Be sure ‘Shared’ employees don’t put you over FMLA limit

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Many small employers aren’t covered by the FMLA because they don’t have 50 or more employees. Of course, the smaller the organization, the more likely it will need extra staffing from time to time.

If you’re considering adding temp help from an outside agency to handle a workload spike, get out your calculator first. If you’re not careful, you could wind up triggering FMLA liability for everyone who works for you.

The U.S. Department of Labor’s FMLA regulations clarify that being a so-called “joint employer” means you have to provide FMLA leave to those employees who qualify (those who have worked for your organization for at least one year total and at least 1,250 hours in the past year).

The regs say you can become a joint employer even if your new employees come from a temporary placement agency that pays their wages if your organization directs their work schedule and provides the supervision. To arrive at the 50-employee threshold, the DOL counts employees at both companies.

Recent case: Denise Moldenhauer worked for Tazcom, a nonprofit corporation created by the city of Pekin and the county of Tazewell to provide 911 emergency services. At no time has the nonprofit employed 50 or more workers.

Moldenhauer developed chronic pancreatitis in 1991, causing her to miss work because of acute flare-ups. By 2002, she was missing considerable work, to the point that Tazcom was concerned.

Then Moldenhauer told her boss she wanted to take FMLA leave. Tazcom said she wasn’t eligible and she filed a complaint with the DOL. The DOL issued a preliminary finding concluding that the nonprofit was a joint employer with the city and county entities that created it.

Tazcom fired Moldenhauer and she sued. The 7th Circuit Court of Appeals dismissed the case. It looked carefully at who controlled the actual work that Moldenhauer performed—that is, assignments, scheduling, hiring and firing. Because that was strictly the purview of Tazcom’s executive director, and because the nonprofit never employed more than 23 people, the court concluded the city and county were not joint employers. That was true even though those entities managed the payroll, rented space to Tazcom and provided most of the operational funding. (Moldenhauer v. Tazewell-Pekin Consolidated Communications Center, No. 07-1118, 7th Cir., 2008)

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