employers must count the employee for FMLA purposes – even if only one of them has the employee on its payroll.
A final word (or two): Successor employers
Finally, an employer may need to comply with the FMLA if it takes over a covered employer.
Factors apply to determine whether any particular employer is in fact a successor. Ask yourself: To what extent did the new employer step into the shoes of the prior one?
Relevant factors to consider in making the determination include whether the new employer:
- Continues with the same business operations and provides similar products or services
- Provides similar working conditions and jobs
- Employs the same workforce and uses the same supervisory structure, and
- Uses the same location and similar equipment/production methods.