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The Family and Medical Leave Act, or FMLA, allows employees up to 12 weeks of unpaid leave from their jobs when certain circumstances arise, such as the birth of a child or to take care of a close family member with a medical issue. FMLA has a huge impact on employers since the law obligates them to continue your health benefits during a leave and guarantee that your job will be available upon your return.
Only “covered” employers are subject to the provisions of the FMLA. Under the statute, all federal, state and local government agencies, regardless of the number of employees, are affected by the FMLA. In the private sector, however, only employers that have at least 50 employees on their payroll for a minimum of 20 weeks during the current or preceding year must provide covered employees all FMLA benefits that they qualify for. To be a “covered” employee, you must work for the employer for at least 12 months and must have accumulated a minimum of 1,250 work hours during the 12-month period immediately before you take the leave of absence.
Keeping Jobs Open
One of the biggest effects that the FMLA has on employers is the requirement that you must be restored to the same position you held prior to your leave. For employers, this may mean the expense of hiring a temporary employee to cover your duties during the leave. Employers are allowed to fill your position while on leave, but in these situations, your employer must have a job waiting for you that is nearly identical to the one you held prior to the leave. Any new position must have similar compensation, job duties, responsibilities and benefits. Moreover, the new position must have the same schedule and location as the prior one.
Continuation of Benefits
Another significant monetary effect that FMLA has on employers is the cost of continuing an employee’s health insurance while she is on unpaid FMLA leave. Employers cannot alter the terms of an employee’s insurance during an FMLA leave. For example, if your company subsidizes your monthly health insurance premiums by covering $400 per month, they must continue to make the same payments during your leave. If an employer lets an employee’s health benefits lapse, the employer can be penalized under the statute.
Covered employers have administrative burdens related to employees’ FMLA leaves, though the financial cost of these tasks may be difficult to quantify. When an employee requests a leave of absence, employers must get information from the employee to determine, within five days whether the leave request falls under the FMLA. This means the employer must dedicate resources to training its human resource employees on the law. There also are situations that require little or no notice by the employee of an intention to take a leave. As a result, employers may have to act quickly to ensure that business operations aren’t disrupted because of an employee’s leave.
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Michael Marz has worked in the financial sector since 2002, specializing in wealth and estate planning. After spending six years working for a large investment bank and an accounting firm, Marz is now self-employed as a consultant, focusing on complex estate and gift tax compliance and planning.
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