[Federal Register Volume 60, Number 4 (Friday, January 6, 1995)]
[Rules and Regulations]
[Pages 2180-2279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-32342]




[[Page 2179]]

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Part II





Department of Labor





_______________________________________________________________________



Wage and Hour Division



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29 CFR Part 825



The Family and Medical Leave Act of 1993; Final Rule

  Federal Register / Vol. 60, No. 4 / Friday, January 6, 1995 / Rules 
and Regulations   
[[Page 2180]]

DEPARTMENT OF LABOR

Wage and Hour Division

29 CFR Part 825

RIN 1215-AA85


The Family and Medical Leave Act of 1993

AGENCY: Wage and Hour Division, Labor.

ACTION: Final rule.

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SUMMARY: This document provides the text of final regulations 
implementing the Family and Medical Leave Act of 1993, Public Law 103-
3, 107 Stat. 6 (29 U.S.C. 2601 et seq.) (FMLA or Act). FMLA generally 
requires private sector employers of 50 or more employees, and public 
agencies, to provide up to 12 workweeks of unpaid, job-protected leave 
to eligible employees for certain specified family and medical reasons; 
to maintain eligible employees' pre-existing group health insurance 
coverage during periods of FMLA leave; and to restore eligible 
employees to their same or an equivalent position at the conclusion of 
their FMLA leave.

EFFECTIVE DATE: These rules are effective on February 6, 1995.

FOR FURTHER INFORMATION CONTACT: J. Dean Speer, Director, Division of 
Policy and Analysis, Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor, Room S-3506, 200 Constitution 
Avenue, NW., Washington, DC 20210; telephone (202) 219-8412. This is 
not a toll-free number.

SUPPLEMENTARY INFORMATION:

I. Paperwork Reduction Act

    Recordkeeping requirements contained in these regulations 
(Sec. 825.500) have been reviewed and approved for use through July 
1996 by the Office of Management and Budget (OMB) and assigned OMB 
control number 1215-0181 under the Paperwork Reduction Act of 1980 
(Pub. L. 96-511). No substantive changes have been made in this final 
rule which affect the recordkeeping requirements and estimated burdens 
previously reviewed and approved under OMB control number 1215-0181. 
Comments received regarding the estimate of public reporting burden for 
the information collection requirements contained in these regulations 
are discussed below in connection with Sec. 825.500.

II. Background

    The FMLA was enacted on February 5, 1993. In general, FMLA entitles 
an ``eligible employee'' to take up to a total of 12 workweeks of 
unpaid leave during any 12-month period for the birth of a child and to 
care for such child, for the placement of a child for adoption or 
foster care, to care for a spouse or an immediate family member with a 
serious health condition, or when he or she is unable to work because 
of a serious health condition. Employers covered by the law are 
required to maintain any pre-existing group health coverage during the 
leave period and, once the leave period is concluded, to reinstate the 
employee to the same or an equivalent job with equivalent employment 
benefits, pay, and other terms and conditions of employment.
    Title I of the Act applies to private sector employers of 50 or 
more employees, public agencies, and certain Federal employers and 
entities, such as the U.S. Postal Service and Postal Rate Commission. 
These regulations, 29 CFR Part 825, implement Title I of the FMLA. 
Similar leave entitlement provisions in Title II of the FMLA apply to 
most other Federal civil service employees who are covered by the 
annual and sick leave system established under 5 U.S.C. Chapter 63, 
plus certain employees covered by other Federal leave systems. The U.S. 
Office of Personnel Management (OPM) administers the regulations 
implementing Title II of the FMLA (see 5 CFR Part 630). Title III 
established a temporary ``Commission on Leave,'' which is to conduct a 
comprehensive study and produce a report on existing and proposed 
policies on leave and the costs, benefits, and impact on productivity 
of such policies. Title IV contains miscellaneous provisions, including 
rules governing the effect of the Act on more generous leave policies, 
other laws, and existing employment benefits. Title V extended similar 
leave provisions to certain employees of the U.S. Senate and the U.S. 
House of Representatives.
    Section 404 of the Act required the Department of Labor to issue 
regulations to implement Title I and Title IV of FMLA within 120 days 
of enactment, or by June 5, 1993, with an effective date of August 5, 
1993. Title I of FMLA became effective on August 5, 1993, except where 
a collective bargaining agreement (CBA) was in effect on that date, in 
which case the provisions took effect on the date the CBA terminated or 
on February 5, 1994, whichever date occurred earlier.
    To obtain public input and assist in the development of FMLA's 
implementing regulations, the Department published a notice of proposed 
rulemaking in the Federal Register on March 10, 1993 (58 FR 13394), 
inviting comments until March 31, 1993, on a variety of questions and 
issues. A total of 393 comments were received in response to the 
notice--from employers, trade and professional associations, advocacy 
organizations, labor unions, State and local governments, law firms and 
employee benefit firms, academic institutions, financial institutions, 
medical institutions, governments, Members of Congress, and others.
    After consideration of the comments received, the Department issued 
an interim final rule on June 4, 1993 (58 FR 31794), which went into 
effect on August 5, 1993, and which invited further public comment on 
FMLA's implementing rules until September 3, 1993. On August 30, 1993, 
the Department further extended the public comment period until 
December 3, 1993 (58 FR 45433). The Department received more than 900 
comments on the interim final rules during the extended comment period 
from advocacy groups and associations, Members of Congress, employers, 
union organizations, governmental entities and associations, law firms, 
management consultants, marriage and family counselors and therapists, 
clinical social workers, property management companies, temporary help 
and employee leasing companies, professional and trade associations, 
universities, and individuals. In addition to the substantive comments 
discussed below, many commenters submitted minor editorial suggestions, 
some of which were adopted and some were not. Finally, a number of 
other minor editorial changes have been made to better organize and 
simplify the regulatory text.
    On December 29, 1994, a meeting was held at OMB with 
representatives of Consolidated Edison Company of New York pursuant to 
E.O. 12866.
    The Department would like to point out that it has prepared a 
lengthy preamble to accompany these regulations in an attempt to be 
fully responsive to the numerous comments received. The Department 
would welcome additional comments regarding employers' experience with 
the implementation of the FMLA over the course of the next year or so. 
Such comments will be reviewed together with the results of the 
comprehensive study on existing and proposed leave policies to be 
conducted by the Commission on Leave to determine whether further 
revisions to these regulations will be appropriate in the future.
[[Page 2181]]

Summary of Major Comments

I. Subpart A, Secs. 825.100-825.118

Covered Employers (Sec. 825.104)
    Under FMLA, any employer engaged in commerce or in an industry or 
activity affecting commerce is covered if 50 or more employees are 
employed in at least 20 or more calendar workweeks in the current or 
preceding calendar year. The Women's Legal Defense Fund and the Food & 
Allied Service Trades expressed concern that employers may manipulate 
workforce levels to avoid the Act's leave requirements. In this 
connection, they suggested that any intentional reduction to 49 or 
fewer employees after an employee request for FMLA leave should 
constitute unlawful interference with FMLA rights, and, as provided in 
regulations by the State of Oregon under its Family Leave Act, deemed a 
violation of the Act.
    Section 825.220 discusses the prohibited acts and anti-
discrimination provisions of the Act, including violative employer 
practices that attempt to interfere with an employee's exercise of 
rights under the Act. It is the Department's view that manipulation of 
workforce levels by employers covered by FMLA in an effort to deny 
employees' eligibility for leave is a violation of the Act's 
requirements, and this has been clarified in Sec. 825.220.
    Two commenters (Alabama Power Company and DLH Industries, Inc.) 
objected to the statement in Sec. 825.104 that individuals such as 
corporate officers ``acting in the interest of an employer'' are 
individually liable for any violations of the Act. They contend that 
this provision could frustrate advancement to managerial positions and 
unnecessarily increase costs for insurance and bonding. The California 
Department of Fair Employment and Housing questioned whether managers 
or supervisors can be held personally liable under FMLA.
    FMLA's definition of ``employer'' is the same as the Fair Labor 
Standards Act (FLSA), 29 U.S.C. 203(d), insofar as it includes any 
person who acts directly or indirectly in the interest of an employer 
to any of the employer's employees. Under established FLSA case law, 
corporate officers, managers and supervisors acting in the interest of 
an employer can be held individually liable for violations of the law. 
See, e.g., Reich v. Circle C Investments, Inc., 998 F.2d 324 (5th Cir. 
1993); Dole v. Elliot Travel & Tours, Inc., 942 F.2d 962 (6th Cir. 
1991).
    The Chamber of Commerce of the USA expressed concern about the 
impact of the ``employer'' definition on various business arrangements, 
e.g., leased employees, franchises, and other loosely-related business 
operations. The National Automobile Dealers Association stated that 
additional guidance on the application of the ``integrated employer'' 
test would benefit the small business community in particular.
    The ``integrated employer'' test is not a new concept created 
solely for purposes of FMLA. It is based on established case law, as 
was explained in the preamble of the Interim Final Rule, arising under 
Title VII of the Civil Rights Act of 1964 and the Labor Management 
Relations Act. As FMLA's legislative history states, the definition of 
``employer'' parallels Title VII's language defining a covered employer 
and is intended to receive the same interpretation. Under Title VII and 
other employment-related legislation, including the LMRA, when 
determining whether to treat separate entities as a single employer, 
individual determinations are highly fact-specific and are based on 
whether there is common management, an interrelation between 
operations, centralized control of labor relations, and the degree of 
common ownership/financial control. They are not determined by any 
single criterion, nor do all factors need to be present; rather, the 
entire relationship is viewed as a whole. Because it is a fact-specific 
question in each case, further detailed guidance cannot be provided in 
the regulations.
    The Society for Human Resource Management questioned whether the 
Act applied to employers in Puerto Rico, or to such entities as the 
Resolution Trust Corporation or to Indian Tribes. FMLA's coverage 
extends to any State of the United States, the District of Columbia, 
and to any territory or possession of the United States (Sec. 101(3) of 
FMLA defines the term ``State'' to have the same meaning as defined in 
Sec. 3(c) of the Fair Labor Standards Act). Employees of U.S. firms 
stationed at worksites outside the United States, its territories, or 
possessions are not protected by FMLA, nor are such employees counted 
for purposes of determining employer coverage or employee 
``eligibility'' with respect to worksites inside the United States. 
This point has been clarified in Sec. 825.105 of the regulations. The 
Resolution Trust Corporation can be a covered employer under Title I of 
FMLA as a ``successor in interest'' of a covered employer when it 
assumes control over a failing thrift as part of the resolution 
process. Because FMLA is a statute of broad general applicability, 
which applies to both the public and private sectors, and there is 
nothing in either the statute or its legislative history which provides 
an exemption for Indian tribes, it is the Department's view that Indian 
tribes may be covered by the legislation where the statutory 
prerequisites are met, as ``a general statute in terms applying to all 
persons includes Indians and their property interests.'' FPC v. 
Tuscarora Indian Nation, 362 U.S. 99, 116 (1960). The rule in Tuscarora 
contains exceptions for laws that (1) affect exclusive rights of self-
governance in purely intramural matters; (2) abrogate rights guaranteed 
in Indian treaties; or (3) provide proof by legislative history or 
otherwise that Congress intended the law not to apply to Indians. It is 
the Department's position that these exceptions do not apply to the 
FMLA, consistent with the reasoning of the Ninth Circuit in Donovan v. 
Coeur d'Alene Tribal Farm, 751 F.2d 1113, 1116 (1985). But see EEOC v. 
Cherokee Nation, 871 F.2d 937 (1989), in which the Tenth Circuit held 
that the Age Discrimination in Employment Act does not apply to Indians 
because its enforcement would interfere with the tribe's right of self-
government.
50 Employee/20 Workweek Threshold (Sec. 825.105)
    Private sector employers must employ 50 or more employees each 
working day during 20 or more calendar weeks in the current or 
preceding calendar year to be covered by FMLA. Nine commenters 
addressed the ``50 or more employees'' threshold test for coverage. The 
Women's Legal Defense Fund and the International Ladies' Garment 
Worker's Union objected to the exclusion of workers on temporary layoff 
from the count. They argued that temporary workers with a reasonable 
expectation of return to active employment are counted as employees 
under the Worker Adjustment and Retraining Notification (WARN) Act; 
that the test for evaluating who is an employee should be that of a 
``continuing employment relationship'' and not the actual performance 
of work during a given time period; and that only employees on an 
indefinite or long-term layoff should be excluded from the count.
    FMLA has significantly different statutory coverage provisions and 
serves considerably different objectives than those of WARN. The FMLA 
regulations attempt to define the size of an employer's workforce count 
for leave purposes, and uses a ``continuing employment relationship'' 
principle. There is no continuing employee-employer relationship during 
a layoff, as evidenced by the fact that employees on 
[[Page 2182]] layoff are entitled to unemployment benefits, and laid-
off employees are not maintained on the payroll during such periods. 
Furthermore, being on unpaid leave is not the same as being laid off. 
Moreover, under FMLA, if, while on FMLA leave, an employee would have 
been laid off, and the employment relationship terminated, the 
employee's rights to continued leave and job reinstatement would not 
extend beyond the date the employee would have been laid off. While the 
regulations do not require actual performance of work during a given 
time period for an employee to be counted as having a continuing 
employment relationship (e.g., employees on employer-approved leaves of 
absence are still included where there is a reasonable expectation of 
return to work), based on FMLA's legislative history, the regulations 
necessarily exclude all employees who are on layoff, and the employment 
relationship terminated, whether the layoff is temporary, indefinite or 
long-term.
    Southern Electric International, Inc. felt that the treatment of 
part-time workers on the same basis as full-time workers unnecessarily 
broadened coverage because employer obligations under the Act, 
particularly employers with large numbers of part-time workers, were 
based on counting non-eligible employees. Southern Electric argued that 
part-time workers should be counted, if at all, only on a pro-rata 
basis, i.e., two part-time workers working 20 hours a week would equal 
one equivalent full-time employee. The United Paperworkers 
International Union, on the other hand, supported counting part-time 
workers as consistent with the language of the Act and with Title VII 
of the Civil Rights Act of 1964. The union also felt that employers 
should be required to notify employees and their union representatives 
when the conditions for coverage are no longer met.
    FMLA's legislative history clearly states Congressional intent to 
include part-time employees when counting the size of the employer's 
workforce. The committee reports state that part-time employees and 
employees on leaves of absence would be counted as ``employed for each 
working day'' so long as they are on the payroll for each day of the 
workweek. And, similarly, in aggregating the number of employees at the 
worksite and within 75 miles for determining employee eligibility, the 
legislative history states that all of the employees of the employer, 
not just eligible employees, are to be counted. Accordingly, part-time 
employees must be counted the same as full-time employees under FMLA.
    With respect to adding a requirement that employers notify 
employees and their representatives when they cease to be covered by 
the Act, the Department believes that such a requirement would be 
overly burdensome. Questions of employer coverage and employee 
eligibility are fact-specific and may be subject to frequent change in 
some employment situations. They should be resolved as necessary when 
an employee requests leave.
    Southern Electric International, Inc. also noted that the phrase 
``reasonable expectation that the employee will later return to work'' 
is confusing as it relates to employees on long-term disability because 
such employees rarely ever return to work for the same employer. The 
commenter recommended that long-term disabled employees be excluded 
from the 50-employee count. The National Restaurant Association also 
maintained that the ``reasonable expectation'' requirement should be 
deleted because it had no basis in the Act or its legislative history, 
arguing further that the term was surplusage in that an employee is 
either on the payroll or is not on the payroll.
    An employee who is permanently disabled from work would not 
reasonably be expected to return to work and, therefore, may be 
excluded from the employee count. The Department continues to believe, 
however, that the employer's workforce count should be based on whether 
there is a continuing employment relationship between the employer and 
each of its employees. A ``reasonable expectation'' that an employee on 
leave will later return to work is an appropriate standard that 
contributes to a better understanding of that relationship for purposes 
of FMLA, and it is retained in the regulations.
    Additionally, two public commenters (Association of Washington 
Cities and the California Department of Fair Employment and Housing) 
suggested that the phrase ``on the payroll'' needed clarification as 
applied to public employers. They noted practices of local governments 
to hire seasonal and temporary employees, particularly in public works 
and recreation, who may or may not be rehired the following summer or 
after completion of short term projects; or to use volunteer 
firefighters and volunteer police reserve officers who receive only 
nominal stipends for service. Because public agencies are covered 
``employers'' under the Act regardless of the number of employees 
employed (see Sec. 825.108(a)), these comments more appropriately raise 
questions related to ``employee eligibility'' and are addressed in the 
discussion of Secs. 825.110 and 825.111.
Joint Employment (Sec. 825.106)
    Administaff, Abel Temps, National Staff Leasing Association, 
National Association of Temporary Services, and National Staff Network 
argued that temporary help and leasing agencies should not be held 
responsible, as the primary employer, for giving the required FMLA 
notices, providing leave, maintaining health benefits, and job 
restoration. In particular, they stressed the unique nature of their 
business and the relationship with client employers, who, rather than 
the temporary help or leasing agency, have control over worksites and 
jobs. They argue generally that client employers, as secondary 
employers, should be responsible for job restoration and other 
requirements of the Act for all their own employees, including leased 
or temporary employees. In the alternative, several of these commenters 
urged adoption of a ``head of the line'' standard, which would limit 
job restoration for temporary or leased employees where the client 
employer discontinues the services of the temporary or leasing agency 
or the services of the returning temporary/leased employee, to priority 
consideration by the temporary or leasing agency for possible placement 
in assignments with other client employers for which the employee is 
qualified. Several of these commenters also proposed differing criteria 
for situations where temporary or leasing agencies contract with 
covered and non-covered client employers.
    The Department agrees that joint employment relationships do 
present special compliance concerns for temporary help and leasing 
agencies in that the ease with which they may be able to meet their 
statutory obligations under FMLA may depend largely on the nature of 
the relationship they have established with their client-employers. Our 
analysis of the statute and its legislative history in the context of 
the industry comments submitted, however, revealed no viable 
alternatives that could be implemented by regulation that would not 
also have the unacceptable result of depriving eligible employees of 
their statutory rights to job reinstatement at the conclusion of FMLA 
leave. As the legislative history clearly states, the right to be 
restored upon return from leave to the previous position or to an 
equivalent position with equivalent employment benefits, pay and other 
terms and conditions of employment is central to the entitlement 
provided by FMLA. [[Page 2183]] Furthermore, it is the employment 
agency which is responsible for the employee's pay and benefits, and is 
in the best position to provide the rights and benefits of the Act.
    FMLA does not entitle a restored employee to any right, benefit, or 
position of employment other than any right, benefit, or position which 
the employee would have held or been entitled to had the employee not 
taken leave. This means, for example, that if, but for being on leave, 
an employee would have been laid off, the employee's right to 
reinstatement is whatever it would have been had the employee not been 
on leave when the layoff occurred. Thus, if a client employer of a 
temporary help agency discontinued the services of the temporary help 
agency altogether, or discontinued contracting for the particular 
services that were being furnished by the temporary employee who took 
FMLA leave, during the employee's FMLA leave period, following a ``head 
of the line'' approach for giving the returning employee priority 
consideration for possible placement in assignments with other client 
employers for which the employee is qualified would appear to be 
entirely consistent with the intent of the FMLA in those circumstances. 
As provided in Sec. 825.216, an employer must show that an employee 
would not otherwise have been employed in order to deny restoration to 
employment in the same or an equivalent position. Failure to promptly 
restore a returning employee to employment at the conclusion of the 
leave where the client employer continues to utilize the same services 
as were previously furnished by the employee who took leave would be a 
violation of FMLA's job restoration requirements.
    Two commenters (William M. Mercer, Inc. and Chamber of Commerce of 
the USA) noted that subsection (f) could be construed as requiring the 
secondary or client employer to restore the jobs of temporary or leased 
employees, which is disruptive to business and the contractual 
relationship between temporary or leasing agencies and the client 
employers. They felt that job restoration obligations should be the 
responsibility of the temporary or leasing agency (the primary 
employer).
    The primary employer (temporary placement firm or leasing agency) 
is responsible for furnishing eligible employees with all FMLA-required 
notices, providing FMLA leave, maintaining health benefits during FMLA 
leave, and restoring employees to employment upon return from leave. In 
addition, although job restoration is the responsibility of the primary 
employer, the purposes of the Act would be thwarted if the secondary 
employer is able to prevent an employee from returning to employment. 
Accordingly, the regulations are revised to provide that the secondary 
employer is responsible for accepting an employee returning from leave 
in place of any replacement employee. Furthermore, the secondary 
employer (client employer) must observe FMLA's prohibitions in 
Sec. 105(a)(1), including the prohibition against interfering with, 
restraining, or denying the exercise of or attempt to exercise any 
rights provided under the FMLA. It would be an unlawful practice, in 
the Department's view, if a secondary employer interfered with or 
attempted to restrain efforts by the primary (temporary help) employer 
to restore an employee who was returning from FMLA leave to his or her 
previous position of employment with the secondary (client) employer 
(where the primary (temporary help) employer is still furnishing the 
same services to the secondary (client) employer). Because the 
secondary employer is acting in the interest of the primary employer 
within the meaning of Sec. 101(4)(A)(ii)(I) of the Act, the secondary 
employer has these responsibilities, regardless of the number of 
employees employed.
    The National Association of Plumbing-Heating-Cooling Contractors 
noted a potential for misunderstandings of the ``joint employment'' 
criteria and the Chamber of Commerce of the USA, for similar reasons, 
urged that DOL reconsider the requirement in subsection (d) that 
jointly-employed employees are counted by both employers in determining 
employer coverage and employee eligibility. This requirement, according 
to the Chamber, was of particular concern to small businesses. To 
minimize the risk of unintentional violations of the Act, the Chamber 
recommended against a requirement to count employees jointly for 
purposes of determining eligibility status, and urged adoption of 
``good faith'' defense provisions for employers confronted with joint 
employment quandaries.
    In joint employment relationships, an individual employee's 
eligibility to take FMLA leave is determined from counting the 
employees employed by that employee's primary employer (i.e., the one 
responsible for granting FMLA leave), and would exclude any 
``permanent'' employees ``primarily employed'' by any secondary (joint) 
employer of that same employee. Thus, in practical effect, the employee 
is only counted once for purposes of determining his or her own 
individual eligibility to take FMLA leave. In the example of 15 
employees from a temporary help agency working with 40 ``permanent'' 
employees employed by an employer, the eligibility of any one of the 15 
temporary help agency employees to take FMLA leave from their primary 
employer (the temporary help agency) is determined by counting only the 
temporary help agency employees assigned (outplaced) from or working at 
the temporary help agency's ``single site of employment'' (i.e., most 
likely the main placement or corporate office). Excluded from this 
count is any ``permanent'' employee of any of the temporary help 
agency's client employers. On the other hand, the client employer with 
40 ``permanent'' employees is responsible for granting FMLA leave to 
its ``permanent'' employees because it employs a total of more than 50 
employees when including the jointly-employed employees, but its 
obligation to grant FMLA leave extends to only its 40 ``permanent'' 
employees. Notwithstanding the complexities that arise in administering 
the law in joint employment contexts, there is no authority to adopt by 
regulation any ``good faith'' defense provisions that would take away 
employees' statutory rights.
    William M. Mercer, Inc. noted that the requirement in subsection 
(d) relating to counting jointly-employed employees for coverage and 
eligibility purposes ``whether or not maintained on a payroll'' 
differed from Sec. 825.111(c), which limits the employee count at a 
worksite to employees maintained on the payroll. The commenter urged 
clarification of ``joint employment'' principles in the case of 
worksite determinations and, also, in determinations of whether or not 
1,250 hours have been worked for eligibility (Sec. 825.110(d)).
    As noted above, Sec. 825.106 provides particularized guidance that 
addresses the special circumstances of joint employment. Because in 
most joint employment situations there may be only one payroll, 
maintained by only the primary employer, the guidance in Secs. 825.105 
and 825.111, standing alone, would not be sufficient to address joint 
employment. Section 825.106 is revised to further clarify application, 
as the employee is maintained on only one payroll. In addition, in 
order to clarify and prevent misunderstandings, Sec. 825.111 is revised 
to add similar guidance from Sec. 825.106 on joint employment 
``worksite'' determinations for purposes of determining employee 
eligibility. With respect to counting the [[Page 2184]] hours worked by 
jointly-employed employees to determine if the 1,250 hour threshold is 
met, the calculation is relevant only with respect to the primary 
employer of the employee at the time the employee requests FMLA leave.
    The discussion of employment relationship in general has been 
removed from this section of the regulations and a more general 
discussion has been included instead in Sec. 825.105.
Successor in Interest (Sec. 825.107)
    The Equal Employment Opportunity Commission (EEOC) pointed out that 
while the factors for determining ``successor in interest'' are based 
in part on Title VII precedent, no reference is made in this section to 
whether or not the successor had ``notice'' of pending complaints 
against a predecessor employer. The EEOC recommended clarifying how 
``notice'' affects the liability of a successor employer or a statement 
explaining that the FMLA rule departs from established Title VII 
precedent in this respect.
    As explained in the preamble to the Interim Final Rule, the list of 
factors is derived from Title VII and Vietnam Era Veterans' 
Readjustment Act of 1974 case law. The Department agrees with the court 
in Horton v. Georgia-Pacific Corp., 114 Lab. Cas. (CCH) par. 12,060 
(E.D. Mich. 1990), that notice should not be considered to continue the 
predecessor's obligation to employees who are on leave, or for 
determining coverage and eligibility of employees continuing in 
employment. The Department believes, however, that notice may be 
relevant in determining a successor employer's liability for violations 
of the predecessor, and the rule is clarified accordingly.
    The Chamber of Commerce of the USA indicated a need to clarify how 
a predecessor and successor employer can allocate FMLA liability and 
responsibility. In this connection, the commenter recommended adoption 
of criteria provided by 20 CFR Sec. 639.4 of the Worker Adjustment and 
Retraining Notification Act regulations.
    The WARN Act regulations, at Sec. 639.4(c), discuss the effect of a 
sale of a business between a seller and a buyer and the continuing 
employer obligations, under WARN, for giving notice to employees of 
plans to carry out a plant closing or mass layoff. While the Department 
believes it is appropriate for a seller of a business to inform a 
potential buyer of any eligible employees who are either to be out on 
FMLA leave at the time the business is sold (or have announced to the 
seller plans to take FMLA leave soon after the sale takes place), so 
that the buyer is aware of its ``successor in interest'' obligations 
under FMLA to maintain health benefits during the FMLA leave periods 
and to restore the employees at the conclusion of their FMLA leave, 
there is no ``allocation'' of responsibility under FMLA based on 
whether the seller and buyer have exchanged such information. The 
regulations are revised to make clear that an eligible employee of a 
covered predecessor employer who commences FMLA leave before the 
business is sold to a ``successor in interest'' employer is entitled 
under FMLA to be restored to employment by the successor employer 
without limitation.
    The Employers Association of New Jersey questioned whether a 
successor employer had to meet coverage requirements (Sec. 825.104) in 
order to be considered a ``successor in interest.'' FMLA's statutory 
definition of ``employer'' (Sec. 101(4)) includes ``any successor in 
interest of an employer,'' which we interpret to include successor 
employers that employ fewer than 50 employees after the succession of 
interest. FMLA's obligations in such cases, however, are limited to 
completing the cycle of any FMLA leave requests initiated by employees 
of the predecessor employer, where the employees met the eligibility 
criteria at the time the leave was requested.
    The Contract Services Association of America posed a series of 
questions related to FMLA's ``successor in interest'' obligations as 
applied to service contractors performing on Federal service contracts 
covered by the McNamara-O'Hara Service Contract Act (SCA). In the 
example posed, Employer A has lost a service contract (through 
recompetition) to Employer B. Employer B has been determined to be a 
``successor in interest.'' In its bid proposal, Employer B did not 
include several positions which Employer A employed on the predecessor 
contract. One of the eliminated positions was occupied by an employee 
of Employer A who was on FMLA leave at the time of the succession of 
the contract to Employer B. The Association questioned whether Employer 
A would have to continue to maintain the employee on FMLA leave and 
maintain his or her group health benefits, or whether the employee 
could be terminated at the time of contract turnover, treating it as a 
layoff and a lack of work. Employer A would not have to maintain this 
employee on FMLA leave or maintain health benefits if it can 
demonstrate that the employee would not otherwise have been employed as 
a result of the loss of the contract. This could be demonstrated, for 
example, if other, similarly situated employees of Employer A did not 
otherwise continue their employment with Employer A on other contract 
work or in some other capacity. Because Employer B had no comparable 
position in its bid proposal, Employer B would not be obligated to hire 
this employee either.
    The Association also asked if an employee on an SCA-covered 
contract were on FMLA leave at the time of contract transition to 
another contractor, would a ``successor in interest'' contractor be 
required to hire the employee under the job protection provisions of 
FMLA? The answer is ``yes'', if the employee's position continues to 
exist under the successor contract (as distinguished from the facts in 
the previous example, above). The successor contractor would not have a 
right to ``non-select'' the employee in this example at the end of the 
employee's FMLA leave. The outgoing contractor would not be required to 
maintain this employee's group health plan benefits for the remaining 
period of FMLA leave extending beyond the contract changeover, but the 
``successor in interest'' contractor would be required to do so, and to 
restore the employee to the same or an equivalent position.
    With respect to the remaining questions posed by the Association, 
it would be helpful for a predecessor contractor to furnish a list to 
the successor in interest of the predecessor's employees who are on 
FMLA leave when contractors change, and a list of benefits being 
provided (so they may be maintained and/or restored at the same 
levels). If lists are not furnished, the successor in interest should 
attempt to determine its obligations without waiting for the employees 
on FMLA leave to apply for employment with the successor.
Public Agency (Sec. 825.108)
    The State of Nevada personnel department objected to the 
designation of a State as a single employer, suggesting that certain 
individual ``public agencies'' of a State should be treated as separate 
employers based on criteria set forth in an administrative letter 
ruling issued by the Wage-Hour Administrator on October 10, 1985.
    Treating a State as a single employer under FMLA is a result 
required by the statute. FMLA defines the term ``employer'' to include 
any ``public agency'' as defined in Sec. 3(x) of the Fair Labor 
Standards Act, which defines ``public agency'' to include the 
[[Page 2185]] government of a State or political subdivision of a 
State, and any agency of a State or a political subdivision of a State. 
The 1985 letter ruling cited by the commenter was issued before the 
enactment of the 1985 FLSA Amendments, under which the Congress 
included specially-tailored provisions for employees of public agencies 
to address special situations where they volunteer their services under 
certain conditions, and perform work in fire protection, law 
enforcement, or related activities on special details when hired for 
such work by a ``separate and independent employer.'' Special rules to 
address FLSA's particular statutory provisions are found in 29 CFR Part 
553; Sec. 553.102(b) provides that the determination of whether two 
agencies of the same State government constitute the same public agency 
can only be made on a case-by-case basis, but one factor supporting the 
conclusion that they are separate is whether they are treated 
separately for statistical purposes in the Census of Governments issued 
by the Bureau of the Census, U.S. Department of Commerce. Section 
825.108(c) of the FMLA rules similarly provides for following the 
Census of Governments publication in resolving particular questions. 
FLSA's special rules for defining a public agency employer for other 
unique purposes mandated under FLSA are not analogous to FMLA leave 
situations, and we do not believe that any similar special rules are 
required under FMLA.
    The Office of Legislative Auditor, State of Louisiana questioned 
the status of an agency of a State's legislative branch under FMLA, 
where the agency is not subject to the State's civil service 
regulations and is otherwise considered not covered under the FLSA.
    Section 101(3) of the FMLA defines the term ``employee'' to have 
the same meaning as defined in Sec. 3(e) of the Fair Labor Standards 
Act. Section 3(e)(2)(C) of the FLSA excludes from this definition of 
``employee'' individuals who are not subject to the civil service laws 
of the State and who are employed in the legislative branch of that 
State (other than the legislative library). Thus, employees excluded 
from the FLSA statutory definition of ``employee'' would similarly be 
excluded from coverage under the FMLA.
    The Government Finance Officers Association felt that a public 
employer, as a single employer, should not be required to notify all of 
its employees about FMLA entitlements because many employees may 
misunderstand that they are not eligible for FMLA leave.
    FMLA imposes a statutory obligation on all covered employers to 
post the notice to employees informing them of FMLA's provisions, 
regardless of whether the employer has any ``eligible'' employees. 
Public agencies are covered ``employers'' without regard to the number 
of employees employed. There is no authorized exception that relieves 
covered employers from this notice requirement when they have no 
``eligible'' employees. The DOL poster, however, includes the employee 
eligibility criteria and makes it apparent that FMLA's entitlement to 
leave applies only to ``eligible'' employees. The individualized, 
specific notice to employees required to be furnished in response to 
FMLA leave requests applies only to FMLA-''eligible'' employees.
    Section 825.108(b) states that the U.S. Bureau of the Census' 
Census of Governments will be used to resolve questions about whether a 
public entity is distinguishable from another public agency. In this 
regard, the Office of the Treasurer, State of Ohio asked that more 
information be provided on how the census information can be accessed.
    The Census Bureau takes a census of governments at five-year 
intervals. Volume 1, Government Organization, contains the official 
count of the number of State and local governments. It includes 
tabulations of governments by State, type of government, size, and 
county location. Also produced is a universe list of governmental 
units, classified according to type of government. Copies of Volume 1 
and subsequent volumes are available from the Superintendent of 
Documents, U.S. Government Printing Office, Washington, D.C. 20402; 
District Offices of the U.S. Department of Commerce; and Regional and 
selective depository libraries. For a list of all depository libraries, 
write to the U.S. Government Printing Office, 710 N. Capitol Street, 
NW, Washington, D.C. 20402.
Federal Agency Coverage (Sec. 825.109)
    The Farm Credit Administration, the Chesapeake Farm Credit, and a 
number of other farm credit system institutions argued that system 
institutions should not be listed in this section dealing with Federal 
agencies, citing express legislation that defederalized system 
institution employees.
    These commenters are correct. This section of the regulations has 
been revised to delete the former reference to the Farm Credit 
Administration. These employees will be treated in the same manner as 
employees in the private sector when determining employer coverage and 
employee eligibility under FMLA.
    Section 825.109(b) further states that employees of the Library of 
Congress are covered by Title I provisions of FMLA, rather than Title 
II which is administered by the Office of Personnel Management (OPM). A 
review of applicable legislative authority indicates that employees of 
the Library of Congress should be covered by Title II of FMLA within 
the jurisdiction of OPM. The regulations have been revised to delete 
the Library of Congress from coverage under Title I.
12 Months and 1,250 Hours of Service (Sec. 825.110)
    To be eligible for FMLA leave, an employee must have been employed 
for at least 12 months with the employer, and the 12 months need not be 
consecutive. Several commenters stated that determining past employment 
was burdensome, too indefinite, and urged various limitations on a 12-
month coverage test. The Burroughs Wellcome Company suggested excluding 
any employment experience prior to an employee resignation or employer-
initiated termination that occurred more than two years before the 
current date of reemployment. Another commenter, the State of Kansas 
Department of Administration, suggested limiting the 12 months of 
service to the period immediately preceding the commencement of leave. 
The ERISA Industry Committee argued that the 12 months should be either 
consecutive months, or 12 months of service as computed under bridging 
rules applicable to employer's pension plans.
    Many employers require prospective employees to submit applications 
for employment which disclose employees' previous employment histories. 
Thus, the information regarding previous employment with an employer 
should be readily available and may be confirmed by the employer's 
records if a question arises. Further, there is no basis under the 
statute or its legislative history to adopt these suggestions.
    A number of commenters urged clarifications with respect to the 
determination of 1,250 hours of service during the 12-month period 
preceding the commencement of leave. The Equal Rights Advocates argued 
that any FMLA leave taken in the previous 12 months should be included 
in the calculation of the requisite 1,250 hours of work. The State of 
New York Metropolitan Transportation Authority stated that it was not 
clear whether time paid but not worked (i.e., vacation and personal 
days) should be counted and urged limiting the determination to only 
[[Page 2186]] actual hours worked. The Edison Electric Institute made 
the same observation but noted that the standard in Sec. 825.105 for 
determining coverage--50-employee test--is based on employees appearing 
on the employer's payroll. In addition to vacation time, the Society 
for Human Resource Management asked whether overtime hours worked are 
to be included in the calculation. The Air Line Pilots Association also 
urged inclusion of all compensated hours (vacation, holiday, illness, 
incapacity, lay-off, jury duty, military duty, official company 
business, leave of absence or official union business) in determining 
the 1,250 hours of service. Finally, the Tennessee Association of 
Business requested clarification of the status of employees who are 
temporarily laid off for 2 or 3 weeks because of a plant shutdown.
    The eligibility criteria are set forth in Sec. 101(2) of FMLA as a 
statutory definition of ``eligible employee.'' One component of the 
definition (Sec. 101(2)(C)) states that for purposes of determining 
whether an employee meets the hours of service requirement, the legal 
standards established under Sec. 7 of the FLSA shall apply. The 
legislative history explains that the minimum hours of service 
requirement is meant to be construed in a manner consistent with the 
legal principles established for determining hours of work for payment 
of overtime compensation under Sec. 7 of the FLSA and regulations under 
that act, citing specifically 29 CFR Part 785 (Hours Worked [Under the 
FLSA]) and referencing 29 CFR 778.103 (which in turn states that the 
principles for determining what hours are hours worked within the 
meaning of the FLSA are discussed in 29 CFR Part 785). ``Hours worked'' 
does not include time paid but not ``worked'' (paid vacation, personal 
or sick leave, holidays), nor does it include unpaid leave (of any 
kind) or periods of layoff. Whether the hours are compensated or 
uncompensated is not determinative for purposes of FMLA's 1,250-hours-
of-service test. The determining factor in all cases is whether the 
time constitutes hours of work under FLSA. Because overtime hours 
worked are ``hours worked'' within the meaning of FLSA, they are 
included.
    The National Restaurant Association noted that the determination of 
the 1,250 hour/12 months test must be made as of the date leave 
commences; whereas the 50 employee within 75 miles test is to be 
determined when the employee requests FMLA leave. The Association 
argued that the same date should be used for determining all 
eligibility requirements. The USA Chamber of Commerce argued that 
Sec. 825.110(d) as written forces an employer to avoid providing an 
ineligible employee with an estimated date of eligibility, a potential 
benefit for both employee and employer, because the employer that makes 
such an estimate is precluded from later challenging the employee's 
eligibility. This, according to the Chamber, ignores the very real 
possibility that an employee may reach the projected date and still not 
be eligible.
    As explained in the preamble of the Interim Final Rule, the purpose 
and structure of FMLA's notice provisions intentionally encourage as 
much advance notice of an employee's need for leave as possible, to 
enable both the employer to plan for the absence and the employee to 
make necessary arrangements for the leave. Both parties are served by 
making this determination when the employee requests leave. Tying the 
worksite employee-count to the date leave commences as suggested could 
create the anomalous result of both the employee and employer planning 
for the leave, only to have it denied at the last moment before it 
starts if fewer than 50 employees are employed within 75 miles of the 
worksite at that time. This would entirely defeat the notice and 
planning aspects that are so integral and indispensable to the FMLA 
leave process. Accordingly, no changes have been made in response to 
the comments received from the National Restaurant Association and the 
Chamber of Commerce of the USA.
    Several commenters (Nationsbank Corporation and South Coast Air 
Quality Management District) indicated that the terms ``employee'' and 
``eligible employee'' required clarification regarding independent 
contractors, contract employees, and consultants. The Dow Chemical 
Company suggested that students working in co-op programs approved by 
their schools should not be deemed an employee eligible for FMLA 
benefits.
    FMLA's definitions of ``employ'' and ``employee'' are ``borrowed'' 
from the FLSA. If a particular arrangement in fact constitutes an 
employee-employer relationship within the meaning of the FLSA (and case 
law thereunder) as contemplated by the statutory definitions, and the 
``employee'' satisfies FMLA's eligibility criteria, the employee is 
entitled to FMLA's benefits. A true independent contractor relationship 
within the meaning of the FLSA would not constitute an employee-
employer relationship. Thus, an independent consultant operating his or 
her own business ordinarily would not be considered an ``employee'' of 
the business that hires the consultant's services. Employees hired for 
a specified term to perform services under contract (``contract 
employees'') would ordinarily be subject to FMLA if they otherwise meet 
FMLA's 12 months and 1,250-hours-of-service (with the ``employer'') 
eligibility criteria. It has been our experience that such persons 
rarely qualify as independent contractors under the FLSA, and, 
therefore, they would rarely qualify as independent contractors under 
FMLA. There would be no authority under the statute to exclude students 
working in co-op programs approved by their schools if the arrangement 
otherwise meets the criteria for an employee-employer relationship. 
Many such students, however, may not be ``eligible'' under FMLA if they 
have not worked for the employer for at least 12 months and for at 
least 1,250 hours.
    With respect to the 1,250 hours of service test, the California 
Rural Legal Assistance, Inc. expressed concern about situations where 
employers fail to keep required records of hours worked, and urged a 
reference to the ``Mt. Clemens Pottery rule'' as being applicable to 
such situations.
    This comment refers to the U.S. Supreme Court's decision in 
Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946), which 
provided a lighter burden of proof for employees where employers failed 
to maintain required records. The regulations already provide that 
eligibility is presumed for FLSA-exempt employees who have worked at 
least 12 months. The regulations have been revised in this section to 
provide the same presumption where FMLA-covered employers with 50 or 
more employees fail to keep records required for purposes of 
establishing employee eligibility for FMLA leave.
    The American Federation of Teachers and the National Education 
Association expressed concern that employers may intentionally reduce 
or otherwise manipulate an employee's hours to avoid FMLA eligibility, 
and urged that such conduct be treated as a violation of the Act. This 
matter will be addressed in Sec. 825.220(b) (the ``prohibited acts'' 
section of the regulations) by providing that FMLA-covered employers 
that intentionally limit or manipulate employees' work schedules to 
foreclose their eligibility for FMLA leave will be held in violation of 
the provisions of FMLA and these regulations which prohibit interfering 
with employees' exercise of rights.
    The Air Line Pilots Association (ALPA) requested clarification of 
the [[Page 2187]] discussion in the preamble about determining 1,250 
hours of service, specifically the statement that on-call time includes 
``* * * hours of service where it meets the FLSA hours-worked 
requirements (29 CFR Part 785.17), as would ground time for flight 
crews.'' According to the ALPA, the term ``ground time'' requires 
clarification as applied in the airline industry, which typically 
distinguishes between ``flight'' time (time an airplane is actually in 
the air from take-off to landing), ``duty'' time (hours a pilot is on 
duty beginning with checkin for departure until returning to the 
domicile) and ``reserve'' time (designated on-call period when pilot 
must be available to be reached by phone, and must be able to report to 
the airport within one to three hours' notice). Pilots typically 
receive different rates of pay for the reserve time, the flight time 
and an hourly per-diem for all duty time. The commenter argues that all 
hours credited for such pay should be credited for hours of service.
    Crediting the time attributable to all such pay would exceed the 
number of actual hours worked within the meaning of the FLSA and thus 
be contrary to FMLA's provisions on crediting hours of service based on 
FLSA ``hours worked'' principles. Hours of service would normally 
include all ``duty'' time. ``Reserve'' time would not be included 
unless employees have further restrictions on their time so that they 
would be unable to use the time for their own purposes.
    The International Brotherhood of Teamsters argued that the 1,250 
hours of service test as currently defined effectively precludes 
coverage of airline crew members under FMLA. While Sec. 825.110(c) 
applies FLSA principles for determining hours of service, the commenter 
notes that section 13(b) of the FLSA excludes any employee of a carrier 
by air subject to the provisions of Title II of the Railway Labor Act 
from the Act's provisions in section 207. According to the commenter, 
airline crew members' work schedules and pay formulas are predicated on 
``flight hours,''--generally amounting to one-third of the hours of 
employees covered by the FLSA--and flight crew members are prohibited 
by regulation from exceeding 1,000 flight hours in a 12-month period. 
The commenter contends that it is improper to compare flight crew 
``hours of service'' with the ``hours of service'' performed by FLSA-
covered employees and that airline crew members should be specifically 
exempted from the minimum hours of service requirement.
    Section 13(b) of the FLSA provides exemptions from FLSA's 
requirement to pay overtime compensation in certain cases; they are not 
exemptions from the rules on what constitutes ``hours worked'' within 
the meaning of the FLSA. The fact that a particular class of employee 
is exempt from overtime under FLSA Sec. 13(b) has no impact on the 
applicability of FLSA's ``hours worked'' rules under 101(2)(C) of the 
FMLA. Because the eligibility criteria are statutory, DOL lacks the 
authority to exempt airline crew members from the minimum hours of 
service criteria. As pointed out above, however, other ``duty'' time 
would normally be hours of service, in addition to the flight time.
50 Employees within 75 Miles (Sec. 825.111)
    One of the tests for employee eligibility for FMLA leave requires 
that there be 50 employees employed by the employer within 75 miles of 
the worksite. This section described how ``worksite'' is construed and 
how to measure the 75 miles under this test.
    The Equal Rights Advocates questioned measuring the 75 mile 
requirement by road miles and advocated a broader interpretation such 
as actual mileage between two employment facilities. The Medical Group 
Management Association stated that measuring a radius around a single 
point using road miles was very difficult and suggested a standard of 
traveling ``75 miles in any direction using public surface 
transportation.''
    The regulations have been clarified by deleting the reference to 
``radius,'' a term not found in the statute. The 75-mile distance will 
be measured by surface miles using available transportation by the most 
direct route between worksites.
    The Institute of Real Estate Management and 29 other associated 
real estate management companies complained that the 75-mile rule for 
determining employee eligibility creates unique hardships for most 
property management companies and could cause serious economic harm in 
the absence of industry-specific modifications.
    The National Association of Temporary Services was also concerned 
over the impact of the 50-employee/75-mile eligibility test on 
temporary help offices, noting that most temporary help offices operate 
with very small office staffs but on any given day may have a 
significant number of temporary employees assigned to customer 
worksites. Because temporaries assigned to customers within 75 miles of 
the office are included in the eligibility determination, staff 
employees of two or three person offices become eligible for FMLA 
leave, which, according to the commenter, works a hardship on small 
temporary help offices. The commenter urged an exception which would 
permit such offices to exclude from the eligibility test those 
temporary employees assigned out of any particular office--temporaries 
would still be eligible if secondary employers have a total of 50 
employees within 75 miles of their worksite. In support of this 
position, the commenter points to a colloquy between Congressman 
Derrick and Congressman Ford on H.R. 1 (Cong. Rec. 139, H396-7 (Feb. 3, 
1993)) in which Congressman Ford indicated that the matter of temporary 
help offices with small staffs would be an appropriate subject for 
rulemaking and his hope that implementing regulations would address 
such situations taking into account the broad purpose of the Act to 
provide protection to as many employees as possible and, at the same 
time, the legitimate concerns of small businesses.
    Employees employed by a temporary help office have, as their 
``single site of employment'' worksite under FMLA, the site from which 
their work is assigned (i.e., the temporary help office). Thus, all 
temporary employees assigned from the temporary help office, regardless 
of whether the customers' worksites are within 75 miles of the 
temporary help office, are included in the employee count for the 
temporary help office in determining if staff employees are eligible 
for FMLA leave. This provision, in our judgment, is required by the 
express intention of the Congress in the committee reports that the 
WARN Act regulations be used to determine ``worksite.'' We believe that 
the implementing regulations accurately reflect, consistent with the 
express confines of the statute itself, the Congress' broad purpose to 
provide FMLA's protection to as many employees as possible while, at 
the same time, considering the legitimate concerns of small businesses.
    Section 825.111(d) provides that eligibility determinations are to 
be made by employers when the employee requests the leave; once 
eligibility has been established in response to the request, subsequent 
changes in the number of employees employed at or within 75 miles of 
the employee's worksite will not affect the employee's eligibility or 
leave once commenced. These provisions attracted considerable comment.
    The California Rural Legal Assistance, Inc. argued that using the 
date the employee requests leave as the ``trigger'' date will deprive 
eligibility to many seasonal employees, especially if they 
[[Page 2188]] give the requisite 30-days notice, because the 50-
employee threshold may not be reached until the peak employment season. 
The commenter urges an alternate test for seasonal and other employers 
whose workforce varies greatly during the year, in particular that the 
test should allow a determination of eligibility at the time of the 
request if the employer can be expected to have at least 50 employees 
during any period in which FMLA leave is to be taken. This commenter 
would also apply such a test for teachers because many teachers are not 
actually under contract until just before or even after the school year 
has begun. In the alternative, the commenter suggested a position that 
an employee should be considered on the payroll as long as he or she is 
on an involuntary layoff with a reasonable expectation of returning to 
work within a reasonable period of time.
    The Women's Legal Defense Fund, the Service Employees International 
Union, and the United Paperworkers International Union also expressed 
concern about determining eligibility from an employee count on a 
single day, i.e., date of request, stating that such a test is 
arbitrary and subject to wide variation due to workforce fluctuations. 
They urged adoption of the counting method in the Act for determining 
employer coverage on the grounds that it is the only counting method 
statutorily based and is consistent with the legislative history. Thus, 
under this position, an employee would be eligible for FMLA leave if 
the employer has employed 50 or more employees within 75 miles of the 
employee's worksite for each working day during each of 20 or more 
calendar workweeks in the current or preceding calendar year.
    A number of commenters stated that the ``date of request'' as a 
trigger date would be burdensome for employers in cyclical industries. 
Several commenters (California Department of Fair Employment and 
Housing and the Greater Cincinnati Chamber of Commerce) endorsed the 
option discussed in the preamble to the interim final rule: ``* * * 
where notice is given 30 or more days prior to the commencement of 
leave, the count would be made on the 30th day preceding the start of 
leave, or, at the employer's option, as of the date leave is requested; 
where 30 days notice is not given, the count would be made at the time 
notice is given or the date leave begins, whichever is earlier.'' The 
Society of Human Resource Management supported a trigger date of ``30 
days prior to the onset of leave.'' To accommodate the particular needs 
of seasonal employers under the ``date of request'' trigger date, 
Southern Electric International, Inc. suggested that employers be 
permitted to cancel or reduce requested leave if the employee count 
falls below some reasonable number, i.e., 40, by the time the leave is 
to be taken. The National Restaurant Association argued that the same 
date should be used for determining all eligibility requirements and 
the law firm of Sommer & Barnard also recommended a uniform eligibility 
criteria determination date, endorsing the ``date of commencement of 
leave.'' The United Paperworkers International Union also endorsed 
uniformity in the methods of counting eligible employees and covered 
employers.
    The USA Chamber of Commerce noted that under Sec. 825.111(d) 
eligibility is a continuing, day-to-day determination, even during FMLA 
leave, and that an employee who is initially ineligible can 
subsequently become eligible. The commenter argues that the rationale 
should be consistent: if an ineligible employee can become eligible, 
then an eligible employee should be able to subsequently become 
ineligible and, thus, not be entitled to continue FMLA leave.
    The Department has given careful consideration to all of the 
comments submitted in connection with the rule for determining employee 
eligibility based on the number of employees maintained on the payroll 
as of the date that an employee requests leave. We see no justifiable 
basis for altering our earlier policy decisions as reflected in the 
Interim Final Rule. In our view, none of the recommendations suggest a 
course that would be entirely consistent with the literal language of 
the FMLA, its remedial purpose, or the expressions of Congressional 
intent contained in the legislative history. Congress directly 
addressed the treatment to be accorded seasonal, temporary and part-
time employees by establishing statutory employer coverage and employee 
eligibility criteria. The Act exempts smaller and certain seasonal 
businesses by limiting coverage to employers with 50 or more employees 
in 20 or more calendar weeks of the year. It does not cover part-time 
or seasonal employees working less than 1,250 hours a year. To be 
eligible for leave, an employee must have worked for the employer for 
at least 12 months and for at least 1,250 hours during the 12-month 
period preceding the commencement of the leave. The employer must also 
employ at least 50 employees within 75 miles of the employee's 
worksite. Given Congress' specific treatment of these issues in the 
legislation, DOL lacks authority to write special rules for determining 
employee eligibility for seasonal workers in ways that depart from the 
statutory standards adopted in the legislation.
    As explained in the preamble of the Interim Final Rule (and as 
noted above), the purpose and structure of FMLA's notice provisions 
intentionally encourage as much advance notice of an employee's need 
for leave as possible, to enable both the employer to plan for the 
absence and the employee to make necessary arrangements for the leave. 
Both parties are served by making this determination when the employee 
requests leave. But, at the same time, both parties need to be able to 
rely on the commitments they are making. Tying the worksite employee-
count to the date leave commences as suggested could result in both the 
employee and the employer planning for the leave, only to have it 
denied at the last moment before it starts if fewer than 50 employees 
are employed within 75 miles of the worksite at that time. This would 
entirely defeat the notice and planning aspects that are an integral 
part of the FMLA leave process. The same would be true if employers 
were permitted to cancel or reduce requested leave if the employee 
count fell below some arbitrary number (e.g., 40) at the time leave was 
being taken. As explained in the preamble to the Interim Final Rule, 
use of both a fixed date and the same date for determining employer 
coverage were previously considered and rejected as being inconsistent 
with the literal language of the Act and the legislative history, which 
both use the present tense in describing ``eligible'' employees (i.e., 
employee is eligible if employed at least 12 months by the employer ``* 
* * with respect to whom leave is requested * * *''; but excludes any 
employee ``* * * at a worksite at which such employer employs less than 
50 employees if the total * * * [within 75 miles] is less than 50.'').
    Accordingly, while clarifications are included to more carefully 
explain the applicable principles, no significant changes are included 
in this section to alter the policy on the timing of determining 
employee eligibility.
    The term ``worksite'' also generated considerable comment. The Los 
Angeles County Metropolitan Transportation Authority and Society for 
Human Resource Management stated that additional guidance was needed to 
determine eligibility, particularly with respect to salespersons who 
work out of their homes. The International Organization of Masters, 
Mates & Pilots stated that the applicable ``worksite'' in the case of 
maritime employment should be defined as the home office of 
[[Page 2189]] the employer from which the job assignment originates, 
and the United Paperworkers International Union stated that, in the 
case of workers without a fixed worksite, the reference point should be 
those employees defined in the bargaining unit by any applicable 
collective bargaining agreement. For employees who typically have no 
fixed worksite, the USA Chamber of Commerce urged a provision that 
makes clear that an employee has only one worksite for purposes of 
making eligibility and coverage determinations.
    In the case of pilots and flight crew members, the Air Line Pilots 
Association, Association of Professional Flight Attendants and 
Independent Federation of Flight Attendants contend that the 
characterization of a home base as an employee's worksite would be 
inappropriate in the airline industry because the actual ``worksite'' 
ranges across a particular carrier's entire route system due to the 
availability and flexibility of the large number of employees employed 
in such job categories. They argue that employees at worksites with 
less than 50 employees within 75 miles should be eligible for FMLA 
leave if the employer (airline) employs more than 50 employees at all 
of its worksites and such employer can replace the employee on leave 
with another current employee through an employer-wide seniority system 
in the affected job classification.
    Many of the comments reflect a misunderstanding of the ``worksite'' 
concept under the FMLA regulations. FMLA's legislative history explains 
that when determining if 50 employees are employed by the employer 
within 75 miles of the worksite of the employee intending to take 
leave, the term ``worksite'' is intended to be construed in the same 
manner as the term ``single site of employment'' under the WARN Act 
regulations (20 CFR Part 639). The legislative history further states 
that where employees have no fixed worksite, as is the case for many 
construction workers, transportation workers, and salespersons, such 
employees' ``worksite'' should be construed to mean the single site of 
employment to which they are assigned as their home base, from which 
their work is assigned, or to which they report. The regulations 
included these concepts.
    Accordingly, salespersons who work out of their homes have as their 
single site of employment the site ``from which their work is assigned 
or to which they report'' (for example, the corporate or regional 
office). Their homes are not their ``single site of employment'' in any 
case. Tracking the number of employees in a collective bargaining unit, 
or defining the worksite for flight crew members as a carrier's entire 
route system, would deviate significantly from the legislative 
history's discussion of the applicable principles and cannot be adopted 
as suggested in the comments. (Members of flight crews thus have as 
their ``worksite'' the ``site to which they are assigned as their home 
base, from which their work is assigned, or to which they report.'')
    One commenter, Employers Association of New Jersey, indicated that 
more guidance was needed on what employees are to be counted. The 
commenter asked whether only eligible employees as defined in 
Sec. 825.110 are counted, or are temporarily inactive employees 
counted, such as those on leave of absence, strike, etc. As noted 
above, the employee count must include all employees of the employer 
who are ``maintained on the payroll,'' including part-time, full-time, 
eligible and non-eligible employees. It must also include employees on 
paid or unpaid leaves of absence. Employees who have been laid off 
(whether temporary, indefinite, or long-term) are not included. (See 
the discussion of related issues under Sec. 825.105.) In effect, the 
test of whether an individual is counted as an ``employee'' depends 
upon whether there is a continuing employment relationship, and being 
``maintained on the payroll'' is used as a proxy for establishing the 
continuing nature of the relationship.
Leave Entitlement (Sec. 825.112)
    Section 825.112 sets forth the basic statutory circumstances for 
which employers must grant FMLA leave. A number of commenters addressed 
these circumstances with suggestions, recommendations, or requests for 
clarifications. For example, Lancaster Laboratories suggested that an 
employer should not be required to approve prenatal care visits if such 
appointments could be scheduled outside of normal working hours. United 
Federal Credit Union felt that employers should be able to place a cap 
on how many employees may be on FMLA leave at any one time, with 
discretion linked to business needs. Another commenter indicated that 
FMLA leave should be allowed for a sister or brother living with the 
employee. The Society for Human Resource Management asked whether the 
terms ``placement * * * for adoption'' covered the situation where a 
child was placed in a new home for adoption and time was needed for 
bonding between the new parent and the child. The Society also asked if 
a pregnant employee were well enough to return to work after six weeks, 
but had requested 12 weeks, could the employer require the employee to 
return to work after six weeks. Oregon Bureau of Labor and Industries 
observed that Sec. 825.112(d) states there is no age limit on a child 
being adopted or placed for foster care, but Sec. 825.113(c) defines 
``son or daughter'' to be a person under the age 18, or 18 or older and 
incapable of self-care, and questioned whether FMLA leave was available 
for adoption of a child age 18 or older who is capable of self-care. 
The Equal Employment Advisory Council argued, with respect to an 
employee who marries and requests FMLA leave to be with new 
stepchildren, that such leave should be explicitly prohibited unless 
the employee formally adopts the stepchildren.
    California Department of Fair Employment and Housing and the law 
firm of Fisher and Phillips urged Sec. 825.112 be expanded to 
incorporate provisions stated elsewhere in the regulations. 
Specifically, they argued that the definition of ``son or daughter'' in 
Sec. 825.113 as it relates to the availability of FMLA leave to an 
employee who stands in loco parentis to a child should be added to 
Sec. 825.112(a)(1), and that Sec. 825.112(d) should be amended to 
reference the limitation in Sec. 825.203 on the use of intermittent 
leave for purposes of birth, adoption or placement of a foster child 
that such leave is available only if the employer agrees. Sommer & 
Barnard noted that while an employee may be eligible for FMLA leave 
before ``the actual date of birth'' or ``actual placement,'' there is 
no provision in the regulations that would permit an employer to 
require verification that leave requested for such purposes is for a 
statutory purpose.
    With respect to scheduling prenatal care doctor's visits, the Act 
and regulations require that in any case where the need for leave is 
foreseeable based on planned medical care, the employee shall make a 
bona fide, reasonable effort to schedule the leave in a manner that 
does not unduly disrupt the employer's operations (subject to the 
approval of the employee's (or family member's) health care provider). 
However, it would be contrary to the statute for an employer to place 
any cap on the number of employees who could be eligible for FMLA leave 
at any one time, or for the regulations to require employers to grant 
the same type of leave entitlement for a sister or brother living with 
the employee as FMLA provides for a spouse (although employers could 
adopt more generous leave policies than the [[Page 2190]] minimums 
established by FMLA). With respect to leave for the birth of a child, 
the statute entitles an employee to FMLA leave for a period of up to 12 
weeks for the birth and care of a child. Under the circumstances 
described by the Society for Human Resource Management, the employee 
may not be required to return to work after six weeks if the employee 
desires 12 weeks of FMLA leave for the birth of her child.
    In response to the question on whether FMLA's leave entitlement for 
placement for adoption includes ``bonding'' time between the parent and 
child, we note from the legislative history's discussion of the need 
for family and medical leave legislation that:
    Adoptive parents also face difficulties in the absence of a 
reasonable family leave policy. Most adoption agencies require the 
presence of a parent in the home--some for as long as four months--when 
a child is placed with the family to allow them adequate time for 
proper bonding. * * *
    The legislative history's discussion of the leave provisions 
themselves provides:
    Section 102(a)(2) requires that leave provided under Sec. 102(a)(1) 
(A) or (B) to care for a newborn child or a child newly placed with the 
employee for adoption or foster care be taken before the end of the 
first 12 months following the date of the birth or placement. * * *
    Clearly, the intent of FMLA's leave entitlement in the case of 
leave for placement of a child with the employee for adoption or foster 
care includes ``bonding'' time with the newly-placed child, during the 
12 months following the date of placement.
    In response to the commenter who questioned whether FMLA leave is 
available for adoption of a child age 18 or older who is capable of 
self-care, upon reexamination of the statutory definitions and leave 
entitlement provisions of the Act, we have concluded that the 
availability of leave for adoption of a child age 18 or older is 
limited to those who are incapable of self-care because of a mental or 
physical disability, consistent with the statutory definition of ``son 
or daughter'' in Sec. 101(12) of the FMLA. The regulations have been 
revised to delete the statement that there is no maximum age limit for 
a child placed for adoption or foster care. Regarding the employee who 
marries and requests FMLA leave to be with new stepchildren, FMLA leave 
would only be available if the employee in that case formally adopted 
the stepchildren, as the commenter pointed out. However, if one of the 
children subsequently has a serious health condition, the stepparent 
would be entitled to FMLA leave to care for the child.
    Many comments suggesting clarification or reiteration of provisions 
contained elsewhere in the regulations are being adopted. The 
regulations are also being revised at Sec. 825.113 to permit an 
employer to request that employees provide reasonable documentation 
that verifies the legitimacy of an FMLA leave request, i.e., that 
requested leave is for a qualifying statutory purpose. Reasonable 
documentation of a qualifying reason for FMLA leave can take the form 
of a simple signed statement by the employee. The employer's policies 
in this area should be communicated in advance to employees and be 
applied uniformly, and employees must be given a reasonable opportunity 
to respond.
    Section 825.112(e) provides that ``State'' action must be involved 
in foster care placement to qualify for FMLA leave. The Community Legal 
Services, Inc. and Women's Legal Defense Fund stated that the ``State'' 
involvement requirement was not supported by the statute, legislative 
history, or sound public policy, and argued that the statutory 
definition of a ``son or daughter,'' which includes a ``child of a 
person standing in loco parentis,'' implies that FMLA leave should be 
available whenever an employee takes primary responsibility for the 
care of a child with the intention of adopting or otherwise having day-
to-day caretaking responsibility for that child. Thus, for example, 
parents of addicts who assume responsibility as primary caretakers for 
the addicts' children is a form of ``foster'' care in which FMLA leave 
should be available to such parents.
    Section 102(a)(1)(B) of FMLA entitles an eligible employee to take 
FMLA leave ``[b]ecause of the placement of a son or daughter with the 
employee for adoption or foster care'' (emphasis added). Thus, the 
entitlement to leave under this section of the Act relates only to the 
actual placement with the eligible employee of an adopted or foster 
child. The act of providing ``foster care,'' in and of itself, is not a 
qualifying reason for taking FMLA leave under the statute. On the other 
hand, in the example of parents of addicts who assume the primary, day-
to-day responsibilities to care for and financially support the 
addicts' children, the in loco parentis relationship thus established 
could entitle the in loco parentis parents to take FMLA leave under a 
different section of the FMLA, Sec. 102(a)(1)(C), if the in loco 
parentis parent was needed to care for the ``child'' (of the person 
standing in loco parentis) for a serious health condition (subject to 
the Act's medical certification provisions). FMLA's legislative history 
fully supports this view:

    The terms ``parent'' and ``son or daughter'' * * * reflect the 
reality that many children in the United States today do not live in 
traditional ``nuclear'' families with their biological father and 
mother. Increasingly, those who find themselves in need of workplace 
accommodation of their child care responsibilities are not the 
biological parent of the children they care for, but their adoptive, 
step, or foster parents, their guardians, or sometimes simply their 
grandparents or other relatives or adults. This legislation deals with 
such families by tying the availability of ``parental'' leave to the 
birth, adoption, or serious health condition of a ``son or daughter'' 
and then defining the term ``son or daughter'' to mean ``a biological, 
adopted, or foster child, a stepchild, a legal ward, or a child of a 
person standing in loco parentis * * *.'' * * *
Definition of Spouse, Parent, Son or Daughter (Sec. 825.113)
    FMLA entitles an eligible employee to take leave ``in order to care 
for the spouse, or a son, daughter, or parent, of the employee, if such 
spouse, son, daughter, or parent has a serious health condition'' 
(emphasis added). Section 825.113(a) defines the term ``spouse'' to 
mean a husband or wife as defined or recognized under State law for 
purposes of marriage, including common law marriage in States where it 
is recognized. A considerable number of comments urged that this 
definition be broadened to include domestic partners in committed 
relationships including same-sex relationships, or, in the alternative, 
to include all unions recognized by State or local law. The Society for 
Human Resource Management questioned whether an employer located in one 
State which does not recognize common law marriages would be required 
to grant FMLA leave to its employees with common law spouses who reside 
in another State that recognizes common law marriages. William M. 
Mercer, Inc. also recommended clarification of which State law would be 
controlling when the employee works in a different State.
    FMLA defines the term ``spouse'' to mean ``a husband or wife, as 
the case may be.'' In discussing this definition during Senate 
consideration of the legislation, Senator Nickles noted:

    [[Page 2191]] * * * This is the same definition that appears in 
Title 10 of the United States Code (10 U.S.C. 101).
    Under this amendment, an employer would be required to give an 
eligible female employee unpaid leave to care for her husband and an 
eligible male employee unpaid leave to care for his wife. No 
employer would be required to grant an eligible employee unpaid 
leave to care for an unmarried domestic partner.
    This simple definition will spare us a great deal of costly and 
unnecessary litigation. Without this amendment, the bill would 
invite lawsuits by workers who unsuccessfully seek leave on the 
basis of their unmarried adult companions. (Cong. Rec. (S 1347), 
Feb. 4, 1993.)

    Accordingly, given this legislative history, the recommendations 
that the definition of ``spouse'' be broadened cannot be adopted. The 
definition is clarified, however, to reference the State ``in which the 
employee resides'' as being controlling for purposes of an employee 
qualifying to take FMLA leave to care for the employee's ``spouse'' 
with a serious health condition.
    Section 825.113(b) of the regulations defined ``parent,'' as 
provided in Sec. 101(7) of the FMLA, to mean a biological parent or an 
individual who stands or stood in loco parentis to an employee when the 
employee was a child. The regulatory definition noted that the term did 
not include a parent ``in-law.'' Several commenters (City of 
Alexandria, Virginia; Fairfax Area Commission on Aging; Northern 
Virginia Aging Network; the Brooklyn and Green Mountain Chapters of the 
Older Women's League; Sisters of Charity of Nazareth; Retail, Wholesale 
and Department Store Union; and University of Vermont) viewed the 
regulatory definition as too restrictive, recommending in some 
instances that the term ``parent'' be broadened to specifically include 
parents ``in-law.'' (An additional 107 cards or letters were received 
from individuals endorsing this view.)
    Standard rules of statutory construction require that we interpret 
the availability of FMLA leave for a ``parent'' in a manner consistent 
with FMLA's definition of ``parent,'' which is limited to the 
employee's biological parent or an individual who stood in loco 
parentis to the employee when the employee was a child, and does not 
extend to a parent ``in-law.'' Moreover, the leave entitlement under 
Sec. 102(a)(1)(C) of FMLA is expressly limited to ``* * * care for the 
* * * parent, of the employee, if such * * * parent has a serious 
health condition.'' Thus, each eligible spouse may take qualifying FMLA 
leave to care for his or her own biological (or in loco parentis) 
``parent'' who has a serious health condition, but the leave 
entitlement cannot be extended by regulation to parents ``in-law.''
    FMLA Sec. 101(12) defines ``son or daughter'' in part as one who is 
under age 18, or age 18 or older and ``incapable of self-care because 
of a mental or physical disability.'' The Older Women's League, in 
commenting on the ``incapable of self-care'' provisions defined in 
Sec. 825.113(c)(1), was concerned that requiring that an individual 
need active assistance or supervision to provide daily self-care in 
``several'' of the ``activities of daily living'' would be interpreted 
to mean three or more, absent clarification, which they believe would 
unduly restrict eligibility for FMLA leave. The Consortium for Citizens 
With Disabilities, the Epilepsy Foundation of America, and the United 
Cerebral Palsy Association recommended that the definition of 
``incapable of self-care'' be supplemented with additional criteria 
which more accurately reflect the needs of all people with 
disabilities, suggesting that ``instrumental activities of daily 
living'' or IADL's (activities necessary to remain independent) should 
be added to address the needs of people with mental and cognitive 
impairments.
    In response to the comments received on this section, ``incapable 
of self-care'' is defined in the final rule to include, in addition to 
the ``activities of daily living,'' the ``instrumental activities of 
daily living,'' as recommended. We interpret ``several'' to mean more 
than two but fewer than many, i.e., three or more (see Webster's; 
Black's Law).
    The Equal Employment Opportunity Commission (EEOC), in commenting 
on ``physical or mental disability'' in Sec. 825.113(c)(2), noted that 
the DOL rule cited, as a cross-reference, EEOC's entire regulatory part 
under the Americans with Disabilities Act (ADA), 29 CFR 1630, for 
defining ``physical or mental disability.'' Because the current illegal 
use of drugs is not a disability within the meaning of the ADA, EEOC 
expressed concern that the broader cross-reference to the entire 
regulatory part could create confusion over whether an adult child 
currently engaging in the illegal use of drugs would be ``disabled'' 
for purposes of a parent qualifying to take FMLA leave. EEOC suggested 
that DOL be more specific in citing to the pertinent ADA regulations to 
foreclose the argument that ``physical'' or ``mental'' disability in 
this context would not include the current illegal use of drugs. We 
have adopted EEOC's suggestion in the final rule. An eligible 
employee's son or daughter who illegally uses drugs may be disabled for 
purposes of an eligible parent (employee) taking FMLA leave.
    The University of Michigan includes in-laws, domestic partners, and 
other relatives within a broader definition of ``family'' for purposes 
of its family leave policies. The University suggested that the 
regulations enable employers that have extended their family leave 
policies to such ``non-traditional'' families to count as part of an 
employee's FMLA leave entitlement leave that is taken to care for such 
broader definitions of ``family.'' This issue is addressed in 
Sec. 825.700 of the regulations, which discusses the effect of employer 
policies that provide greater benefits than those required by FMLA. We 
interpret the statute as prohibiting an employer from counting as a 
part of an employee's FMLA leave entitlement leave granted for a reason 
that does not qualify under FMLA.
    The law firm of Orr and Reno, and the Chicagoland Chamber of 
Commerce, et al., urged that in addition to medical certifications 
presently required, the regulations should include provision for 
requests relating to child care because it is not always obvious that 
the leave is justified, particularly with respect to a father or in 
foster care situations.
    Although leave to provide ``child care'' would not ordinarily 
qualify as FMLA leave if the child is not a newborn (in the first year 
after the birth) and is otherwise healthy, FMLA leave is ``justified'' 
(and may not be denied by the employer) if it is taken for one of 
FMLA's qualifying reasons, including where a father wants to stay home 
with a healthy newborn child in the first year after the birth, or 
needs to be home to care for a child with a serious health condition, 
or for placement with the employee of a child for foster care. The 
regulations have been amended in Sec. 825.113(d) to permit employers to 
require reasonable documentation from the employee for confirmation of 
family relationships.
Definition of ``Serious Health Condition'' (Sec. 825.114)
    Section 101(11) of FMLA defines ``serious health condition'' to 
mean
    * * * an illness, injury, impairment, or physical or mental 
condition that involves--
    (A) inpatient care in a hospital, hospice, or residential medical 
care facility; or
    (B) continuing treatment by a health care provider.
    This scant statutory definition is further clarified by the 
legislative history. The congressional reports did indicate that the 
term was not intended [[Page 2192]] to cover short-term conditions for 
which treatment and recovery are very brief, as Congress expected that 
such conditions would be covered by even the most modest of employer 
sick leave policies. While the meaning of inpatient care is evident 
(i.e., an overnight stay in the hospital, etc.), the concept of 
``continuing treatment'' presents more difficult issues. Under the 
Interim Final Rule, ``continuing treatment'' required two or more 
visits to a health care provider or a single visit followed by a 
prescribed regimen of treatment, or a serious, incurable condition 
which existed over a prolonged period of time under the continuing 
supervision of a health care provider. When deciding upon the 
regulatory guidance for the definition in the Interim Final Rule, the 
Department relied heavily upon definitions and concepts from the Office 
of Workers' Compensation Programs. For example, under many State 
workers' compensation laws and the Federal Employees' Compensation Act 
(FECA), a three-day waiting period is applied before compensation is 
paid to an employee for a temporary disability. A similar provision was 
included in the FMLA rules; a period of incapacity of ``more than three 
days'' was used as a ``bright line'' test based on the references in 
the legislative history to serious health conditions lasting ``more 
than a few days.''
    Eighty-eight comments were received on the regulatory definition of 
``serious health condition.'' Many commenters objected to the language 
in Sec. 825.114(a)(3), which provided that a period of incapacity of 
more than three calendar days was an indicator of a serious health 
condition, and Sec. 825.114(b)(2), which defined continuing treatment 
as including one visit to a health care provider which results in a 
regimen of continuing treatment under the supervision of the health 
care provider, e.g., a course of medication or therapy to resolve the 
health condition. Some contended that the ``more than three days'' test 
encouraged employees to remain absent from work longer than necessary 
for the absence to qualify as FMLA leave, or that the duration of the 
absence was not a valid indicator of serious health conditions that are 
very brief (e.g., a severe asthma attack that is disabling but requires 
fewer than three days for treatment and recovery to permit the 
employee's return to work). Some commenters felt the three-day rule was 
unreasonably low and trivialized the concept of seriousness, suggesting 
it more appropriately defined a ``health condition'' rather than a 
``serious health condition.''
    Nine commenters (9 to 5, National Association of Working Women; 
Federally Employed Women; Women's Legal Defense Fund; Federal Express; 
Linda Garcia; Kerryn M. Laumer; Epilepsy Foundation of America; 
International Ladies' Garment Workers' Union; Service Employees 
International Union) stated that the three-day rule was contrary to the 
statute and legislative history. The Women's Legal Defense Fund and the 
Epilepsy Foundation of America pointed out that the House Education and 
Labor Committee specifically rejected a minimum durational limit during 
a markup of the bill. These commenters, together with the Consortium 
for Citizens with Disabilities, National Community Mental HealthCare 
Council, and United Cerebral Palsy Associations, contended that 
seriousness and duration do not necessarily correlate, particularly for 
people with disabilities; that a fixed time limit fails to recognize 
that some illnesses and conditions are episodic or acute emergencies 
which may require only brief but essential health care to prevent 
aggravation into a longer term illness or injury, and thus do not 
easily fit into a specified linear time requirement; and that 
establishing arbitrary time lines in the definition only creates 
ambiguity and discriminates against those conditions that do not fit 
the average. The Women's Legal Defense Fund made the observation from 
the legislative history that Congress intended the severity and normal 
length of disabling conditions to be used as ``general tests,'' not 
bright-line rules, and suggested that if a condition is sufficiently 
severe or threatening, duration is irrelevant.
    The 9 to 5, National Association of Working Women, Los Angeles 
County Metropolitan Transportation Authority, Baptist Health Care, St. 
Vincent Medical Center, Chamber of Commerce of the USA, Chicagoland 
Chamber of Commerce, and Service Employees International Union, 
contended that a three-day absence requirement will inevitably result 
in employees with minor short-term afflictions unnecessarily extending 
their absences just to qualify for FMLA leave.
    Fifteen commenters suggested extending the three-day absence 
requirement to a longer period, such as 5, 6, 7, or 10 days (Care 
Providers of Minnesota, Cincinnati Gas & Electric Company, Chicagoland 
Chamber of Commerce, Nevada Power Company, Federal Express, Chevron, 
PARC, Consolidated Edison Company of New York, Inc., Village of 
Schaumburg (Illinois) Human Resources, Food Marketing Institute, 
Society for Human Resource Management, Southwestern Bell Corporation, 
New York State Metropolitan Transportation Authority), two weeks 
(United HealthCare Corporation), or 31 days (the American Apparel 
Manufacturers Association, Inc., suggested that the definition should 
reflect the initial study by the U.S. General Accounting Office that 
estimated FMLA's cost impact, noting further that the three-day rule is 
significantly more lenient than the ``31 days or more of bed rest 
required to remedy the condition'' used by GAO).
    The Ohio Public Employer Relations Association strongly objected to 
the three-calendar-day rule on the grounds that a single workday 
absence on Friday followed by a weekend would qualify (or a Monday 
absence following a weekend). The law firm of Sommer and Barnard stated 
that it was not clear from the regulations or comments in the preamble 
whether the three days are consecutive or non-consecutive calendar days 
of work. The Chamber of Commerce of the USA questioned whether the 
rule, as drafted, could be construed as requiring three cumulative days 
in a calendar year as opposed to three consecutive calendar days.
    Several additional commenters urged that the period be measured by 
business or working days in lieu of calendar days, while still others 
distinguished ``consecutive'' calendar days of absence from 
``consecutive'' work days of absence as alternative suggestions (i.e., 
more than five consecutive work days or seven consecutive calendar 
days). The Hospital Council of Western Pennsylvania argued that the 
standard should be one of incapacity requiring absence from work for 
more than three ``consecutively scheduled workdays,'' as a workday 
standard is compatible with other sick leave and short-term disability 
programs and removes any doubt as to whether an employee was otherwise 
incapacitated and unable to work during days the employee was not 
scheduled to work. Chicagoland Chamber of Commerce commented that, with 
respect to an employee's own serious health condition, the qualifying 
standard pertains to work days and not calendar days, and yet the 
regulatory language would allow one to argue that an inability to carry 
out regular daily activities over the weekend counts toward the 
qualifying period. The Burroughs Wellcome Company emphasized that the 
committee reports clearly state that an employee must be absent from 
work for the required number of days and that absence from ``school or 
other regular daily activities'' [[Page 2193]] relates only to a 
child's, spouse's, or parent's serious health condition.
    The Chamber of Commerce of the USA and the National Association of 
Manufacturers recommended that DOL's definition of serious health 
condition adopt each State's waiting period for qualifying for workers' 
compensation benefits, noting that many States use as much as seven 
work days. As an alternative, the Chamber of Commerce and Consumers 
Power Company (Michigan) suggested that the ADA's definition of 
``disability'' could be used--a mental or physical impairment that 
substantially limits a major life activity. EEOC, which enforces the 
ADA, has advised that ADA ``disability'' and FMLA ``serious health 
condition'' are different, and that they should be analyzed separately.
    Massmutual noted that while the one incentive in FMLA to limit 
employee abuse of FMLA leave was the stipulation that leave is unpaid, 
some companies (like Massmutual) provide fully paid sick leave for 
short-term absences. Thus, for companies with similar programs, there 
is no incentive for employees not to abuse sick leave because they 
would always be paid and could not be disciplined for the abuse due to 
FMLA's employment protections. Massmutual recommended that the 
definition of serious health condition be limited to a period of 
incapacity requiring an absence of at least five working days or to 
those days when an employee is scheduled for actual treatment and/or 
recovery from a treatment.
    The Burroughs Wellcome Company observed that the definition does 
not refer at all to the types of health conditions involved, as does 
the legislative history, but instead focuses only on what the committee 
reports call the ``general test'' of incapacity for more than a few 
days and continuing medical treatment or supervision. Thus, the 
understanding of the test that Congress provided by listing examples of 
conditions that meet the test is lost. The Equal Employment Advisory 
Council recommended that the regulations include as serious health 
conditions all the conditions enumerated in the legislative history 
and, for those not enumerated, apply the general test. Federal Express 
similarly argued that a fixed number of consecutive absences and visits 
to a health care provider do not accurately reflect Congressional 
intent, as colds and flu could be included as ``serious health 
conditions.'' Federal Express recommended the definition focus on the 
seriousness of the illness rather than on an arbitrary time period, and 
that the health conditions listed in the legislative history be used in 
conjunction with the general test in the legislative history for 
determining whether an illness constitutes a serious health condition. 
Chicagoland Chamber of Commerce presented similar views, arguing that 
it is contrary to obvious legislative intent (and grossly over-
inclusive) for the regulation to focus on the extent to which medical 
consultation is sought rather than on the degree of incapacitation.
    Several employers and law firms contended in their comments that 
the definition was too broad and inconsistent with the purpose of the 
Act, in that a common cold (or any particular illness) which 
incapacitates an employee for more than three days and involves two 
visits to a health care provider could be considered within the 
definition of ``serious health condition.'' Giant Food Inc., Kennedy 
Memorial Hospitals, and LaMotte Company recommended clarifications to 
exclude from the definition minor, short-term, remedial or self-
limiting conditions, and normal childhood or adult diseases (e.g., 
colds, flu, ear infections, strep throat, bronchitis, upper respiratory 
infections, sinusitis, rhinitis, allergies, muscle strain, measles, 
even broken bones). Southwestern Bell Corporation likewise requested 
that the regulations distinguish routine illness (measles, chicken pox, 
common ear infections) from serious health conditions by providing a 
sample list of health conditions which are not considered serious 
unless complications arise. Fisher and Phillips stated that pre- 
delivery maternity leave should not be available where the pregnancy 
does not render the employee unable to perform the functions of the 
job. Nevada Power Company recommended excluding: Routine preventive 
physical examinations; illnesses and injuries which require less than 
six visits to a health care provider; conditions relating to 
transvestism, transsexualism, pedophilia, exhibitionism, voyeurism, 
gender disorders, or other sexual behavior disorders, kleptomania, 
pyromania or substance abuse disorders resulting from illegal use of 
drugs; other conditions which are neither life-threatening nor 
prolonged.
    A number of commenters (City of Alexandria (Virginia), Fairfax Area 
Commission on Aging, Federally Employed Women, Northern Virginia Aging 
Network, the Brooklyn and Green Mountain Chapters of the Older Women's 
League, and Sisters of Charity of Nazareth) stated that the definition 
was too restrictive and recommended that it be expanded to specifically 
include chronic illnesses and long-term conditions which may not 
require inpatient care or treatment by a health care provider. The 
University of Vermont suggested that illnesses requiring respite care 
also be included. The LaMotte Company asked whether it would matter if 
an absence for a chronic illness (such as asthma) occurs infrequently--
e.g., would the absences have to be consecutive days or could they be 
one day this week and one the next, or one every month?
    Blue Cross and Blue Shield of Texas, Inc., posed the issue as a 
quandary faced by employees and employers over the lack of definitive 
guidelines as follows: Is there a liability in covering less serious 
illnesses (such as chicken pox or a broken leg) as FMLA leave? If the 
employer does count time toward the 12-week entitlement, can the 
decision be challenged if, later in the year, a more severe condition 
arises and the employee has less than sufficient entitlement remaining?
    Five commenters (Older Women's League, Women's Legal Defense Fund, 
Consortium for Citizens with Disabilities, Epilepsy Foundation of 
America, and United Cerebral Palsy Associations) took issue with the 
provisions in the definition which characterized ``continuing 
treatment'' for a chronic or long-term condition that is ``incurable.'' 
These commenters contended that curability is not a proper test for 
either a serious health condition or for continuing treatment, is 
ambiguous and subject to change over time, and should be deleted, 
noting that many incurable disabilities require continuing treatment 
that has nothing to do with curing the condition. Some pointed out that 
conditions such as epilepsy, traumatic brain injury, and cerebral palsy 
are typically conditions which are not ``curable'' in the generally 
accepted sense, but are conditions for which training and therapy can 
help restore, maintain or develop function or prevent deterioration, 
and noted that people with disabilities have struggled for a generation 
or more to overcome the image that disabilities are, or should be 
viewed as, curable or incurable. United Cerebral Palsy Associations 
noted that cerebral palsy is a term used to describe a group of chronic 
conditions affecting body movement and muscle coordination that are 
neither progressive nor communicable; that it is not a disease and 
should never be referred to as such, although training and therapy and 
assistive technology may help to restore, maintain or increase 
function.
    Several commenters raised additional concerns on various aspects of 
the ``continuing treatment'' definition. The [[Page 2194]] Equal Rights 
Advocates suggested that continuing treatment include situations where 
a serious health condition exists that, if left unattended, would 
result in a hospital stay of more than three days.
    Burroughs Wellcome stated that because the committee reports make 
it clear that ``continuing treatment'' involves absences from work, the 
regulation misses the mark by including one visit to a physician plus 
medication. Sommer and Barnard was concerned that the discussion on 
continuing treatment lacked clarity due to the lack of a clearly 
defined time frame for multiple treatments; further, that a typical 
employer could not determine from the information in the medical 
certification whether a condition is ``so serious that, if not treated, 
it would likely result in a period of incapacity of more than three 
calendar days.'' This application does not call for a medical judgment 
and the ``likely'' standard cannot possibly be administered. Sommer and 
Barnard also stated the regulations lack a meaningful definition of 
what constitutes a regimen of continuing treatment--would it include 
bed rest, home exercise, or instructions to use a non-prescription drug 
or medication? Sesco Management Consultants suggested the definition 
invalidly broadens the concept of continuing treatment by allowing 
``following courses of medication and therapy'' to qualify, which could 
thus include taking aspirin for a few days while staying home, getting 
bed rest and stretching limbs, drinking liquids, etc., which, this 
commenter contends, the Congress did not remotely suggest would qualify 
under FMLA.
    Chicagoland Chamber of Commerce also considered the ``continuing 
supervision'' concept too vague, questioning whether ``supervision'' 
required the individual to actually be examined by the health care 
provider or to report in on some regular basis, or whether instructions 
to report in if the condition changes were sufficient. It considered 
treatment a definitive concept which could be proven, whereas 
``supervision'' could not which would invite abuse and litigation.
    The Food Marketing Institute commented that the Act defines a 
serious health condition to require continuing treatment by a health 
care provider, which necessarily means at least two visits to the 
health care provider. Conditions which result in self-treatment (e.g., 
taking medication) ``under the supervision of'' a doctor are typically 
not serious health conditions as contemplated by the FMLA, according to 
this commenter. Similarly, the Society for Human Resource Management 
recommended that ``continuing treatment'' be redefined so that taking 
medications does not count the same as an office visit.
    The Ohio Public Employer Labor Relations Association noted that 
while stress may contribute to illness in some persons, it is not an 
illness or a medical condition. The commenter recommended that 
treatment for stress without a commonly accepted and recognized medical 
diagnosis should not be included in the definition of a serious health 
condition.
    Ten commenters raised various concerns regarding the availability 
of FMLA leave for treatment for substance abuse. The Epilepsy 
Foundation of America stated that substance abuse programs and mental 
health services must be included in the definition of serious health 
condition. William M. Mercer, Inc., suggested that the preamble 
discussion from the Interim Final Rule on treatment for substance abuse 
should be set forth in the rule itself. Consolidated Edison Company of 
New York, Inc. commented that employees should be allowed FMLA leave 
for substance abuse treatment only if they are not current users of 
illegal drugs, consistent with the approach followed under the ADA's 
protections. Consumers Power Company (Michigan) also recommended 
excluding absences for an employee's illegal use of drugs, and limiting 
FMLA leaves to inpatient substance abuse treatment programs with 
durations of no less than 14, or preferably, 28 days. Nationsbank 
Corporation (Troutman Sanders) suggested the regulations specifically 
state: (1) FMLA does not prohibit discipline for an employee's drug use 
in violation of the employer's policy; (2) an employee may not use FMLA 
to avoid potential discipline or drug testing; and (3) an employee 
returning from FMLA leave for substance abuse may be drug tested as a 
condition of return to work and following return to work, pursuant to 
an employer's post-treatment drug policy. Nevada Power Company 
suggested that an employer should not have to offer more than one leave 
of absence for drug or alcohol rehabilitation; and that employers which 
expend funds to reform substance abusers should be allowed to terminate 
employees if they begin to abuse drugs or alcohol again. Edison 
Electric Institute also suggested employers should only have to provide 
professional rehabilitative service and support to drug abusers one 
time.
    The American Trucking Association, in contrast, advocated 
eliminating substance abuse from the definition of serious health 
condition, because protection of substance abusers jeopardizes efforts 
by the trucking industry and the U.S. Department of Transportation to 
eradicate substance abusers from the nation's highways. Federal Highway 
Administration regulations require trucking companies to conduct 
substance abuse testing, but do not permit a motor carrier to test a 
driver who voluntarily admits to abuse because such an admission, 
without more, fails to trigger the duty to test under any of the five 
categories, in essence enabling the employee to ``beat the system'' by 
triggering FMLA rights before a drug test could be conducted. It was 
unclear to the Association under FMLA whether such an admission would 
preclude a motor carrier's ability to test a driver scheduled for a 
random drug test. The Association recommended changing the regulations 
to either totally exclude substance abuse from the definition of 
serious health condition, or exclude those persons who are subject to 
FHWA drug testing requirements from FMLA protections insofar as those 
protections include treatment for substance abuse. This commenter would 
also support an exclusion limited to those persons in the 
transportation industry subject to federal drug testing requirements, 
and also suggested the regulations make clear that persons currently 
engaged in illegal use of drugs have no FMLA protections, consistent 
with the provisions of the ADA.
    The Chamber of Commerce of the USA recommended clarifications to 
provide that current illegal use of drugs during treatment for illegal 
drug use, or resumption of the illegal use of drugs following 
completion of treatment, removes such treatment from the category of 
``serious health condition'' under FMLA, and that an employee who fails 
a drug test would be subject to the employer's normal disciplinary 
procedures and would not be protected by FMLA.
    Louisiana Health Care Alliance (Phelps Dunbar) suggested that 
clarification be provided to ensure that employers have the continued 
right to enforce legitimate policies for drug- and alcohol-free 
workplaces, by explicitly stating in the regulations that nothing in 
FMLA prohibits an employer from terminating or otherwise disciplining 
an employee pursuant to a legitimate drug testing program.
    The Department has carefully reviewed the comments and re-examined 
the legislative history and the definition of ``serious health 
condition'' in an attempt to assure that it is consistent with 
Congressional intent, and that FMLA leave is available in 
[[Page 2195]] those situations where it is really needed. As a result 
of this review, the regulation has been significantly re-crafted, as 
discussed below.
    As summarized above, comments were submitted opposing any duration 
limit, and equally strong comments suggested the standard was much too 
short. Upon review, the Department has concluded that the ``more than 
three days'' test continues to be appropriate. The legislative history 
specifically provides that conditions lasting only a few days were not 
intended to be included as serious health conditions, because such 
conditions are normally covered by employers' sick leave plans. The 
Department has also concluded that it is not appropriate to change the 
standard to working days rather than calendar days because the severity 
of the illness is better captured by its duration rather than the 
length of time necessary to be absent from work. Furthermore, a working 
days standard would be difficult to apply to serious health conditions 
of family members or to part-time workers. (It is noted that throughout 
the regulations, where a number of days is prescribed, calendar days is 
intended unless the regulation explicitly states business days.) The 
regulation has been revised, however, to make it clear that the absence 
must be a period of incapacity of more than three consecutive calendar 
days. ``Incapacity,'' for purposes of this definition, means inability 
to work, attend school or perform other regular daily activities due to 
the serious health condition, treatment therefor, or recovery 
therefrom. Any subsequent treatment or incapacity relating to the same 
condition would also be included.
    The regulation also retains the concept that continuing treatment 
includes either two visits to a health care provider (or to a provider 
of health care services on referral of a health care provider) or one 
visit followed by a regimen of continuing treatment under supervision 
of the health care provider. Regimen of continuing treatment is 
clarified in paragraph (b) of this section to make it clear that the 
taking of over-the-counter medications, bed-rest, drinking fluids, 
exercises, and other similar activities that can be initiated without a 
visit to a health care provider is not, by itself, sufficient to 
constitute a regimen of continuing treatment for purposes of FMLA 
leave. Prescription drugs or therapy requiring special equipment, for 
example, would be included. It is envisioned that a patient would be 
under continuing supervision in this context, for example, where the 
patient is advised to call if the condition is not improved.
    The Department concurs with the comments that suggested that 
special recognition should be given to chronic conditions. The 
Department recognizes that certain conditions, such as asthma and 
diabetes, continue over an extended period of time (i.e., from several 
months to several years), often without affecting day-to-day ability to 
work or perform other activities but may cause episodic periods of 
incapacity of less than three days. Although persons with such 
underlying conditions generally visit a health care provider 
periodically, when subject to a flare-up or other incapacitating 
episode, staying home and self-treatment are often more effective than 
visiting the health care provider (e.g., the asthma-sufferer who is 
advised to stay home and inside due to the pollen count being too 
high). The definition has, therefore, been revised to include such 
conditions as serious health conditions, even if the individual 
episodes of incapacity are not of more than three days duration. 
Pregnancy is similar to a chronic condition in that the patient is 
periodically visiting a health care provider for prenatal care, but may 
be subject to episodes of severe morning sickness, for example, which 
may not require an absence from work of more than three days. It is 
clear from FMLA's legislative history that pregnancy was intended to be 
treated as a serious health condition entitling an individual to leave 
under the Act, and the definition therefore includes any period of 
incapacity due to pregnancy, or for prenatal care.
    The Department has also included a definition to deal with serious 
health conditions which are not ordinarily incapacitating (at least at 
the current state of the patient's condition), but for which treatments 
are being given because the condition would likely result in a period 
of incapacity of more than three consecutive calendar days in the 
absence of medical intervention or treatment. The regulation requires 
multiple treatments, and includes as examples patients receiving 
chemotherapy or radiation for cancer, dialysis for kidney disease, or 
physical therapy for severe arthritis. Multiple treatments for 
restorative surgery after an accident or other injury is also 
specifically included. The previous requirement that the condition be 
chronic or long-term has been deleted because cancer treatments, for 
example, might not meet that test if immediate intervention occurs.
    The portion of the definition dealing with long-term, chronic 
conditions such as Alzheimer's or a severe stroke has been modified to 
delete the reference to the condition being incurable, and to require 
instead that the condition involve a period of incapacity which is 
permanent or long-term and for which treatment may not be effective. 
Therefore, in this situation, as under the interim final rule, it is 
only necessary that the patient be under the supervision of a health 
care provider, rather than receiving active treatment.
    The Department did not consider it appropriate to include in the 
regulation the ``laundry list'' of serious health conditions listed in 
the legislative history because their inclusion may lead employers to 
recognize only conditions on the list or to second-guess whether a 
condition is equally ``serious'', rather than apply the regulatory 
standard. However, the regulation does provide, as examples, that, 
unless complications arise, the common cold, the flu, earaches, upset 
stomach, minor ulcers, headaches other than migraine, routine dental or 
orthodontia problems, and periodontal disease are not ordinarily 
serious health conditions. In addition, the regulation specifically 
states that routine physicals, eye examinations and dental examinations 
are not considered treatment, although examinations to determine if a 
serious health condition exists and evaluations of the condition are 
considered treatment.
    The regulation has also been revised in paragraph (c) to delete the 
reference to ``voluntary'' treatments for which treatment is not 
medically necessary, and restrict the exclusion to cosmetic treatments 
(unless inpatient care is required or complications develop). The term 
``voluntary'' was considered inappropriate because all treatments and 
surgery are voluntary. Furthermore, the Department did not wish to 
encourage employers to second-guess a health care provider's judgment 
that a treatment is advisable (e.g., orthoscopic knee surgery on an 
out-patient basis) by questioning whether it is ``necessary''.
    The regulation continues to recognize that substance abuse may be a 
serious health condition if the criteria of the regulation are met. 
However, the regulation is revised to make it clear that an absence 
because of the employee's use of the substance, rather than for 
treatment, is not protected. See also Sec. 825.112(g) of the 
regulations, which has been revised to make it clear that an employer 
may take disciplinary action against an employee pursuant to a 
uniformly applied policy regarding substance abuse, provided the action 
is not being taken because the employee has exercised his or her right 
to take FMLA leave.
    In response to the question by Blue Cross and Blue Shield of Texas 
regarding liability in covering less [[Page 2196]] serious illnesses, 
the regulatory procedures in Sec. 825.208 prescribe the method for an 
employer to designate FMLA leave. Under this procedure, an employee has 
an opportunity to counter an employer's designation of leave and 
resolve the dispute. See Sec. 825.208(b).
    As suggested, the reference in the interim final rule to stress as 
a possible serious health condition has been revised to mental illness 
resulting from stress.
Unable To Perform the Functions of the Position (Sec. 825.115)
    An eligible employee may take FMLA leave due to a ``serious health 
condition'' that makes the employee ``unable to perform the functions'' 
of the employee's position. Section 825.115 of the Interim Final Rule 
states that an employee is ``unable to perform the functions of the 
position'' where the health care provider has found the employee either 
unable to work at all, or unable to perform any of the essential 
functions of the position within the meaning of the ADA and its 
implementing regulations (29 CFR Part 1630). For employers that request 
employees to furnish medical certification from the employee's health 
care provider to support the leave request, the regulations provide the 
employer the option of furnishing a statement (list) of the employee's 
essential functions for the health care provider to review when 
certifying to the employee's condition.
    The Women's Legal Defense Fund, California Department of Fair 
Employment and Housing, and Consumers Power Company, Michigan commented 
that this section was unclear as to whether an employee must be found 
unable to perform each and every essential function (i.e., all), or 
only any single one, or some of several of the essential functions. 
Several commenters (Alabama Power Company (Balch & Bingham); Chamber of 
Commerce of the USA; Credit Union National Association, Inc.; National 
Restaurant Association; Society for Human Resource Management; William 
M. Mercer, Inc.) either questioned the effect of ``reasonable 
accommodations'' and ``job restructuring'' or modified ``light duty 
assignments'' on FMLA leave requests, or suggested that the FMLA 
regulations be interpreted to mean ``unable to perform any of the 
essential functions with or without reasonable accommodation within the 
meaning of the ADA.'' Thus, under this latter view, FMLA leave could be 
denied to an employee with a serious health condition who, although 
unable to perform the essential job functions, would be able, despite 
the condition, to perform those functions if offered ``reasonable 
accommodation.'' Some commenters noted the utility of creating ``light 
duty'' assignments for employees who suffer on-the-job injuries, and 
the impact on State workers' compensation benefits which can be 
suspended if an employee refuses to accept a medically-approved ``light 
duty'' assignment. The Consortium for Citizens with Disabilities, 
Epilepsy Foundation of America, and United Cerebral Palsy Associations 
noted a difference in the language in this section of the regulations 
and that of Sec. 825.306(b) (discussing medical certifications) and 
suggested conforming changes so that both sections would be interpreted 
to mean ``any one (or more) of the essential functions'' (not all of 
the essential functions). The EEOC noted once again that the DOL rule 
cited to the entire body of the ADA regulations in the cross-reference 
and suggested refining the cite to the specific ADA rule that defines 
``essential functions'' (29 CFR 1630.2(n)).
    This section was intended to reflect that an employee would be 
considered ``unable to perform the functions of the position'' within 
the meaning of the regulations if the employee could not perform any 
one (or more) of the essential functions of the job held by the 
employee at the time the need for FMLA leave arose, and the final rule 
is so clarified (in Secs. 825.115 and 825.306). EEOC's recommendation 
to cite to the specific ADA rule defining ``essential functions'' has 
also been adopted. The cite has been so revised, to make it clear that 
reasonable accommodation is irrelevant for purposes of FMLA.
    The relationship between FMLA's leave provisions and other laws 
like the ADA and State workers' compensation laws is addressed under 
Title IV of the FMLA and in Subpart G of the FMLA regulations 
(Secs. 825.700-825.702). As will be discussed further in connection 
with Secs. 825.701 and 825.702 below, FMLA entitles an employee to take 
up to 12 weeks of job-protected leave, from the position of employment 
of the employee when the employee gives notice or when leave commences 
(whichever is earlier), for a serious health condition that makes the 
employee unable to perform any one of the essential functions of the 
employee's position (the position held by the employee when the notice 
was given or the leave commenced). FMLA also entitles such an employee 
to be restored to that same position of employment (the one held by the 
employee when notice was given or the leave commenced), or to an 
equivalent position with equivalent employment benefits, pay, and other 
terms and conditions of employment. Under these statutory terms, if an 
employee qualifies under FMLA for job-protected leave, the employee may 
not be forced, before the employee's FMLA job-protected leave 
entitlement has expired, to return to work in a ``light duty'' (i.e., 
an unequal, modified, or restructured) position, instead of continuing 
FMLA leave until the entitlement has been exhausted. To do so would 
violate an employee's job-protected rights to be restored to the same 
or an equivalent position. Furthermore, the circumstances in which an 
employer is permitted to place an employee in an alternative position 
are explicitly addressed in the Act (Sec. 102(b)(2)).
    Regarding the comment that worker's compensation benefits may be 
suspended if an employee refuses a light duty assignment, we do not 
interpret the FMLA as prohibiting that result under applicable State 
workers' compensation statutes. In our view, where an employee is 
injured on the job and the injury also results in a serious health 
condition that makes the employee unable to perform any one of the 
essential functions of the employee's position within the meaning of 
FMLA, the employee effectively qualifies for both workers' compensation 
benefits and job-protected leave under the FMLA. This would mean that, 
in addition to the employee receiving payments from the workers' 
compensation fund for replacement of lost wages, the employer would be 
obligated to maintain (at least until the employee's FMLA leave 
entitlement is exhausted) any of the employee's pre- existing health 
benefits coverage under the same terms and conditions as if the 
employee had continued to work. If, as part of the workers' 
compensation claim process, the employee is offered a medically-
approved ``light duty'' assignment, the employee may decline the 
assignment offer and instead choose to begin or continue to exercise 
FMLA rights and remain on leave for the remaining portion of the 
employee's FMLA leave entitlement. As discussed in Sec. 825.220(d), if 
the employee freely accepts the ``light duty'' assignment offer in lieu 
of FMLA leave or returns to work before exhausting his or her FMLA 
leave entitlement, the employee would retain his or her right to the 
original or an equivalent position until 12 weeks have passed, 
including all FMLA leave taken that year. At the conclusion of the 12-
week period, if the employee is not able to perform the essential 
functions of the original [[Page 2197]] position, the employee's right 
to restoration ceases. The relationship between State workers' 
compensation laws and FMLA will be discussed in further detail in 
connection with Sec. 825.702.
    It should be noted that FMLA does not modify or affect any law 
prohibiting discrimination on the basis of disability, such as the ADA. 
Thus, if a ``qualified individual with a disability'' within the 
meaning of the ADA is also an ``eligible employee'' entitled to take 
FMLA leave, an employer has multiple compliance obligations under both 
the ADA and the FMLA. When one of these laws offers a superior right to 
an employee on a particular issue, the employer must provide that 
superior right to the employee. These issues will be discussed in 
further detail in connection with Sec. 825.702.
    This section is also revised to make it clear, as stated in the 
legislative history and in the preamble to the Interim Final Rule, an 
employee who is absent to receive medical treatment for a serious 
health condition is unable to perform the essential functions of the 
employee's job while absent for treatment.
Needed To Care for a Family Member (Sec. 825.116)
    An eligible employee may take FMLA leave ``in order to care for'' 
an immediate family member (spouse, son, daughter, or parent) with a 
serious health condition. This section, in discussing what was meant by 
``needed to care for'' a family member, provided that both physical and 
psychological care or comfort were contemplated under this provision of 
FMLA. Giant Food, Inc. recommended that a distinction be made between 
physical and psychological care and supervisory care, suggesting also 
that reasonable efforts should be made by employees to develop 
alternate day care plans in the event of a childhood illness to lessen 
the impact that excessive absenteeism can have on an employer's 
operations. The Ohio Public Employer Labor Relations Association 
objected to allowing FMLA leave solely to provide psychological comfort 
for a family member rather than actual physical assistance and care, 
and suggested that employers should have discretion to consider whether 
other care is being provided to the family member through health-care 
services as well as other family members. The Women's Legal Defense 
Fund, Consortium for Citizens with Disabilities, Epilepsy Foundation of 
America, National Community Mental Healthcare Council, and United 
Cerebral Palsy Associations objected to the reference to individuals 
``receiving inpatient care'' in paragraph (a), because many individuals 
are in other situations, such as in the home, which require this type 
of care and assistance from family members. Several of these commenters 
also objected to use of the phrase ``seriously-ill'' as too limiting 
and recommended replacing it with the statutory term ``serious health 
condition'' for consistency with other sections of the regulations. 
Some of these commenters, in addition to the Food and Allied Service 
Trades, also recommended that ``spouse'' be added to the list of family 
members in this section.
    The final rule has been revised to add ``spouse'' to the last 
sentence of paragraph (a), to delete ``inpatient care,'' and to replace 
``seriously-ill'' with ``serious health condition.'' No further changes 
have been made in response to the remaining comments. The legislative 
history clearly reflects the intent of the Congress that providing 
psychological care and comfort to family members with serious health 
conditions would be a legitimate use of FMLA's leave entitlement 
provisions. Because FMLA grants to eligible employees the absolute 
right to take FMLA leave for qualifying reasons under the law, 
employers have no discretion in this area and cannot deny the 
legitimate use of FMLA leave for such purposes without violating the 
prohibited acts section of the statute. See Sec. 105 of FMLA.
Medical Need for Intermittent/Reduced Schedule Leave (Sec. 825.117)
    FMLA permits eligible employees to take leave ``intermittently or 
on a reduced leave schedule'' under certain conditions. Intermittent 
leave may be taken for the birth of a child (and to care for such 
child) and for the placement of a child for adoption or foster care if 
the employer and employee agree to such a schedule. Leave for a serious 
health condition (either the employee's or family member's) may be 
taken intermittently or on a reduced leave schedule when ``medically 
necessary'' (Sec. 102(b)(1) of FMLA). An employer may request that an 
employee support an intermittent leave request for a serious health 
condition with certification from the health care provider of the 
employee or family member of the medical necessity of the intermittent 
leave schedule and its expected duration. Employees must make a 
reasonable effort to schedule their intermittent leave that is 
foreseeable based on planned medical treatments so as not to unduly 
disrupt the employer's operations (subject to the approval of the 
health care provider), and employers may assign employees temporarily 
to alternative positions with equivalent pay and benefits that better 
accommodate such recurring periods of intermittent leave. (See also 
Sec. 825.203.)
    The Employee Assistance Professional Association, Inc. commented 
that no rationale was provided for why intermittent leave or reduced 
leave schedules are not available to an employee seeking to take leave 
to care for a family member. Intermittent leave to care for an 
immediate family member is allowed, as discussed in Sec. 825.116.
    The Women's Legal Defense Fund recommended that the regulations 
state explicitly that the determination of medical necessity for 
intermittent or reduced leave schedules is made only by the health care 
provider of the employee, in consultation with the employee. The 
Department's medical certification form, as discussed in Sec. 825.306, 
is the vehicle for obtaining certification of the medical necessity of 
intermittent leave or leave on a reduced leave schedule, and such 
determinations are made exclusively by the health care provider of the 
employee or employee's family member (subject to an employer's right to 
request a second opinion at its own expense if it has reason to doubt 
the validity of the certification provided).
    HCMF (long term care facilities) questioned what reasonable efforts 
are required by employees to consult with the employer and attempt to 
schedule intermittent leave so as not to unduly disrupt the employer's 
operations. Cincinnati Gas & Electric Company suggested that it would 
be reasonable for an employer to request that an employee attempt to 
schedule planned medical treatment outside normal work hours. The Equal 
Employment Advisory Council recommended the rules state that an 
employer may deny intermittent or reduced leave schedules when the 
reason for the leave can be accommodated during non-work hours, because 
the need for leave in such circumstances is not ``medically 
necessary.'' Gray, Harris & Robinson asked what would constitute an 
undue disruption, if it were analogous to ADA's ``undue hardship'' 
standard, and to what extent could an employer deny the leave. The 
Chamber of Commerce of the USA also recommended clarifications in the 
rules of the impact of an employee's failure to satisfy the obligation 
to avoid disruptions to the employer's operations.
    As discussed in Secs. 825.302 (e) and (f), the employee and 
employer should attempt to work out a schedule which meets the 
employee's FMLA leave needs without unduly disrupting the employer's 
operations. The ultimate [[Page 2198]] resolution of the leave 
schedule, however, always remains subject to the approval of the health 
care provider and the schedule established for the planned medical 
treatments. It should be noted that under this section, the health care 
provider either already has, or will, establish the medical necessity 
for the intermittent leave schedule; it is a prerequisite for the 
leave. Thus, denial of the leave would be out of the question. Even 
delay of the leave would be inappropriate unless the health care 
provider agreed to reschedule the medical treatments. What would be a 
``reasonable effort'' by the employee and an ``undue disruption'' of 
the employer's operations are fact-specific in each case. Requesting 
that an employee attempt to schedule planned medical treatments outside 
the normal work hours when scheduling them during work hours would not 
unduly disrupt the employer's operations would not be ``reasonable'' or 
consistent with FMLA's requirements.
Definition of ``Health Care Provider'' (Sec. 825.118)
    FMLA entitles eligible employees to take leave for a serious health 
condition (of either the employee or an immediate family member). 
``Serious health condition'' is defined to include an injury, illness, 
impairment, or physical or mental condition involving either inpatient 
care or ``continuing treatment by a health care provider.'' In 
addition, FMLA's medical certification provisions allow an employer to 
request that leave for a serious health condition ``* * * be supported 
by a certification issued by the health care provider * * *'' of the 
employee or family member. Section 101(6) of the Act defines ``health 
care provider'' as a doctor of medicine or osteopathy authorized in the 
State to practice medicine or surgery (as appropriate) or ``any other 
person determined by the Secretary [of Labor] to be capable of 
providing health care services.''
    After reviewing definitions under several programs, including rules 
of the U.S. Office of Personnel Management and Medicare, DOL developed 
FMLA's regulatory definition of ``health care provider'' by beginning 
with the definition of ``physician'' under the Federal Employees' 
Compensation Act (5 U.S.C. 8101(2)), which also includes podiatrists, 
dentists, clinical psychologists, optometrists, and chiropractors 
(limited to treatment consisting of manual manipulation of the spine to 
correct a subluxation as demonstrated by X-ray to exist) authorized to 
practice in the State and performing within the scope of their practice 
as defined under State law, and by adding nurse practitioners and 
nurse-midwives (who provide diagnosis and treatment of certain 
conditions, especially at health maintenance organizations and in rural 
areas where other health care providers may not be available) if 
performing within the scope of their practice as allowed by State law. 
Finally, the definition included Christian Science Practitioners to 
reflect the Congressional intent that such practitioners be included 
(as expressed in colloquies on the floors of both the House and Senate, 
and as reflected in the Committee report accompanying Title II of FMLA 
applicable to Federal civil service employees).
    Fifty-seven commenters submitted views on the regulatory definition 
of ``health care provider.'' Most advocacy groups and various trade and 
professional associations viewed the definition as too restrictive and 
suggested that it be expanded to include a broad range of additional 
providers of health care and related services.
    Federally Employed Women and the Women's Legal Defense Fund noted 
that OPM's definition for Federal civil service employees under Title 
II of FMLA includes those providers recognized by the Federal 
Employee's Health Benefits Program, and suggested a similar approach be 
used by DOL for Title I. They contended that including any providers 
covered by the employers health insurance plan avoids confusion as to 
whether the services would be reimbursed and ensures ease of 
administration.
    Alabama Power Company (Balch & Bingham) considered the definition 
as written too broad and suggested DOL follow the lead of the States 
with FMLA-type laws, confining the definition to doctors and 
osteopaths. The ERISA Industry Committee felt that employers should not 
be required to recognize service providers not recognized by their 
health plans. Burroughs Wellcome Company suggested that Christian 
Science Practitioners not be included.
    The American Association for Marriage and Family Therapy, 14 State 
Associations for Marriage and Family Therapy, Teton Youth & Family 
Services, and the Women's Legal Defense Fund suggested that marriage 
and family therapists be included in the definition. Fourteen 
organizations (American Board of Examiners in Clinical Social Work; 
California Society for Clinical Social Work; Catholic Charities, Inc.; 
Council on Social Work Education; the Maryland, Mississippi, New 
Hampshire, New York State, Ohio, Rhode Island, Texas and Utah Chapters 
of the National Association of Social Workers; Women's Legal Defense 
Fund; and 9 to 5, National Association of Working Women), the Personnel 
Department of the City of Newport News, and five Members of Congress 
recommended that ``clinical social workers'' be added to the definition 
of ``health care providers.'' In addition, 436 cards/letters (generally 
uniform in style and content) were received from practicing social 
workers also urging that ``clinical social workers'' be added.
    The Consortium for Citizens with Disabilities, Epilepsy Foundation 
of America, and United Cerebral Palsy Associations suggested that the 
regulations include providers of specialized health-related services 
for the disabled, health care providers licensed by States or 
accredited by national certification organizations, a non-exclusive 
list of types of providers (whether or not licensed or accredited), and 
a procedure for applying to DOL to add ``emerging'' health care 
provider services. The Service Employees International Union also 
supported flexibility in the regulations to include other types of 
providers of services as new roles evolve with changes in the health 
care system.
    The American Academy of Physician Assistants, Community Legal 
Services, Inc., Equal Rights Advocates, Hospital Council of Western 
Pennsylvania, 9 to 5, National Association of Working Women, and Older 
Women's League recommended that physician assistants be included. The 
National Acupuncture and Oriental Medicine Alliance recommended 
including Acupuncturists and Oriental Medicine Practitioners. Employee 
Assistance Professional Association, Inc. recommended that Certified 
Employee Assistance Professionals be recognized as ``providers'' 
capable of making determinations of whether an employee is able to work 
or unable to return to work.
    The American Chiropractic Association and William M. Mercer, Inc. 
objected to the parenthetical phrase concerning chiropractors that 
limited treatment to manual manipulation of the spine to correct a 
subluxation demonstrated by X-ray to exist. The American Psychological 
Association recommended replacing ``clinical psychologist'' with 
``doctorally trained psychologist whose scope of competence includes 
clinical activities.''
    The American Psychiatric Association suggested that a distinction 
should be maintained between doctors of medicine or osteopathy and non- 
[[Page 2199]] physician health care professionals, and that 
certification for intermittent or reduced leave schedules should be 
accepted only from doctors of medicine or osteopathy, not non-physician 
health care providers. The Consortium for Citizens with Disabilities, 
on the other hand, suggested that the medical certification form be 
revised so that it does not appear that only a medical doctor or 
osteopath can sign off on the form.
    California Rural Legal Assistance, Inc., Equal Rights Advocates, 
and William M. Mercer, Inc. recommended that foreign-certified or 
foreign-licensed health care providers should be recognized under FMLA, 
to account for the fact that many workers' parents, spouses or children 
do not reside in the U.S. or that such family members may become ill 
while abroad. (California Rural Legal Assistance, Inc. stated that many 
U.S. residents rely on Mexican doctors for health care.)
    The law firm of Fisher & Phillips recommended that DOL delay 
exercising its authority to designate health care providers until there 
is an opportunity to determine the impact on the President's health 
care proposal.
    After giving careful consideration to the numerous suggestions for 
changes in the definition of ``health care provider,'' we have revised 
the final rule in the following respects. The definition will be 
expanded to include any health care provider that is recognized by the 
employer or accepted by the group health plan (or equivalent program) 
of the employer. To the extent that the employers or the employers' 
group health plans recognize any such individuals for certification of 
the existence of a health condition to substantiate a claim for health 
care and related services that are provided, they would be included in 
the revised definition of ``health care provider'' for purposes of 
FMLA. Clinical social workers will also be included because our review 
reveals that they are ordinarily authorized to diagnose and treat 
without supervision under State law. Physician's assistants are not 
included as health care providers under the regulations because they 
are ordinarily only permitted to practice under a doctor's supervision. 
An employee, however, may receive treatment by a physician's assistant 
or other health care professional under the supervision of a doctor or 
other health care provider without first seeing the health care 
provider and obtaining a referral. In addition, any services recognized 
by the plan which are furnished as a result of a referral while under 
the continuing supervision of a health care provider would qualify as 
medical treatment for purposes of FMLA leave (see 
Sec. 825.114(c)(2)(i)(A)).

II. Subpart B, Secs. 825.200-825.220

Amount of Leave (Sec. 825.200)
    Employers must choose from among four options a single uniform 
method for calculating the 12-month period for determining ``12 
workweeks of leave during any 12-month period.'' The choice of options 
was intended to give maximum flexibility for ease in administering FMLA 
in conjunction with other ongoing employer leave plans, given that some 
employers establish a ``leave year'' and because of State laws that may 
require a particular result.
    The California Department of Fair Employment and Housing 
recommended this section include cautionary advice to employers that 
the availability of options may be limited by State law (the California 
Family Rights Act starts the 12-month period with the date the employee 
first uses qualifying leave). William M. Mercer, Inc. questioned 
whether State family leave laws would control the employer's 
administration of FMLA, and also whether leave accrues under the 
backward rolling method on a daily basis. The State of New York's 
Department of Civil Service and the State of Nevada's Department of 
Personnel recommended that each agency or department within a State 
government be allowed to select a separate (i.e., different) 12-month 
period.
    The State of South Carolina's Division of Human Resource 
Management, the State of South Dakota's Bureau of Personnel, and the 
Edison Electric Institute recommended provisions be added to limit the 
amount of FMLA leave available to an employee for the birth or adoption 
of a child to a single 12-week period per event (e.g., under the 
calendar year method, an employee who adopts or gives birth to a child 
late in the year would not be entitled to take additional leave in the 
second calendar year period because of the adoption or birth of that 
child). Similarly, Cincinnati Gas and Electric Company recommended the 
final rules prohibit an employee from receiving 24 weeks of protected 
leave for a single FMLA-covered event (e.g., where the initial 12-week 
absence ends at the same time the next annual 12-week allotment 
begins). (See also the discussion of similar comments received on the 
section that follows, Sec. 825.201.)
    The Women's Legal Defense Fund recommended that DOL explicitly 
define the method rather than allowing employer choices, to prevent 
manipulation, and suggested the period be calculated as the 12-month 
period following commencement of an employee's first FMLA leave 
(Sec. 825.200(b)(3)). If choices are allowed, they urge that the 12-
month period rolling backward method (paragraph (b)(4)) be rejected 
because it curbs employee flexibility and is confusing to them. The 
American Federation of Teachers/National Education Association 
concurred with WLDF's comments. The AFL-CIO and Service Employees 
International Union submitted similar views. (SEIU also suggested 
clarifying that employers may not switch methods to deny employees 
leave, and that such action would violate FMLA's anti-interference 
provisions.) The United Paperworkers International Union suggested that 
the 12-month period be calculated by using each individual employee's 
anniversary date, as employees are not eligible until they have worked 
for at least 12 months, and this would prevent employers from 
manipulating the 12-month period to avoid FMLA obligations.
    Fisher & Phillips suggested that the regulations refer to the 12-
month ``rolling period'' as the default method for employers that have 
not designated a 12-month period.
    The Society for Human Resource Management questioned whether the 
12-week entitlement was for each separate reason specified under FMLA 
(12 weeks for childbirth, plus 12 weeks for a sick parent, plus 12 
weeks for the employee's serious health condition, etc., all in the 
same 12-month period), or for all reasons (total for all events in a 
12-month period limited to 12 weeks). This commenter also questioned 
whether an employer must allow an employee to return to work early in 
the situation where the employee requested 12 weeks of leave and, three 
weeks into the leave, the employee asks to return to work.
    Black, McCuskey, Sourers & Arbaugh stated that employees of 
employers who selected the calendar year should be entitled to only 
five weeks of FMLA leave for the period between August 5, 1993, and 
December 31, 1993. The Department cannot agree with this line of 
reasoning, which would suggest that employees of employers who select 
the calendar year would be entitled to less leave other employees. Nor 
do we believe that Congress intended that an employee be entitled to 
one week of leave for each remaining month of the year after 
eligibility is established.
    The final rule has been clarified in response to several of the 
comments [[Page 2200]] received. The rule notes that an employer may be 
unable to choose one method from among the available regulatory options 
if a particular method is dictated by a State family leave law. In this 
regard, employers operating in multiple States with differing State 
family/medical leave provisions affecting the 12-month calculation must 
follow the method required by the State laws. Absent a conflict with 
State law, employers must select a single, uniform policy covering its 
entire workforce. Employers must inform employees of the applicable 
method for determining FMLA leave entitlement when informing employees 
of their FMLA rights. If an employer fails to designate one of the 
methods, employees will be allowed to calculate their leave entitlement 
under whichever method is most beneficial to them. The employer in that 
case would subsequently be able to designate a choice prospectively, 
but would have to follow the rule for employers wishing to change to 
another alternative (i.e., give 60 days notice to all employees, and 
employees retain the full benefit of 12 weeks of leave under whichever 
method yields the greatest benefit to employees during the 60-day 
transition period).
    When determining the amount of FMLA leave taken, a holiday 
occurring within a week of FMLA leave has no effect--the week is still 
counted as a week of FMLA leave. If however, the employer's activities 
temporarily cease for one or more weeks and employees generally are not 
expected to report for work (e.g., a school that closes two weeks for 
the Christmas and New Year holiday or for the summer vacation; a plant 
that closes two weeks for repairs or retooling), the days on which the 
employer's activities have ceased do not count against an employee's 
FMLA leave entitlement.
    The ``rolling backward'' method is a snapshot of the 12-month 
period that changes daily (i.e., as each new day is added to the 12-
month period, one day from 12-months ago is eliminated). While many 
comments were received opposing this method, it has been retained as 
one of the available options because it is the one method that most 
literally tracks the statutory language.
    Once the 12-month period is determined, an employee's FMLA leave 
entitlement is limited to a total of up to 12 workweeks of leave in 
that 12-month period for any and all reasons that qualify for taking 
leave under FMLA. If an employer selects the calendar year as the 12-
month period, there is no authority under the statutory language to 
limit an employee's entitlement to a ``per event'' concept. (This would 
be akin to saying that if an employee under the calendar year method 
suffered a heart attack in the month of December, that employee would 
no longer qualify, once the new year arrived, to take FMLA leave for 
that serious health condition. We ardently reject this strained 
interpretation.) The only limitation the Act places on an employee's 
taking FMLA leave in a subsequent 12-month period to care for a newborn 
or newly-adopted child is that the entitlement to leave for such 
purposes expires 12 months after the date of the birth or placement.
    If an employee begins a requested 12-week leave of absence and, 
three weeks into the leave, asks to return to work earlier than 
originally planned, the employer is obligated to promptly restore the 
employee. An employee may only take FMLA leave for reasons that qualify 
under the Act, and may not be required to take more leave than is 
necessary to respond to the need for FMLA leave. If circumstances 
change and the employee no longer has a need for FMLA leave (which 
could include a parent's changed decision not to stay home with a 
newborn child as long as originally planned), the employee's FMLA leave 
is concluded and the employee has an absolute right under the law to be 
promptly restored to his or her original or an equivalent position of 
employment. This view does not mean that employees do not also have 
obligations to provide notice to the employer of such changing 
circumstances. If an employee's status changes and the employee is able 
to return to work earlier than anticipated, the employee should give 
the employer reasonable advance notice, generally at least two working 
days. This is addressed in Sec. 825.309(c). An employer may also obtain 
such information through periodic status reports on the employee's 
intent to return to work.
Conclusion of Leave for Birth or Adoption (Sec. 825.201)
    Under Sec. 102(a)(2) of FMLA, an employee's entitlement to leave 
for a birth or placement of a son or daughter ``shall expire at the end 
of the 12-month period beginning on the date of such birth or 
placement'' (emphasis added). This section of the regulations repeated 
the statutory terms with the added qualifications that State law may 
require, or an employer may permit, a longer period; any such FMLA 
leave, however, must be concluded within this statutory 12-month 
period.
    The Los Angeles County Metropolitan Transportation Authority 
recommended this section be revised to state clearly that leave for the 
birth of a child, or placement of a child with the employee for 
adoption or foster care, must be initiated and completed within 12 
months after the birth or placement. Nationsbank Corporation (Troutman 
Sanders) stated that the termination date for an employee's entitlement 
to leave under this section should occur 12 months after the first FMLA 
leave is taken in connection with the event, rather than 12 months 
after the date of birth or placement, suggesting this approach would be 
more consistent with other regulatory provisions allowing such leave to 
begin before the actual date of birth or placement. (Otherwise, they 
suggest, the 12 weeks of leave could be spread over a period greater 
than the 12-month period provided by FMLA's requirements.)
    The Employers Association of New Jersey questioned whether a 
provision under the New Jersey law that requires leave to commence (but 
it need not conclude) within one year of the date of birth would 
prevail over the FMLA.
    The Women's Legal Defense Fund considered the language in this 
section of the regulations too restrictive, suggesting it removes 
scheduling flexibility for employees. WLDF suggested replacing 
``concluded'' with ``begun'' (which, thus, would read like the New 
Jersey law cited above).
    The Chamber of Commerce of the USA suggested modifications that 
would limit an employee's leave entitlement to a single 12-week period 
for the birth or placement of a child, to make it clear that an 
employee is not entitled to ``stack'' leave periods in connection with 
a single birth or placement. The Association of Washington Cities 
expressed similar views.
    Our review of the statute and its legislative history in the 
context of the comments received has confirmed our initial views on 
this section. The statute clearly states that the entitlement to leave 
expires at the end of one year following the date of birth or placement 
of the child. Thus, the leave must be concluded (i.e., completed) 
within the statutory entitlement period. There is no authority to 
provide by regulation that the leave need only begin within the 
statutory 12-month period. If a State provision (as is the case in New 
Jersey) allows for a longer or more generous period, the more generous 
State provision would prevail but such leave beyond what FMLA requires 
would not count as FMLA leave (see Sec. 401(b) of FMLA, discussed below 
in connection with Sec. 825.701 of the regulations). There is no 
authority to shorten the statutory 12-month period under the 
regulations where an employee begins leave for the [[Page 2201]] birth 
or placement prior to the actual birth of placement. Nor is there 
authority to limit an employee's entitlement to a ``per event'' 
standard.
Limitation for Spouses Employed by the Same Employer (Sec. 825.202)
    Section 102(f) of FMLA specifically limits the total aggregate 
number of workweeks of leave to which an ``eligible'' husband and wife 
are both entitled if they work for the same employer to 12 workweeks of 
leave (combined between the two spouses) if the leave is taken for: (1) 
the birth of a child; (2) the placement of a child for adoption or 
foster care; or (3) to care for a sick parent. The regulations 
specified which FMLA-covered purposes for taking leave were subject to 
the special limitation, and gave examples of how the limitation would 
apply when leave taken during the 12-month period is for both a reason 
subject to the limitation and one that is not (leave for an employee's 
own serious health condition, and ``family'' leave if it is for care of 
a spouse, son, or daughter, is not subject to the statutory 
limitation).
    Twelve comments were received on this section. Many commenters 
misunderstood the relationship under the statute between leave taken 
for a reason subject to the combined limit of 12 weeks, and leave taken 
for reasons not within the limitation. Several commenters took issue 
with the reasoning for limiting leave entitlements for spouses employed 
by the same employer. Two individuals opposed the limitations as being 
discriminatory against spouses.
    Martin, Pringle, Oliver, Wallace & Swartz and the Virginia Maryland 
Delaware Association of Electric Cooperatives both noted that the 
regulations provide no guidance in connection with siblings employed by 
the same employer. The Society for Human Resource Management noted that 
two employees living together but not legally married can each take 12 
weeks for the birth or placement of a child, and recommended revising 
the regulations to provide that the 12-week-total limitation would also 
apply where both parents of a child work for the same employer. The 
Ohio Public Employer Labor Relations Association felt that employers 
should be able to limit the leave of spouses for the care of a 
seriously-ill child for the same reason spouses are limited for the 
birth or adoption of a child. George Washington University felt that 
care for a seriously-ill parent should entitle each spouse to 12 weeks 
of FMLA leave. Because FMLA does not cover care of a parent in-law, the 
Women Employed Institute felt that both the husband and wife should be 
entitled to 12 weeks of leave in order to care for their own parent, 
just as they are entitled to 12 weeks of leave for their own illness.
    Fisher & Phillips noted that when a female employee takes leave for 
the birth of a child, the leave may have a dual purpose under FMLA. One 
purpose relates to the employee's own serious health condition for 
childbirth and recovery (Sec. 102(a)(1)(D) of FMLA). The other relates 
to the birth and care of a newborn child (Sec. 102(a)(1)(A) of FMLA). 
They recommended revising the rule to state that such ``dual purpose'' 
leave would always be treated as being subject to the limitation for 
purposes of the husband taking FMLA leave. Fisher & Phillips suggested 
further that the reference in the Act to ``parent'' must be an error, 
that the word ``child'' must have been intended (recommending such a 
revision be made through regulatory interpretation).
    According to the legislative history, the limitation on leave taken 
by spouses who work for same employer is intended to eliminate any 
employer incentive to refuse to hire married couples. It is our view 
that the statutory provisions must be interpreted literally, and we do 
not agree that the legislative result is an error that should be 
altered by regulation. DOL lacks the authority to either add to, or 
subtract from, the circumstances that are subject to the statutory 
limitation of spouses who work for the same employer. The examples 
given in the regulation have been clarified in an effort to reduce the 
confusion that is apparent from the comments received on this section 
of the regulations. With respect to the comment by Fisher & Phillips on 
``dual purpose'' leave, FMLA lacks any `` dual purpose'' concept. 
Further, the statutory limitation must be applied literally, and only 
to leave that is taken for a purpose that is expressly subject to the 
limitation. Clearly there is a period of disability following the birth 
of a child, as explicitly recognized under State pregnancy disability 
laws. Disability leave recognized under such State laws for the birth 
of a child would also be considered FMLA leave for a serious health 
condition. Such leave, for one's own serious health condition, is not 
subject to the limitation for spouses who work for the same employer. 
Nor does the limitation apply to unmarried parents or to siblings 
employed by the same employer. The regulations have been clarified in 
response to the comments received.
Intermittent and Reduced Leave Schedules (Sec. 825.203)
    FMLA permits eligible employees to take leave ``intermittently or 
on a reduced leave schedule'' under certain conditions. Intermittent 
leave is not available for the birth or adoption of a child unless the 
employee and employer agree otherwise. Subject to compliance with 
FMLA's ``notice'' and medical certification provisions, and the right 
of an employer to transfer an employee temporarily to an alternative 
position with equivalent pay and benefits that better accommodates 
recurring periods of leave, leave for a serious health condition 
(either the employee's or family member's) may be taken intermittently 
or on a reduced leave schedule when medically necessary.
    The Women's Legal Defense Fund and the Service Employees 
International Union commented that intermittent leave should be 
permitted to accomplish a placement for adoption or for foster care 
prior to the actual placement without requiring the agreement of the 
employer. Section 825.112(d) of the Interim Final Rule provides for the 
taking of FMLA leave for purposes of adoption or foster care prior to 
the actual placement in situations when the employee may be required to 
attend counselling sessions, appear in court, etc. Unlike the 
circumstances in Sec. 825.112(c) which provide for an expectant mother 
to take leave prior to the birth of a child for prenatal care or for 
her own condition, both of which are specifically identified as being a 
serious health condition, placement for adoption or foster care is not 
so identified. To provide intermittent leave without the employer's 
agreement prior to the actual placement would be contrary to the 
language contained in Sec. 102(b)(1) of the statute, ``In General--
Leave under subparagraph (A) (birth of a child) or (B) (placement for 
adoption of foster care) of subsection (a)(1) shall not be taken by an 
employee intermittently or on a reduced leave schedule unless the 
employee and the employer of the employee agree otherwise.'' We are 
unable to make the suggested change in the Final Rule.
    Fifteen commenters, including public employers, public utilities, 
educators, health care industry employers and manufacturers urged that 
the taking of intermittent leave in increments of one hour or less was 
too burdensome. Many recommended that leave taken intermittently should 
be limited to half-days (four hours) or full days as a minimum. The 
legislative history provides that only the time actually taken is 
charged against the employee's [[Page 2202]] entitlement (Senate 
Committee on Labor and Human Resources (S. 5), Report 103-3, January 
27, 1993, pp. 27 & 29). Otherwise, the statute and the legislative 
history are silent regarding increments of time related to intermittent 
leave. In providing guidance on this issue in the Interim Final Rule, 
it seemed appropriate to relate the increments of leave to the 
employer's own recordkeeping system in accounting for other forms of 
leave or absences. Section 825.203(d) tracks that decision and provides 
that the employer's established recordkeeping system controls with 
regard to increments of FMLA leave of less than one hour. (The employer 
may not require leave to be taken in increments of more than one hour.) 
The guidance in the Interim Final Rule continues to be appropriate; 
otherwise employees could be required to take leave in amounts greater 
than necessary, thereby eroding the 12-week leave entitlement 
unnecessarily. The Final Rule will contain the same guidance; however, 
this section will be clarified to provide explicitly that the phrase 
``one hour or less'' is dispositive.
    Five commenters expressed concern that an employee taking 
intermittent leave could spread the 12-week leave entitlement over an 
extended period, up to the full 12 month leave period. The Equal 
Employment Advisory Council suggests that the amount of intermittent 
leave available be limited to four weeks of the 12 week total available 
in any 12 months. The Kennedy Memorial Hospitals suggests that a limit 
of six months be placed on the period over which intermittent leave can 
be extended. The Koehler Manufacturing Company suggests that employees 
requesting intermittent leave should be eligible for a shorter time 
period. Care Providers of Minnesota point out there is no statutory 
prohibition for reasonably limiting the period of time for intermittent 
leave.
    The statute makes no provision for limiting the time period over 
which an employee may take leave intermittently or on a reduced leave 
schedule. To the contrary, Sec. 102(b)(1) of the statute provides that 
the taking of such leave ``* * * shall not result in a reduction in the 
total amount of leave to which the employee is entitled under 
subsection (a) beyond the amount of leave actually taken.'' After due 
consideration, the Department finds that making such a change would be 
contrary to the statute and the intent of Congress.
    Blue Cross and Blue Shield of Texas, Inc. asks if due to a medical 
certification an employee is limited to working eight hours per day, 
and thus is unable to work mandatory overtime hours, may the employee 
be subject to disciplinary action or may the employer charge the 
unworked overtime to the employee's FMLA leave entitlement. The 
question to be answered would be whether the employer's policy requires 
the taking of other forms of leave (i.e., vacation or sick leave) to 
cover unworked overtime. The taking of FMLA leave is predicated on the 
employee's normal workweek (see Sec. 825.205 of the Interim Final 
Rule). The definition of reduced leave schedule in Sec. 101(9) of the 
statute speaks of usual number of hours per workweek, or hours per 
workday (emphasis added). If the employee's usual or normal workweek is 
greater than 40 hours or workday is greater than eight hours, the days 
or hours the employee does not work may be charged against the FMLA 
leave entitlement if the absence is for an FMLA qualifying reason. If, 
however, the overtime is assigned/required on an ``as needed'' basis, 
not a part of the employee's usual or normal work time, or is 
voluntary, the unworked overtime may not be charged to the employee's 
FMLA leave entitlement. The employee is not subject to disciplinary 
action for being unable to work overtime as a result of limitations 
contained in a medical certification obtained for purposes of FMLA.
    The law firm of Sommer and Barnard urges that an employee be 
required to furnish evidence satisfactory to the employer that periods 
of intermittent leave requested for birth or placement of a child 
before the actual birth or placement will be used for the required 
reason, and that all the leave requested/approved will be devoted to 
the purposes for which the employee was eligible for such leave. The 
Final Rule has been amended in Sec. 825.113(d) to permit an employer to 
require reasonable documentation of a family relationship for purposes 
of FMLA leave. It would be unreasonable, however, to expect an employee 
to predict with any precision the amount of leave that will be required 
in conjunction with a birth or placement when time spent in these 
activities is largely outside the employee's control (e.g., attorneys, 
doctors, the courts, social workers, etc.). The possibility, moreover, 
that employees would lie to their employer and not use leave for the 
purposes indicated is not unique to leave taken prior to the birth or 
placement for adoption or foster care. Such fraud should be treated 
like any other fraud in connection with leave. See also 
Sec. 825.312(g). In any event, employer permission is required for an 
employee to take intermittent FMLA leave for birth (other than 
medically-necessary leave) or placement for adoption or foster care. 
Consequently, the suggested change will not be made.
    Massmutual Life Insurance Company recommends that reduced schedule 
leave and intermittent leave for personal medical leave should be 
limited solely to those times which are scheduled for treatment, 
recovery from treatment or recovery from illness. The definition of 
leave which may be taken intermittently or on a reduced leave schedule 
basis for an employee's own serious condition or the serious health 
condition of an immediate family member has been changed in 
Sec. 825.203 of the Final Rule to incorporate this suggestion. The 
employee will also be entitled to take leave intermittently or on a 
reduced leave schedule for periods of disability due to a chronic 
serious health condition or to provide needed care for an immediate 
family member with a serious health condition, including psychological 
care when such care would prove beneficial to the patient.
Temporary Transfers to Alternative Positions (Sec. 825.204)
    If an employee needs to take intermittent leave (e.g., for medical 
treatment) or leave on a reduced leave schedule, the employer may 
temporarily transfer the employee to an available alternative position 
for which the employee is qualified and which better accommodates 
recurring periods of leave than the employee's regular position. The 
alternative position must have equivalent pay and benefits; it need not 
have equivalent duties. The conditions of a temporary transfer may not 
violate any applicable collective bargaining agreement containing 
higher standards or more generous provisions for employees than those 
required by FMLA, and employers must observe any other applicable 
standards under Federal or State laws (e.g., the ADA).
    As the legislative history explains, this provision was intended to 
give greater staffing flexibility to employers by enabling them 
temporarily to transfer employees who need intermittent leave or leave 
on a reduced leave schedule to positions more suitable for recurring 
periods of leave. At the same time, it ensures that employees will not 
be penalized for their need for leave by requiring that they receive 
equivalent pay and benefits during the temporary transfer. Congress 
anticipated that a reduced leave schedule would often be perceived as 
desirable by employers who would prefer to retain a trained and 
experienced employee part-time for the weeks that the employee is on 
leave [[Page 2203]] rather than hire a full-time temporary replacement.
    The Women Employed Institute and Women's Legal Defense Fund 
suggested revisions to the regulations to clarify that temporary 
transfers should last only as long as an employee needs to take leave 
intermittently or on a reduced leave schedule; once the leave need 
ends, the employer must then restore the employee to his or her 
original or an equivalent position.
    Kaiser Permanente questioned whether an employer could provide 
``pay in lieu of benefits'' if that is the general practice for 
employees who work less than 20 hours per week. William M. Mercer, Inc. 
asked if, when a full-time employee is temporarily transferred to a 
part-time reduced leave schedule, and part-time employees ordinarily 
have either reduced health care coverage or pay higher premiums, can 
the transferred employee's benefits be similarly reduced? Van Hoy, 
Reutlinger & Taylor noted that an employer is required to maintain the 
employee's full-time benefits (e.g., life and disability insurance) 
while the employee is working part-time on intermittent leave but 
questioned, where such policies are based on pay, whether the employer 
may reduce such benefits--if not, the regulations should contain a 
stronger warning so employers do not inadvertently reduce such 
benefits. The University of California asked for clarification of 
whether only health benefits are required to be maintained for 
employees who take FMLA leave, whether they are on full leave, reduced 
leave schedule, intermittent leave, or while in an alternative 
position. The ERISA Industry Committee requested additional 
clarification on the treatment of annual bonuses, particularly whether 
they may be prorated for time on leave (a pro rata reduction would 
impact the calculation of other benefits).
    An employee may not be required to take more leave than is 
necessary to satisfy the employee's need for FMLA leave. If a full-time 
employee switches to a part-time or reduced leave schedule under FMLA, 
the employee must continue to receive the same (full) level of benefits 
which the employee enjoyed before starting the FMLA leave, and may not 
be required to pay more to maintain that same level of benefits enjoyed 
prior to the start of the FMLA reduced leave schedule, regardless of 
any employer policy applicable to its part-time employees that would 
suggest a different result. To permit otherwise would result in the 
employee not receiving equivalent pay and benefits as required by FMLA. 
An employer may only proportionately reduce the kinds of benefits that 
are computed on the basis of the number of hours worked during the 
period, e.g., vacation or sick leave, insurance or other benefits that 
are determined by the amount of earnings. Once an employee's need for a 
reduced leave schedule under FMLA has ended, the employer must restore 
that employee to his or her original position or to a position that is 
equivalent to the original position (with equivalent benefits, pay, 
etc.). An employer may not transfer an employee to an alternative 
position in order to discourage the employee from taking the leave or 
otherwise create a hardship for the employee (e.g., transfer to the 
``graveyard'' shift; assigning an administrative employee to perform 
laborer's work; reassigning a headquarters staff employee to a remote 
branch site, etc.). This section has been so clarified. The 
relationship between FMLA's provisions and collective bargaining 
agreements containing greater employee rights or more generous 
provisions for employees is discussed in Sec. 825.700.
Determining the Amount of Intermittent/Reduced Leave (Sec. 825.205)
    Only the amount of leave actually taken while on an intermittent or 
reduced leave schedule may be charged as FMLA leave. This means, for 
example, that if a full-time employee who normally worked eight-hour 
days switched to a half-time (four hours per day) reduced leave 
schedule, only \1/2\ week of FMLA leave could be charged each week 
(and, at that rate, it would take 24 weeks to exhaust the employee's 
FMLA leave entitlement if no other FMLA leave were taken during the 12-
month period). For employees working part-time or variable hours, the 
amount of leave entitlement is determined on a proportional basis by 
comparing the new schedule (after starting FMLA leave) to the normal 
schedule (before starting FMLA leave). If an employee's schedule varies 
week-to-week, a weekly average over the 12 weeks prior to starting FMLA 
leave is used for establishing the ``normal'' schedule.
    California Rural Legal Assistance, Inc. suggested that the 
regulations make clear that FMLA leave may not be charged during a week 
when work would not otherwise be available. The Society for Human 
Resource Management questioned how a week of FMLA leave would be 
counted for employees who work seven days and then are off for seven 
days.
    An employee's FMLA leave entitlement may only be reduced for time 
which the employee would otherwise be required to report for duty, but 
for the taking of the leave. If the employee is not scheduled to report 
for work, the time period involved may not be counted as FMLA leave. 
See Sec. 825.200(f).
    The American Compensation Association was not clear on how to 
calculate the pro rata depletion of FMLA leave time for an employee 
presently on a reduced leave schedule due to a disability who needs 
intermittent leave, perhaps one day per week, and asked if it would be 
based on the pre-disability schedule or the current work schedule. 
Chicagoland Chamber of Commerce expressed concern that this section 
might be construed to allow an exempt employee who normally works more 
than 40 hours per week to receive FMLA leave on an intermittent or 
reduced leave schedule basis in excess of his or her 12-week 
entitlement, suggesting the greatest number of hours any employee 
should be entitled to receive for intermittent or reduced leave 
schedule purposes is 480 (12 weeks  x  40 hours). The Chamber of 
Commerce of the USA suggested the regulation make clear that the 12-
week average rule is applied only if an employee's normal schedule 
fluctuates, and not if it fluctuates due to overtime hours of work.
    Section 102 of FMLA states that an eligible employee is entitled to 
``a total of 12 workweeks of leave'' during the 12-month period. The 
statute uses the ``workweek'' as the basis for leave entitlement, and 
an employee's normal ``workweek'' prior to the start of FMLA leave is 
the controlling factor for determining how much leave an employee uses 
when switching to a reduced leave schedule. Nothing in the Act or its 
legislative history suggests that the maximum amount of leave available 
to an employee is 480 hours. If an employee's normal workweek exceeds 
40 hours, the calculation of total FMLA leave available for pro rata 
reduction of total leave entitlement during intermittent leave or 
reduced leave schedules should be based on the employee's normal 
workweek--even if it exceeds 40 hours.
    If an employee with a disability has already switched to a 
permanently reduced work schedule for reasons other than FMLA, and 
needs leave on an intermittent basis, the hours worked under the 
current schedule would be used for making the calculation as provided 
in Sec. 825.205(c).
``541'' Exemption (Sec. 825.206)
    FMLA leave may be unpaid. Section 102(c) of FMLA expressly provides 
that where an employee is otherwise exempt [[Page 2204]] from the Fair 
Labor Standards Act's (FLSA) requirements for payment of minimum wage 
and overtime compensation for hours worked over 40 per week (the 
exemption for ``executive, administrative, and professional'' employees 
under FLSA Sec. 13(a)(1)), compliance by an employer with FMLA's 
requirement to provide unpaid leave shall not affect the exempt status 
of the employee under the FLSA exemption and its regulations (29 CFR 
Part 541). Thus, employers can ``dock'' the pay of otherwise-exempt, 
salaried employees for FMLA leave taken for partial day absences. If an 
FLSA-exempt employee needs to work a reduced leave schedule under FMLA, 
the employer may deduct from the employee's salary partial-day absences 
for any hours taken as intermittent or reduced schedule FMLA leave 
within the workweek without causing loss of the employee's exempt 
status under 29 CFR Part 541. By operation of the statute (FMLA), this 
exception to the FLSA ``salary basis'' rule extends only to leave which 
qualifies as FMLA leave (i.e., FMLA-eligible employees, working for 
FMLA-covered employers, who take FMLA leave only for reasons which 
qualify as FMLA leave).
    Twenty comments were received on this provision. Many commenters 
complained that the tension between FMLA's requirement to grant unpaid 
leave and FLSA's ``salary basis'' rule prohibiting partial-day 
deductions from pay for FLSA-exempt employees discourages employers 
from maintaining more generous family leave policies that were in 
effect prior to FMLA, or from extending FMLA leave rights to non-
covered or non-eligible employees, because of the risk of jeopardizing 
the exempt status of entire classes of employees. The Personnel 
Department of Whatcom County, Washington, noted the inequitable result 
under the rule that causes non-exempt employees to obtain a ``better 
package'' under FMLA than exempt employees do. In contrast, the Service 
Employees International Union stated it would have been inappropriate 
for DOL to expand FMLA's exception to the FLSA ``salary basis'' test 
beyond the use of FMLA-qualified leave. The United Food and Commercial 
Workers International Union opposed allowing even FMLA-required 
deductions from an employee's salary without affecting the employee's 
qualifications for exemption under the FLSA because it permits the 
employer to reduce an employee's wages for hourly leave without having 
to grant overtime pay for hours over 40 per week. Van Hoy, Reutlinger & 
Taylor recommended that the final rule also address how employers treat 
salaried but non-exempt employees who are paid on the ``fluctuating 
workweek'' method for payment of half-time overtime compensation when 
FMLA leave results in fewer than 40 hours being worked in the workweek.
    An employee subject to FLSA's overtime requirements who is paid on 
a salary basis and whose workhours fluctuate each week may be paid 
overtime compensation under the ``fluctuating workweek'' method of 
payment described in 29 CFR 778.114. Where the employee and employer 
mutually agree that the salary amount will compensate the employee for 
all straight-time earnings for whatever hours are worked in the week, 
whether few or many, payment of extra compensation, in addition to the 
salary, for all overtime hours worked at one-half the ``regular rate'' 
will meet FLSA's overtime compensation requirements. Because the salary 
covers ``straight-time'' compensation for however many hours are worked 
in the workweek, the employee's ``regular rate'' varies each week 
(determined by dividing the salary by the number of hours worked each 
week). Payment for the overtime hours at one-half the rate computed 
each week, in addition to the salary, results in payment of time-and-
one-half the regular rate for all overtime hours worked each week. The 
``fluctuating workweek'' method of payment for overtime hours may not 
be used unless the salary amount is enough to yield average hourly 
straight-time earnings in excess of the statutory minimum wage for each 
hour worked in the weeks when the employee works the greatest number of 
hours. Typically, it is mutually agreed by the parties under these 
types of salary arrangements that the salary will be paid as straight-
time compensation for however many or few hours are worked, long weeks 
as well as short weeks, under the circumstances of the employment 
arrangement as a whole.
    Therefore, because payment of the agreed-upon salary is required in 
each short workweek as a prerequisite for payment of overtime 
compensation on a ``fluctuating workweek'' basis, employers may not 
dock the salary of an employee paid on this basis who takes FMLA leave 
intermittently or on a reduced leave schedule without abandoning the 
``fluctuating workweek'' overtime formula. An employer may either 
continue paying such an employee the agreed-upon salary in any week in 
which any work is performed during the employee's FMLA leave period, or 
may choose to convert the employee to an hourly basis of payment, with 
payment of proper time-and-one-half the hourly rate for any overtime 
hours worked during the period of the condition for which FMLA leave is 
needed intermittently or on a reduced leave schedule basis, and later 
restore the salary basis of payment after the employee's need for 
intermittent or reduced schedule FMLA leave has concluded. If an 
employer chooses to follow this exception from the fluctuating workweek 
method of overtime payment, it must do so uniformly for all employees 
paid on a fluctuating workweek basis who take FMLA leave intermittently 
or on a reduced leave schedule, and may not do so for employees taking 
leave under circumstances not covered by FMLA. The final rule has been 
clarified to reflect this policy.
    While the Department recognizes the view, as some commenters noted, 
that a tension exists between partial-day docking under the FLSA 
``salary basis'' rule and the intent of FMLA to encourage more generous 
family and medical leave policies, we are constrained by the literal 
language of the statutory terms to adhere to the policy set forth in 
the Interim Final Rule. By operation of FMLA, the statutory exception 
to the FLSA 541 exemption's ``salary basis'' rule extends only to leave 
qualifying as FMLA leave that is taken by FMLA-eligible employees 
employed by FMLA-covered employers. No further revisions are made in 
this section.
Paid or Unpaid Leave (Sec. 825.207)
    FMLA requires unpaid leave, generally. If an employer provides paid 
leave of fewer than the 12 workweeks required by FMLA, the additional 
weeks necessary to attain 12 workweeks of leave in the 12-month period 
may be unpaid. FMLA also provides for substituting appropriate paid 
leave for the unpaid leave required by the Act. An employee may elect, 
or an employer may require the employee, to substitute any of the 
employee's accrued paid vacation leave, personal leave, or family leave 
if it is: (1) for the birth of a child, and to care for such child; (2) 
for placement of a child with the employee for adoption or foster care, 
and to care for such child; or, (3) to care for the employee's spouse, 
child, or parent, if the spouse, child or parent has a serious health 
condition. The legislative history explains that ``family leave'' as 
used here in FMLA refers to paid leave provided by the employer ``* * * 
covering the particular circumstances for which the employee 
[[Page 2205]] is seeking leave under [FMLA for birth or adoption of a 
child, or for the serious health condition of an immediate family 
member] * * *'' (emphasis added). Based on this legislative history, 
the regulations similarly included a limitation that family leave may 
only be substituted ``under circumstances permitted by the employer's 
family leave plan'' (Sec. 825.207(b)).
    In addition, the employee may elect, or the employer may require 
the employee, to substitute any of the employee's accrued paid vacation 
leave, personal leave, or medical or sick leave for FMLA leave taken 
for the serious health condition of an immediate family member (spouse, 
child, or parent) or for the employee's own serious health condition 
that makes the employee unable to work, except that an employer is not 
required to provide paid sick leave or paid medical leave ``in any 
situation in which the employer would not normally provide any such 
paid leave.'' (FMLA Sec. Sec. 102(d) (2) (A) & (B).)
    These substitution provisions are intended to allow for the 
specified paid leaves that have accrued but have not yet been taken by 
an employee to be substituted for the unpaid leave required under FMLA, 
in order to mitigate the financial impact of wage loss due to family 
and temporary medical leaves. The substitution provisions assure that 
an employee is entitled to the benefits of applicable paid leave, plus 
any remaining leave time made available by FMLA on an unpaid basis.
    The State of Oregon's Bureau of Labor and Industries asked for 
clarification of whether the employee or the employer had the 
prerogative or control over the decision to substitute paid leave for 
FMLA leave. Sommer & Barnard suggested additional guidance was needed 
on employee substitution where the employer does not require it. The 
California Department of Fair Employment and Housing recommended the 
rule clearly state that employees have the right to substitute paid 
vacation during FMLA leave, and suggested further amendments to allow 
employers to require certification for FMLA leave where an employee 
desires to use paid vacation leave. The California Teamsters Public 
Affairs Council opposed permitting an employer to force an employee to 
use paid vacation or personal leave during FMLA leave absent a specific 
request from the employee to substitute such paid leave. The Equal 
Employment Advisory Council suggested the regulations allow employers 
to restrict substitution of paid vacation if the employer policy 
normally restricts vacations to certain times during the year. Chevron 
and the American Apparel Manufacturers Association, Inc. stated that 
paid leave should only be permitted at the employer's option (or 
discretion). Cincinnati Gas & Electric Company suggested that paid 
leave should be available for substitution only under the rules of the 
plan which established the paid time off.
    FMLA's substitution language provides that ``* * * an eligible 
employee may elect, or an employer may require the employee, to 
substitute any of the * * *'' appropriate paid leave for any part of 
the 12-week period of FMLA leave. Under these terms, if an employee 
does not elect to substitute appropriate paid leave when requesting 
FMLA leave, the employer has the right to require that the employee do 
so. An employee always has the right to request, in the first instance, 
that appropriate paid leave be substituted. There are no limitations, 
however, on the employee's right to elect to substitute accrued paid 
vacation or personal leave for qualifying FMLA leave, and the employer 
may not limit the timing during the year in which paid vacation may be 
substituted for FMLA-qualifying absences or impose other limitations. 
If the employee does not initially request substitution of appropriate 
paid leave, the employer retains the right to require it. An employer 
may not override an employee's initial election to substitute 
appropriate paid leave for FMLA leave, nor place any other limitations 
on its use (e.g., minimum of full days or weeks at a time, etc. ). At 
the same time, in the absence of other limiting factors (such as a 
State law or an applicable collective bargaining agreement), where an 
employee does not elect substitution of appropriate paid leave, the 
employee must nevertheless accept the employer's decision to require 
it, even where the employee would desire a different result. The 
regulations have been clarified to address these principles.
    The Women's Legal Defense Fund, 9 to 5, National Association of 
Working Women, AFL-CIO, Food & Allied Service Trades, International 
Brotherhood of Teamsters, and Service Employees International Union 
opposed what they perceived as unwarranted regulatory restrictions on 
the ability to substitute paid ``family leave'' under FMLA, and 
recommended deletion of the restrictive language. We have revised the 
language in Sec. 825.207(b) to track the language of the legislative 
history, which explains the meaning of ``family leave'' in this 
context. The effect of the revision, however, is the same result as 
under the terms of the Interim Final Rule.
    Sixteen comments raised concerns over the relationship and 
interaction between FMLA leave and absences caused by on-the-job, 
workers' compensation injuries, and requested further guidance. The 
Women Employed Institute and the Women's Legal Defense Fund argued that 
workers' compensation cannot be substituted as paid leave for FMLA 
leave, even if such payments are proxies for lost wages. Many employer 
commenters argued alternatively that employers should not only be 
allowed to count the workers' compensation absence as FMLA leave, but 
they should continue to be allowed to exercise their rights under 
workers' compensation laws to require an employee to return to work at 
restricted or ``light'' duty. The Employers Association of Western 
Massachusetts, Inc. requested clarification of whether insured 
disability plans and self-insured disability plans are similarly 
considered a form of ``accrued paid leave'' under FMLA.
    An employee who incurs a work-related illness or injury elects 
whether to receive paid leave from the employer or worker's 
compensation benefits. An employee cannot receive both. Therefore, 
where a work-related illness or injury also causes a ``serious health 
condition that makes the employee unable to perform the functions of 
the position of such employee'' within the meaning of FMLA, and the 
employee has elected to receive worker's compensation benefits, an 
employer cannot require the employee to substitute, under FMLA, any 
paid vacation or other leave during the absence that is covered by 
payments from the State workers' compensation fund. Similarly, an 
employee cannot elect to receive both worker's compensation and paid 
leave benefits. Such an absence can count, however, against an 
employee's FMLA leave entitlement if it is properly designated at the 
beginning of the absence as required by these regulations. Neither the 
statute nor its legislative history suggests that time absent from work 
for work-related accidents should not run concurrently for purposes of 
FMLA and the State workers' compensation laws (provided the illness or 
injury also meets FMLA's definition of ``serious health condition''). 
Indeed, FMLA's legislative history suggests that the Congress 
contemplated this result--in describing the intended meaning of 
``serious health condition,'' the Committee reports refer to ``injuries 
caused by serious accidents on or off the [[Page 2206]] job'' (among 
other examples). On the other hand, payments from a State workers' 
compensation fund are not benefits provided by the employer, nor are 
they a form of ``paid leave'' provided by the employer for purposes of 
FMLA's substitution provisions. While the time absent from work can 
simultaneously count under both FMLA and State workers' compensation 
programs, payments provided by State workers' compensation funds are 
not considered ``accrued paid medical or sick leave'' within the 
meaning of FMLA. In addition, when an employee is receiving payments 
from the State workers' compensation fund, the employee may not elect, 
nor may the employer require the employee, to exhaust any form of paid 
leave provided by the employer during any portion of the absence 
covered by the workers' compensation payments. Payments provided under 
other types of plans covering temporary disabilities (whether provided 
voluntarily through insurance or under a self-insured plan, or required 
to meet State-mandated disability provisions (e.g., pregnancy 
disability laws)) are to be treated similarly under FMLA--the time may 
be charged against an employee's FMLA leave entitlement (provided 
employees are properly notified of the designation at the commencement 
of the absence and any group health benefits are maintained by the 
employer as if the employee had continued to work, as required by these 
regulations). But an employee's receipt of such payments precludes the 
employee from electing, and prohibits the employer from requiring, 
substitution of any form of accrued paid leave for any part of the 
absence covered by such payments.
    As will be discussed in further detail in connection with 
Sec. 825.702, an employer is precluded from requiring an employee to 
return to work prematurely in a ``light duty'' assignment, instead of 
taking FMLA leave, if the employee remains unable to perform any one or 
more of the essential functions of the original position and the 
employee has not yet exhausted his or her full FMLA leave entitlement 
in the 12-month period. The reference point for determining an 
employee's essential job functions is the position held by the employee 
when the need for FMLA leave arises, i.e., when the employee's notice 
of the need for leave is given or leave commences, whichever is 
earlier. An employer may not modify a job to eliminate essential job 
functions in an effort to deny an employee his or her FMLA leave 
rights. On the other hand, FMLA does not prevent the continuation of 
lawful policies under State workers' compensation programs that 
discontinue wage replacement payments if and when an employee refuses 
to accept a medically-approved light duty assignment. In such a case, 
the employee may continue on FMLA leave where the employee cannot 
perform any one or more of the essential functions of the employee's 
former position, and the employee would have the right to elect to 
substitute appropriate paid leave, or continue on unpaid FMLA leave, 
until the employee has exhausted his or her 12-week FMLA leave 
entitlement in the 12-month period. The regulations are clarified in 
response to these comments to address absences covered by State 
workers' compensation laws.
    The Chamber of Commerce of the USA stated that employers should be 
able to draft paid leave policies expansively or restrictively, and if 
an employee is unable to use paid leave, the leave will be unpaid. The 
National Restaurant Association similarly suggested that any 
substituted paid leave must be taken in accordance with the employer's 
paid leave policies. Fisher & Phillips considered the regulations 
contradictory and inconsistent with FMLA, because they allow employees 
to substitute paid vacation or personal leave for unpaid FMLA leave 
while prohibiting employers from imposing any limitations, yet also 
state that employees may be required to comply with requirements of the 
employer's leave plan. Fisher & Phillips suggested that all of an 
employer's normal restrictions on the use of paid leave should continue 
to apply when paid leave is substituted for FMLA leave, because FMLA 
does not require the use of paid leave. Sommer & Barnard and Fisher & 
Phillips also objected to Sec. 825.207(g), which restricts an 
employer's ability to request notice and certification for FMLA leave 
where the employee substitutes paid leave and the employer's normal 
leave policies do not require notice or certification (the employee may 
only be required under the Interim Final Rule to comply with the less-
stringent requirements of an employer's plan, and not any more 
stringent notice or certification requirements of FMLA, unless the paid 
leave period is followed by unpaid FMLA leave). These two commenters 
and United HealthCare Corporation suggested employers be allowed to 
deny FMLA leave unless FMLA's notice and certification requirements are 
met, whether the leave is unpaid or substituted paid leave, to assure 
employers of their statutory rights and avoid confusion for employees. 
The University of California asked that DOL clarify how the employer 
confirms that requested time off to care for an ill family member or 
for personal illness qualifies as FMLA leave if the employer cannot 
confirm the request by asking for medical certification.
    In response to the comments, this section is clarified. When paid 
leave is substituted for unpaid FMLA leave, and an employer has less 
stringent procedural requirements for taking that kind of leave than 
those of FMLA, only those less stringent requirements may be applied. 
An employee who complies with the employer's less stringent leave plan 
requirements in such cases may not have leave for an FMLA purpose 
delayed or denied on the grounds that the employee failed to comply 
with stricter requirements of FMLA. However, where accrued paid 
vacation or personal leave is substituted for unpaid FMLA leave for a 
serious health condition, an employee may be required to comply with 
any less stringent medical certification requirements of the employer's 
sick leave program. Appropriate revisions have been made in the notice 
and certification provisions of Secs. 825.302(g), 825.305(e), and 
825.306(c). An employer of course may make revisions to its leave 
program to require notice or certification that corresponds to FMLA 
requirements, or may treat paid and unpaid leave differently, provided 
the program is not amended in a discriminatory manner that treats 
employees on FMLA leave differently from other, similarly situated, 
employees.
    The State of Nevada's Department of Personnel recommended the 
regulations be revised to allow substitution of compensatory time-off 
for unpaid FMLA leave. The Town of Normal (Illinois) suggested the 
employer should be able to require an employee to take compensatory 
time for FMLA leave. Montgomery County (Maryland) recommended that 
DOL's interpretative ruling that prohibits employers from using 
compensatory time as FMLA leave be included in the regulations.
    The use of compensatory time off is severely restricted under the 
Fair Labor Standards Act (FLSA) in ways that are incompatible with 
FMLA's substitution provisions. First, ``comp'' time is not a form of 
accrued paid leave mentioned in the FMLA or legislative history for 
purposes of substitution. It is also not a benefit provided by the 
employer. Rather, it is an alternative form for paying public employees 
(only) for overtime hours worked. The public employee's ``comp time 
bank'' is not the property of the employer to control, but 
[[Page 2207]] rather belongs to the employee. If a public employee 
terminates employment, any unused comp time must be ``cashed out.'' 
Thus, FMLA's provisions allowing an employer to unilaterally require 
substitution would conflict with FLSA's rules on public employees' use 
of comp time only pursuant to an agreement or understanding between the 
employer and the employee (or the employee's representative) reached 
before the performance of the work. A public employee who has accrued 
comp time off must also be permitted to use the time ``within a 
reasonable period after making the request if the use of compensatory 
time does not unduly disrupt the operations of the public agency'' 
(FLSA Sec. 7(o), emphasis added). To the extent that the conditions 
under which an employee may take comp time off are contained in an 
agreement or understanding, the terms of the agreement or understanding 
govern the meaning of ``reasonable period'' (29 CFR Sec. 553.25). An 
agency may turn down an employee's request for comp time off under FLSA 
if it would be unduly disruptive to the agency's operations. The 
employer's right to control an employee's use of comp time, including 
authority to decline a request for its use, would simply be 
inconsistent with FMLA's provision authorizing the employee to elect to 
substitute paid leave (without qualification as to whether the time 
taken would be unduly disruptive). While a public employee may 
certainly request the use of comp time under FLSA for an FMLA-
qualifying absence, the employer may not simultaneously charge the FLSA 
comp time hours taken against the employee's separate FMLA leave 
entitlement. To do so would amount to charging (debiting) two separate 
entitlements for a single absence. Accordingly, public employers may 
not use their employee's FLSA ``comp time'' banks as a form of 
``accrued paid leave'' for purposes of substitution under FMLA, and 
this section is so revised.
Designating Paid Leave as FMLA Leave (Sec. 825.208)
    This section of the Interim Final Rule placed responsibility on the 
employer to designate all FMLA leave taken, whether paid or unpaid, as 
FMLA-qualifying, based on information obtained directly from the 
employee. Because employees may not spontaneously explain the reasons 
for taking their accrued paid vacation or personal leave, the 
regulations allowed employees to request to use their paid leave 
without necessarily stating that it was for an FMLA purpose, and if the 
employer rejected the request under its normal leave policies, the 
eligible employee would be expected to come forward in response to the 
employer's further inquiry with additional information to enable the 
employer to determine that it is FMLA leave (which could not be 
denied). Employers are required to determine and designate ``up front'' 
before leave starts whether any paid leave to be taken counts toward an 
employee's FMLA leave entitlement, and so notify the employee 
``immediately'' upon learning that it qualifies as FMLA leave (in 
accordance with the employer's ``specific notice to employees'' 
obligations under Sec. 825.301(c)). Only where leave had already begun 
and the employer had insufficient information to determine whether it 
qualified under FMLA could it be retroactively designated as FMLA leave 
under the Interim Final Rule. Employers were precluded in all cases 
from retroactively designating any paid leave taken as FMLA leave once 
the leave had ended and the employee had returned to work.
    This section was intended to resolve the question of FMLA 
designation as early as possible in the leave request process, to 
eliminate protracted ``after the fact'' disputes. The regulations 
expected disputes to be resolved through discussions between the 
employee and the employer at the beginning of the leave rather than at 
the end. Because of the possible ``stacking'' of unpaid FMLA leave 
entitlements in addition to an employer's pre-existing leave plan, it 
appears that some employers that wished to mitigate their exposure to 
extended leaves by employees have been motivated by the provisions in 
the Interim Final Rule to try to determine and count all possible FMLA-
qualifying absences as FMLA leave (by whatever means, including through 
overly-intrusive inquiries of employees when they request to use their 
accrued paid leave).
    The Commission on the Status of Women, Equal Rights Advocates, and 
Gwen Moore, Majority Whip, California Legislature objected to an 
employer's ability to inquire into the purposes of the employee's paid 
vacation or personal leave to determine if it qualifies under FMLA, 
because it allows the employer unfettered discretion to invade the 
employee's privacy. Federated Investors and Michigan Consolidated Gas 
Company noted that extracting the reason for an employee's need to be 
away from work could violate the Americans With Disabilities Act. Many 
employer groups, in contrast, felt that the employer should be 
permitted to conduct a reasonable investigation to determine if leave 
qualifies as FMLA leave (including inquiring of persons other than the 
employee for purposes of verification, such as the employee's 
physician).
    Blue Cross and Blue Shield of Texas, Inc. and LaMotte Company 
pointed out that circumstances could arise where the unduly restrictive 
structure of the regulations disadvantages employees, such as where an 
employee is about to be disciplined for attendance problems and time 
previously missed and is precluded, due to the bar against retroactive 
designation of FMLA leave, for asserting FMLA leave as a defense. 
Burroughs Wellcome Company, Massmutual Life Insurance Company, and 
several others noted the restrictive structure was inconsistent with 
other regulatory provisions that allow up to 15 days from employees to 
furnish medical certification to substantiate FMLA leaves--where leave 
is unplanned and of relatively short duration or if the employee or 
health care provider delay processing the certification, the employee 
could be back at work before the employer had sufficient information to 
confirm that the leave qualified under FMLA and the employee would lose 
FMLA's benefits and protections. Several commenters (including the 
Texas Department of Human Services) suggested that employers be allowed 
to designate FMLA leaves immediately upon the employee's return to 
work. William M. Mercer, Inc. suggested permitting an employer to 
designate leave as qualifying under FMLA after it has ended if the 
inability to designate it during the leave resulted from the employee 
refusing to give needed information, or providing wrong information. 
The Chamber of Commerce of the USA suggested that employees be required 
to declare their intention to take FMLA leave at the beginning of an 
FMLA-qualifying period, and that employers be allowed to consider 
information from third parties and be allowed to designate leave as 
FMLA-qualifying within 90 days following the end of a leave period. The 
Equal Employment Advisory Council suggested similar approaches with 
related rationales, noting in particular that inquiring into the 
reasons for employee leave requests for vacation and personal days was 
having a negative impact on employer-employee relations. EEAC 
recommended that employees be required to give notice of FMLA leave, 
and an employer's request for medical certification should be deemed a 
provisional designation of FMLA leave [[Page 2208]] (subject to the 
employee satisfying the certification process).
    Sommer & Barnard recommended the regulations be amended to provide 
that when an employer policy requires an employee to designate paid 
leave as FMLA leave, the employee shall provide FMLA notice and 
certification (if applicable). They noted that when Sec. 825.207(g) 
(which exempts an employee using paid leave that is not followed by 
unpaid FMLA leave from FMLA's notice and certification requirements) 
and Sec. 825.208(a)(1) (relieves an employee using paid leave from any 
obligation to explain the reason for the leave unless the employer 
denies the request) are linked with Sec. 825.208(b) (FMLA 
determinations to be based only on information furnished directly by 
the employee), the rules effectively deprive an employer of the 
opportunity to make an informed determination that paid leave will be 
used for FMLA-qualifying reasons and should be counted as FMLA unless 
the employee volunteers sufficient accurate information. Moreover, this 
structure could encourage employees to withhold information and 
misrepresent facts to expand the aggregate of employer-paid leave and 
FMLA's unpaid leave entitlement.
    After careful consideration of the many comments and objections 
received on this section, the Department has revised the regulations 
along the following lines. Designation of leave as being FMLA-
qualifying is still expected to take place ``up front'' whenever 
possible. The employer's notification to the employee of the 
designation may be oral, but must be confirmed in writing, no later 
than the next regular payday (unless less than a week remains until the 
next payday). The written notice may be in any form, including a 
notation on the pay stub.
    If the employer has the requisite knowledge to determine that a 
leave is for an FMLA reason at the time the employee either gives 
notice of the need for leave or it commences, and the employer does not 
notify the employee as required at that time that the leave is being 
designated as FMLA leave, the employer may not then designate the leave 
as FMLA leave retroactively; it may designate only prospectively, as of 
the date of notification to the employee of the designation, that the 
time is being charged against the employee's FMLA leave entitlement. 
The employer may not designate leave that has already been taken as 
FMLA leave after the employee returns to work, with two exceptions: (1) 
if an employee is out for an FMLA-qualifying reason and the employer 
does not learn of the reason for the leave until the employee returns 
to work, the employer may designate the leave as FMLA leave promptly 
(within two business days) upon the employee's return to work 
(including a provisional designation based on information from the 
employee, subject to confirmation upon the employer's receipt of 
medical certification if the employer requires it and has previously 
notified the employee of the requirement); or (2) if the employer has 
provisionally designated the leave under FMLA and is awaiting receipt 
from the employee of medical certification or other ``reasonable 
documentation'' allowed by this amended rule to confirm that the leave 
was FMLA-qualifying, or the employer and employee are in the process of 
obtaining second or third medical opinions. If the employer does not 
designate leave as FMLA leave in a timely manner as required by the 
regulations, the employer may not later designate the absence as FMLA 
leave absent the circumstances specified above. Similarly, the employee 
is not entitled to the protections of the FMLA if the employee gives 
notice of the reason for the leave later than two days after returning 
to work. The regulations are also clarified that if an absence which 
begins as other than FMLA leave later develops into an FMLA-qualifying 
absence (e.g., employee takes a two-week vacation for a ski trip and 
suffers a severe accident requiring hospitalization beginning the 
second week), the entire portion of the leave period that qualifies 
under FMLA may be counted as FMLA leave (e.g., the second week). 
Employers must still base their designations of FMLA leave on 
information obtained directly from the employee or the employee's 
spokesperson (in the event the employee is incapacitated or otherwise 
designates a point of contact, e.g., an immediate family member). If an 
employee does not provide information regarding the reason for the 
leave, leave may be denied.
    Designating leave as FMLA-qualifying does not block greater ADA 
rights. See Sec. 825.702.
Benefit Entitlements During FMLA Leave (Sec. 825.209)
    Eligible employees who take FMLA leave are entitled to be restored, 
at the end of their leave, to the same jobs they held when the leave 
commenced, or to an equivalent job with equivalent employment benefits, 
pay, and other terms and conditions of employment. The taking of FMLA 
leave cannot result in the loss of any employment benefit accrued 
before the leave began; however, nothing in FMLA entitles restored 
employees to the accrual of seniority or employment benefits during the 
leave, or to any right, benefit, or position of employment other than 
what they would have been entitled to had they not taken the leave. 
(Secs. 104(a)(1), (2), and (3) of FMLA.) In addition, during a period 
of FMLA leave, the employer must maintain coverage under any ``group 
health plan'' at the level and under the conditions coverage would have 
been provided if the employee had continued to be employed continuously 
during the leave. (Sec. 104(c)) The legislative history explains that 
this is strictly a maintenance of benefits provision. FMLA does not 
require an employer to provide health benefits if it does not do so at 
the time the employee commences leave. The legislative history notes 
further, however, that if an employer establishes a health benefits 
plan during an employee's leave, FMLA's provisions should be read to 
mean that the entitlement to health benefits would commence at the same 
point during the leave that employees would have become entitled to 
such benefits if still on the job.
    Several commenters requested further clarification in this section 
on the impact on continued FMLA leave rights, maintenance of health 
benefits, and restoration to employment when the job of an employee on 
FMLA leave is eliminated, such as through a department-wide downsizing 
or layoff. FMLA's legislative history explains that the explicit 
limitation in FMLA Sec. 104(a)(3) means that if, but for being on 
leave, an employee would have been laid off, the employee's right to 
reinstatement is whatever it would have been had the employee not been 
on leave when the layoff occurred. In order to clarify this point, the 
regulations are revised at Sec. 825.211(c) to provide that, except as 
required by COBRA and for ``key'' employees, an employer's obligation 
to maintain health benefits during FMLA leave and to restore an 
employee after the planned leave under FMLA ceases if and when the 
employee's employment relationship would have terminated (e.g., the 
employee's position is eliminated as part of a nondiscriminatory 
reduction in force, i.e., no transfer or reassignment option is 
available to similarly-affected employees not on FMLA leave); the 
employee informs the employer unequivocally of the employee's intent 
not to return from leave (including when the leave would have begun if 
the employee so informs the employer before the leave begins--unless 
the employee is on paid leave during the period); the employee fails to 
return [[Page 2209]] from leave, and thereby terminates employment; or 
the employee stays on leave (i.e., is unable to return to work) after 
exhausting his or her FMLA leave entitlement in the 12-month period.
    The Chamber of Commerce of the USA suggested clarifications to 
unambiguously state that plan changes such as premium increases, 
increased deductibles, etc., which apply to active employees also apply 
to employees who are on FMLA leave. This requirement has been 
clarified.
    A number of commenters requested specific guidance in this section 
regarding how particular fringe benefit plans or practices with respect 
to ``cafeteria plans,'' ``flexible spending accounts,'' and the 
``continuation of health benefits provisions'' of title X of the 
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) interact 
with FMLA, particularly in regard to the tax implications of such 
programs. These issues cannot be resolved through FMLA's implementing 
regulations, because they are within the authority of the Internal 
Revenue Service (IRS). Questions regarding these matters should be 
directed to the IRS. (See Notice 94-103 in Internal Revenue Bulletin 
No. 1994-51, dated December 19, 1994.)
    Nationsbank Corporation (Troutman Sanders) and Southern Electric 
International, Inc. (Troutman Sanders) stated that the rule failed to 
specify whether family members whose coverage is dropped at the 
employee's election during FMLA leave may be required to requalify for 
coverage upon the employee's return to work, and suggested that FMLA 
was not intended to exempt non-employee insureds from requalification. 
An employee is entitled to be restored to the same level of benefits 
which the employee received prior to starting the leave, including 
family or dependent coverages, without any qualifying period, physical 
examination, exclusion of pre-existing conditions, etc., and the 
regulations are clarified to reflect this requirement.
    The UAW International Union recommended that this section be 
amended to state that an employer may not treat workers who take FMLA 
leave in a manner that discriminates against them--e.g., if workers on 
other forms of paid or unpaid leave are entitled to have coverage 
maintained for other, non-health plan benefits (life insurance, 
disability insurance, etc.), then the employer is required to follow 
its established practice or policy for maintaining these benefits for 
workers on paid or unpaid FMLA leave. This is addressed under the 
``prohibited acts'' section of the regulations, at Sec. 825.220. This 
section has been clarified to address employees' entitlements to 
holiday pay and other benefits while on FMLA leave.
    The law firm of Alston and Bird recommended that the term group 
health plan should not include non-employment related health benefits 
paid directly by employees through voluntary deductions, e.g., 
individual insurance policies. We agree with the recommendation, and 
language has been added to Sec. 825.209(a) to exclude such benefits 
from the definition of group health plan, and to make clear that an 
employer is not responsible for maintaining or restoring such benefits 
for employees who take FMLA leave.
Employee Payments of Health Benefit Premiums (Sec. 825.210)
    Because health benefits must be maintained during FMLA leave at the 
level and under the conditions coverage would have been provided if the 
employee had continued to work, any share of group health plan premiums 
which the employee had paid before starting FMLA leave must continue to 
be paid by the employee during the leave. Any changes to premium rates 
and levels of coverages or other conditions of the plan that apply to 
the employer's active workforce also apply to eligible employees on 
FMLA leave. The regulations discuss options available to employers for 
collecting premium payments from employees on FMLA leave. Employers 
must give employees advance written notice of the terms for payment of 
such premiums during FMLA leave, and an employer may not apply more 
stringent requirements to an employee on FMLA leave than required of 
employees on other forms of unpaid leave under the terms of the Interim 
Final Rule.
    One option referenced in Sec. 825.210(b)(4) provided that an 
employer's existing rules for payment by employees on ``leave without 
pay'' could be followed, provided prepayment (before the leave 
commenced) was not required. The State of Oregon's Bureau of Labor and 
Industry questioned whether existing employer policies that formerly 
required an employee to assume responsibility for payment of all 
premiums for group health plan coverage during unpaid leave (both 
employer and employee shares) could continue to operate under FMLA, as 
Sec. 825.210(b)(4) appeared to imply, or did Secs. 825.210 (b)(4) and 
(e) refer only to the manner of payment rather than the duty to pay the 
premiums itself? The payment obligations of employers for group health 
plan premiums during FMLA leave are subject to the same conditions that 
coverage would have been provided if the employee had continued to 
work; thus, employers cannot increase the employee's share of premiums 
during unpaid FMLA leave. The rules referred only to the manner of 
collecting premium payments.
    Nationsbank Corporation and Southern Electric International, Inc. 
(Troutman Sanders) questioned whether an employer may use different 
options with different employees on a case-by-case basis for recovery 
of premiums from employees during unpaid FMLA leave or whether the 
employer must choose one option and apply it uniformly. The rules do 
not prohibit an employer from using different options on a case-by-case 
approach to meet the particular needs of employees and the employer, 
provided the employer does not act in a discriminatory manner.
    The Chamber of Commerce of the USA opposed the requirement that 
employer policies on FMLA leave be equal to other leaves without pay 
provided by the employer, suggesting there is no statutory basis for 
this rule. Under the Interim Final Rule, sections 105 and 402 of the 
Act were construed in Sec. 825.210(e) of these regulations and 
elsewhere to prohibit an employer from requiring more of employees (or 
providing less to employees) who take unpaid FMLA leave than the 
employer's policies require of (or provide to) employees on other forms 
of unpaid leave. We continue to believe that this regulation represents 
the proper construction of the Act.
Multi-employer Health Plans (Sec. 825.211)
    Seven comments were received on this section, which describes 
special rules for maintenance of group health benefits under multi-
employer health plans. The Associated General Contractors of America 
(AGC) contended that DOL wrongly concluded that employers under multi-
employer plans must continue to make contributions during FMLA leave 
and that the legislative history, on which DOL relies, is internally 
inconsistent. AGC also urged that DOL clarify the FMLA rights of an 
employee who would have been laid off by a contributing employer during 
a period of FMLA leave but who might also have found employment with 
another contributing employer during the same period. Even if the 
individual might have found other employment with another contributing 
employer, AGC contends that the employer of the employee when the FMLA 
leave commenced has no further obligations under FMLA beyond the date 
on which he or she would have [[Page 2210]] been laid off. Constructors 
Association of Western Pennsylvania filed similar views on this point.
    These last comments reflect a proper interpretation of FMLA, as 
reflected throughout the regulations. Coverage by the group health plan 
must be maintained at the level coverage would have been provided if 
the employee continued to be employed instead of taking FMLA leave. As 
discussed elsewhere in these regulations, this means, for example, that 
if, but for being on leave, an employee would have been laid off, the 
employee's rights under FMLA, including the requirements to maintain 
group health plan coverage, are whatever they would have been had the 
employee not been on leave when the layoff occurred. And, of course, 
these FMLA obligations apply only with respect to an ``eligible 
employee'' who has met the length of employment and hours of service 
tests. Neither the employer nor the multiemployer plan has any 
obligation under FMLA with respect to persons who are not ``eligible 
employees.'' The regulations are revised to clarify that group health 
coverage under a multiemployer plan must be maintained for an employee 
on FMLA leave at the same level coverage was provided when the leave 
commenced until either: (1) the FMLA leave entitlement is exhausted; 
(2) the employer can show that the employee would have been laid off 
and the employment relationship terminated; or, (3) the employee 
provides unequivocal notice of an intent not to return to work. With 
respect to the remaining comments on this section, we consider that the 
legislative history, as well as the regulations, accurately reflect the 
intent of the Congress that multiemployer plans must receive 
contributions during the period of an employee's FMLA leave, and that 
the rate of contribution is the same amount as if the employee were 
continuously employed, at the same schedule, at the same wage or 
salary, and otherwise under the same terms and conditions as he or she 
normally worked before going on leave, unless a contrary result can be 
clearly demonstrated by the employer (or by the plan, where 
appropriate).
Failure to Timely Pay Health Plan Premiums (Sec. 825.212)
    This section provided that an employer's obligation to maintain 
group health benefits ceases after an employee's premium payment is 
more than 30 days late. The preamble explained that coverage had to be 
maintained during the 30-day grace period. If an employer chose to drop 
group health plan coverage because an employee failed to make timely 
premium payments, all other FMLA obligations continue to apply during 
the FMLA leave, including the requirement to restore the employee to an 
equivalent position after the leave with full coverage and benefits 
equivalent to what the employee would have had if leave had not been 
taken and the premium payment had not been missed. An employee 
returning from FMLA leave may not be required to meet any qualification 
requirements imposed by the plan, including any new preexisting 
condition waiting period, waiting for an open season, or passing a 
medical examination for coverage to be reinstated.
    Acrux Investigation Agency, Austin Human Resource Management 
Association, HCMF (long term care facilities), K-Products, Inc., 
Pathology Medical Laboratories (Riordan & McKinzie), Equal Employment 
Advisory Council, and Society of Professional Benefit Administrators 
opposed requiring the employer to reinstate health coverage (or 
dependent family member coverage) when the employee failed to make 
timely premium payments. In effect, they argue, individuals who take 
FMLA leave receive preferential treatment over active employees who 
decide to drop coverage and then request reinstatement of coverage, who 
are then subject to pre-existing condition waiting periods.
    FMLA Sec. 104(a)(2) states clearly that the taking of FMLA leave 
shall not result in the loss of any employment benefit accrued prior to 
the date on which the leave commenced. To hold a returning employee to 
a requirement that he or she requalify (or possibly not qualify) for 
any benefits which were enjoyed before going on FMLA leave would result 
in the loss of an employment benefit as a result of taking the FMLA 
leave. Moreover, the employees would not be restored to an equivalent 
job with equivalent benefits upon their return from FMLA leave if they 
were made subject to pre-existing condition waiting periods. These 
results would clearly violate FMLA's statutory standards.
    The Service Employees International Union and the AFL-CIO 
recommended a provision requiring the employer to give a notice of 
delinquency to the employee when group health plan premiums are late, 
which would give the employee a reasonable opportunity to cure the 
delinquency before coverage is dropped. The Women's Legal Defense Fund 
noted that under the interim rules, an employer could stop making 
premium payments on the employee's behalf if the employee's check is 
lost in the mail. WLDF also suggested that the employer be required to 
notify the employee in writing and give the employee an additional 30 
days in which to cure the delinquency, citing regulations promulgated 
by OPM to implement Title II of FMLA as a model (5 CFR Sec. 890.502; 58 
Fed. Reg. 39607 (July 23, 1993)). The California Department of Fair 
Employment and Housing also supported a bar against discontinuing 
coverage without notice to the employee.
    The Department has decided to adopt the suggestions requiring 
notification to employees before an employer may drop group health plan 
coverage because of a lack of timely premium payments. Under the OPM 
regulations cited in the comments, the employing office must notify an 
employee if payment is not received by the due date that continuation 
of coverage depends upon receipt of premium payments within 15 days 
(longer for employees overseas) after receipt of the notice (or 60 days 
after the date of the notice if return receipt certification is not 
received by the employing office). DOL is adopting a similar 
requirement: 15 days notice must be given that coverage will cease if 
the employee's premium payment is more than 30 days late.
    Pathology Medical Laboratories (Riordan & McKinzie) suggested that 
the rule should allow insurance coverage to be cancelled retroactively 
to the first date of the period to which the unpaid premium relates. 
Fisher & Phillips, Sommer & Barnard, William M. Mercer, Inc., and 
Florida Citrus Mutual filed similar objections to the 30-day grace 
period during which group health plan coverage must be maintained. The 
California Department of Fair Employment and Housing suggested a rule 
allowing employers to discontinue coverage when an employee is more 
than one regular pay period late, as most insurance is paid in advance 
on a monthly basis and the current 30-day rule could result in 
employers having to pay two months of free coverage when the employee 
fails to make the premium payments. The State of Nevada's Department of 
Personnel said it was unclear whether the employer's obligation to 
maintain coverage, and under a self-insurance plan to pay claims, only 
extends for the 30-day grace period, contending an inequity exists for 
an employer with a self-insured plan to pay claims despite the debt 
owed by a non-returning employee while not placing the same requirement 
on an employer with a fully-insured plan. Wessels & Pautsch suggested 
that a portion of the burden for maintaining health insurance should be 
shared by [[Page 2211]] the insurance provider, e.g., qualification 
requirements or preexisting condition waiting periods could be waived 
when an employee fails to make premium payments. Credit Union National 
Association, Inc. similarly suggested that insurance companies be 
mandated to waive these requirements. The American Apparel 
Manufacturers Association, Inc. expressed concern that the rule created 
an obvious disincentive for employees to maintain their portions of 
premiums during FMLA leave, because they know their coverage must be 
maintained by the employer, and suggested that employees be held 
accountable to their employers for reasonable administrative costs 
associated with reinstating employees' health coverage as an incentive 
to the employees to continue paying their share of premiums. The 
Chamber of Commerce of the USA concurred with the 30-day grace period 
but suggested clarification that the employer (or health plan insurer) 
may hold payment of claims under the health plan until the premium 
payment is made for the coverage period to which the claim relates. 
Equal Employment Advisory Council noted that some employees elect not 
to continue health premiums while on FMLA leave, and do not always want 
coverage reinstated on the first day of return because they would 
prefer not to incur the immediate cost of premium payments. They 
recommended that benefits be reinstated on the day of return if the 
employee resumes premium payments (if applicable); and, if the employee 
does not wish to resume coverage on the day of return, the employer 
should be allowed to reinstate coverage on the date the employee 
requests such reinstatement, provided the employee satisfies all the 
normal conditions that an employee not on FMLA leave would incur when 
initiating group health plan coverage.
    As noted above, several revisions are included in the final rule in 
response to the comments received on this section. With respect to 
voluntary action by employees who elect to withdraw from their group 
health plan coverage during FMLA leave, and request reinstatement at a 
desired future date, if their decisions are truly voluntary and future 
reinstatement on the requested date is not barred by the terms of the 
plan or the employer, FMLA would not prohibit such employee-employer 
arrangements. However, the employee may not be required to requalify 
for any benefits enjoyed prior to the start of FMLA leave without 
violating the express terms of FMLA Sec. 104(a)(2).
    Under the final rule as revised, in order to drop group health plan 
coverage for an employee whose premium payment is late, the employer 
must provide written notice to the employee that the payment has not 
been received 15 days before coverage will cease. If the employer has 
established policies regarding other forms of unpaid leave that permit 
the employer to cease coverage retroactively to the first date of the 
period to which the unpaid premium relates, the employer may cease the 
employee's coverage retroactively in accordance with that policy, 
provided the 15-day notice was given. In the absence of such a policy 
applicable to other forms of unpaid leave, coverage for the employee 
ceases at the end of the 30-day grace period after the payment was due, 
again only if the required 15-day notice has been provided. The same 
rules would apply to payment of claims under self-insurance plans.
    With respect to the remaining comments on this section, the 
Department is making no further changes. FMLA regulates the maintenance 
of group health coverage by employers for periods of qualifying FMLA 
leave, but does not extend authority to DOL to enable requiring 
insurance carriers to waive provisions in their existing contracts with 
employers or to otherwise bear a portion of the burden for maintaining 
health insurance for employees who take FMLA leave. The suggestion that 
employees be held accountable to employers for reasonable 
administrative costs associated with reinstating employees' health 
coverage as an incentive for them to continue paying their share of 
premiums similarly cannot be adopted. Employees who return from FMLA 
leave are entitled to be restored to the same or an equivalent position 
with equivalent benefits. Requiring an employee to pay more for the 
same level of benefits enjoyed previously is not ``equivalent'' and 
would violate FMLA.
Recovery of Premiums (Sec. 825.213)
    FMLA Sec. 104(c)(2) allows employers in certain cases to recapture 
the premiums paid for maintaining employees' group health plan coverage 
during periods of unpaid leave under FMLA if the employees fail to 
return to work after the leave period to which the employee is entitled 
has expired. This recapture provision does not apply to ``key'' 
employees who are denied restoration under FMLA Sec. 104(b), nor to any 
employee who cannot return to work because of the continuation, 
recurrence, or onset of a serious health condition--either the 
employee's own or that of an immediate family member (spouse, child, or 
parent) for whom they are needed to care, or due to other circumstances 
beyond the control of the employee. An employer may require medical 
certification to support an employee's claim that the qualifying 
serious health condition exists. This section of the regulations 
described the statutory provisions and provided examples of other 
circumstances beyond the control of the employee. Included was a 
provision that an employee must return to work for at least 30 calendar 
days to be considered to have ``returned to work'' for purposes of this 
provision. Because the statute specifies that the recovery of premiums 
applies to ``any period of unpaid leave under Sec. 102'' when the 
circumstances permit, the rule stated that an employer may not recover 
its share of health insurance premiums for any period of FMLA leave 
covered by paid leave. Additional guidance was included in 
Sec. 825.213(f) concerning ``non-mandatory'' (i.e., other than ``group 
health plan'') benefits, e.g., life and disability insurance, in an 
effort to alert employers of the possible adverse consequences of 
allowing such ``non-mandatory'' benefits to lapse during a period of 
unpaid FMLA leave and the employer's ability to meet FMLA's requirement 
to fully restore all employment benefits (not just group health plan 
coverage) to eligible employees who return from qualifying FMLA leave.
    Several commenters took issue with the underlying statutory 
provisions discussed in this section, over which DOL has no control. 
Those comments will not be addressed.
    The ERISA Industry Committee commented that providing for employers 
to collect premiums from non-returning employees provides no practical 
benefit to employers, suggesting that alternatives be made available 
such as refundable deposits or advance payments to cover the leave 
period (advance or ``pre-'' payment was specifically prohibited by 
Sec. 825.210(b)(4) of the Interim Final Rule). Pima Federal Credit 
Union similarly viewed the rule as unrealistic--an employee normally 
cannot or will not repay and legal action by the employer creates 
destructive, unfavorable publicity and ``ill-will,'' harming employee 
morale. Loral Defense Systems--Arizona stated it is not feasible for 
most employers to recover their portions of health insurance premiums 
unless the employee voluntarily agrees to reimbursement 
arrangements. [[Page 2212]] 
    Nationsbank Corporation (Troutman Sanders) commented that the 
interim rules do not state whether an employer may use a different 
option to recover premium payments for other welfare benefits, such as 
disability insurance, than the one selected for recovering health 
premiums, or whether it must choose one option for recovering all types 
of premiums. The commenter recommended that employers be allowed 
flexibility in seeking repayment, to maximize recovery potential. The 
FMLA regulations do not restrict the employer's available options for 
recovery. For example, a repayment schedule of partial payments 
stretched over extended pay periods to account for individual 
employees' needs and compensation arrangements would not be prohibited.
    Six commenters (9 to 5, National Association of Working Women; 
Federally Employed Women; Women's Legal Defense Fund; Cumberland-Perry 
Association for Retarded Citizens; American Federation of Teachers/
National Education Association; and the Society for Human Resource 
Management) commented on the 30-day ``returned to work'' rule in this 
section. The American Federation of Teachers/National Education 
Association and the Women's Legal Defense Fund suggested a single 
workweek be used (WLDF stated that FMLA provides no basis to allow an 
employer to recover premiums when an employee returns to work for less 
than 30 days). In contrast, the Society for Human Resource Management 
said that 30 days were too short to determine whether an employee 
intends to return to work for the long term and recommended 60 days; 
Cumberland-Perry Association for Retarded Citizens also suggested 60 
days, or some other demonstration of good faith attempt to return to 
work to protect employers from manipulative employees. Federally 
Employed Women, and 9 to 5, National Association of Working Women 
stated the 30-day period had no basis under the statute and recommended 
instead language that would create a rebuttable presumption that an 
employee's failure to return is not due to a serious health condition, 
which could then be overcome by a showing that the failure was due to a 
serious health condition or other circumstances beyond the employee's 
control. (WLDF suggested similar rebuttable presumption language.)
    In spite of requests from both sides of this issue, the ``returned 
to work'' definition will remain at 30 days. As the discussion in the 
legislative history on maintenance of health benefits during FMLA leave 
suggests, the purpose of the Act is to provide ``job-protected'' leave 
to eligible employees for the reasons that qualify under the Act. Being 
restored to the original or an equivalent position of employment after 
returning from FMLA leave is central to the leave entitlement 
provisions, and suggests, in a temporal sense, long-term or ``quasi-
permanence.'' Thus, the 30-day requirement is not unreasonable. In 
addition, if an employee transfers directly from taking FMLA leave to 
retirement (or such a transfer occurs during the first 30 days after 
the employee returns to work), the employee is considered to have 
returned to work.
    The Chamber of Commerce of the USA opposed the rule that prohibits 
an employer from recovering premiums paid to maintain group health 
coverage if the employee does not return to work for reasons beyond the 
employee's control, e.g., the employee is needed to care for a relative 
or individual with a serious health condition other than an immediate 
family member. Lancaster Laboratories requested more definition of 
events that qualify as ``other circumstances beyond the employee's 
control.'' The Women's Legal Defense Fund also criticized the inclusion 
of examples in the negative, i.e., ones that do not (or can never) 
qualify as circumstances beyond the employee's control.
    Examples of ``circumstances beyond the employee's control'' have 
been clarified in the regulations. A mother's, or a father's, decision 
not to return to work to stay home with a healthy newborn child would 
not be considered a circumstance beyond the employee's control. On the 
other hand, if the newborn child has a serious health condition, such 
as serious birth defects requiring immediate surgery, a parent's 
decision not to return to work in such a case would be a circumstance 
beyond his or her control.
    Kaiser Permanente noted the regulations referred only to situations 
involving requalification for benefits, but omitted situations where an 
event covered by a particular kind of insurance occurs while the 
employee is on unpaid FMLA leave and coverage has lapsed during the 
leave. The commenter requested further consideration be given to 
explaining this aspect of FMLA. In one example given by the commenter, 
an employee is on unpaid leave and there is no continuation of life 
insurance during the leave. The commenter asked what benefits, if any, 
the beneficiary would be entitled to if the employee died during the 
leave. In the second example, disability insurance is discontinued for 
an employee who takes unpaid FMLA leave to care for a spouse or parent 
with a serious health condition and the employee becomes disabled 
during the leave. Can the employee be denied any disability coverage 
for the condition?
    Under FMLA's ``restoration to position'' employment and benefits 
protection provisions (Sec. 104 of the Act), there is no obligation to 
maintain ``non-mandatory'' (other than group health plan) benefits 
during a period of FMLA leave by operation of FMLA itself; therefore, 
an employer would not have to incur expenses or pay for the conditions 
occurring during the period of unpaid leave when coverage lapsed in the 
two examples given. However, an employer could not exclude any benefit 
previously enjoyed by the employee who returns to work after the leave. 
Accordingly, the returning employee in the second example could not be 
denied disability coverage because of any condition which arose during 
the leave and corresponding lapse of coverage. The employer would be 
responsible for providing benefits to the employee equivalent to the 
level enjoyed by the employee prior to starting the leave, regardless 
of any qualifications imposed by the plan.
    Pathology Medical Laboratories (Riordan & McKinzie) questioned the 
intent of the provision in Sec. 825.213(e) of the Interim Final Rule 
requiring a self-insured plan to provide benefits during periods in 
which the employee failed to pay the premium. In addition to being 
obligated for the payment of covered claims incurred during a period 
for which the employee paid the premiums, a self-insured plan cannot 
deny payment of claims during the applicable grace period provided by 
Sec. 825.212(a), i.e., in the absence of a specific policy for other 
forms of unpaid leave, coverage for the employee must be maintained 
during the grace period and may only cease at the end of the 30-day 
grace period (provided the required 15-day notice has been provided).
    Fisher & Phillips noted that the definition of ``employment 
benefits'' in Sec. 825.800 includes ``non-ERISA'' plans. If an employer 
makes premium payments on behalf of employees on FMLA leave who 
participate in a non-ERISA plan, the plan may be converted to ERISA 
status.
    The definition of ``employment benefits'' contained in the interim 
rule was based on FMLA's statutory definition of the same term in 
Sec. 101(5). However, as discussed above, plans meeting the specific 
criteria in Sec. 825.209(a) will be excluded from FMLA's definition of 
covered [[Page 2213]] ``employment benefits,'' to be consistent with a 
similar narrow exception followed under ERISA. Maintenance of such 
individual health insurance policies which are not considered a part of 
the employer's group health plan (as newly defined) are the sole 
responsibility of the employee, who should make necessary arrangements 
directly with the insurer for payment of premiums during periods of 
unpaid FMLA leave.
    Notwithstanding these provisions, if an employer's payment of 
health or welfare benefit premiums (as required to comply with FMLA) 
changes the plan from a non-ERISA to an ERISA-covered plan, the result 
is unavoidable in light of the statutory provisions.
    William M. Mercer, Inc. suggested that the rule specify more 
clearly that an employer's ability to recover premiums for non-health 
benefits includes both the employer and employee share, regardless of 
the reason for an employee's failure to return to work.
    An employer may elect to pay premiums continuously (to avoid a 
lapse of coverage or otherwise) for ``non-health'' benefits (e.g., life 
insurance, disability insurance, etc.). Like the provision in section 
825.212(b) regarding health benefits, this section (as restructured and 
revised for clarity) provides a new paragraph (b) that where such 
payments have been made, and the employee returns to work at the 
conclusion of leave, the employer is entitled to recover only the costs 
incurred for paying the employee's share of any premiums (regardless of 
an employee's argument that he or she did not want coverage during the 
leave). If the employee fails to return to work for any reason, the 
employer may also recover only the employee's share of any non-health 
benefit costs incurred by the employer.
Rights on Returning to Work (Sec. 825.214)
    FMLA's employment and benefits protection requires that an eligible 
employee be restored, upon return from FMLA leave, to the original 
position held by the employee when the leave commenced, or to an 
equivalent position with equivalent benefits, pay, and other terms and 
conditions of employment.
    Equal Rights Advocates recommended that the regulations interpret 
FMLA's restoration rights to require that the employer first try to 
reinstate the employee to the same position, and, only if it is not 
available, restore the employee to an ``equivalent'' position. Women 
Employed Institute and Women's Legal Defense Fund suggested that 
employers be required to notify employees no later than the last day of 
leave if an employer does not intend to restore an employee to the same 
position.
    The State of Oregon's Bureau of Labor and Industries asked if an 
employee's right to reinstatement under FMLA persists ad infinitum 
until the employee is offered an equivalent position, or if it is ever 
extinguished (e.g., where the former job has been eliminated during the 
leave and no equivalent positions are available when the employee's 
leave ends). Fisher & Phillips suggested that the regulations should 
enable an employer to deny reinstatement to a returning employee if it 
can demonstrate that the job was eliminated for business reasons 
(citing, for example, where the employee's work can be performed by 
other workers) and no other ``equivalent'' job is available for the 
employee.
    As explained in FMLA's legislative history, the standard for 
evaluating job ``equivalence'' under FMLA parallels Title VII's general 
prohibition against job discrimination (42 U.S.C. 2000e-2(a)(1)), which 
prohibits ``discriminat[ion] * * * with respect to [an employee's] 
compensation, terms, conditions, or privileges of employment,'' and is 
intended to be interpreted similarly:

    The committee recognizes that it will not always be possible for 
an employer to restore an employee to the precise position held 
before taking leave. On the other hand, employees would be greatly 
deterred from taking leave without the assurance that upon return 
from leave, they will be reinstated to a genuinely equivalent 
position. Accordingly, the bill contains an appropriately stringent 
standard for assigning employees returning from leave to jobs other 
than the precise positions which they previously held.
    First, the standard of ``equivalence''--not merely 
``comparability'' or ``similarity''--necessarily requires a 
correspondence to the duties and other terms, conditions and 
privileges of an employee's previous position. Second, the standard 
encompasses all ``terms and conditions'' of employment, not just 
those specified. (Report from the Committee on Labor and Human 
Resources (S.5), Report 103-3, January 27, 1993, p. 29.)

    Given this history, DOL lacks authority to require an employer to 
first attempt to place a returning employee in the same position from 
which the employee commenced FMLA leave, and we do not see the utility 
of imposing additional notification requirements on employers when they 
simply exercise their statutory rights to place employees in equivalent 
positions. If a position to which a returning employee is placed is 
equivalent, the employee has no right to obtain his or her original job 
back. On the other hand, as an enforcement matter, we recognize that 
restoring an employee to the same position presents strategic 
advantages to employers who attempt to meet their FMLA compliance 
objectives in this manner, because it avoids what may often become 
protracted disputes with employees over the exacting ``equivalence'' 
standards that must be applied. It should be noted, in response to the 
comments from the State of Oregon's Bureau of Labor and Industries and 
Fisher and Phillips, an employer has an obligation to place the 
employee in the same or an equivalent position even where no vacancy 
exists. The statute does not permit an employer to replace an employee 
who takes FMLA leave or restructure a position and then refuse to 
reinstate the returning employee on the ground that no position exists. 
Furthermore, an employee's acceptance of a different but allegedly 
equivalent job does not extinguish an employee's statutory rights to be 
restored to a truly equivalent job or to challenge an employer's 
placement decision. Enforcement actions may be brought within two years 
after the date of the last event constituting the alleged violation, 
unless the violation is willful, in which case a three year statute of 
limitations applies. Given the complexities involved, it may well be 
advantageous for employers to restore returning employees to their same 
positions, but it cannot be a requirement of compliance in the 
regulations. As explained elsewhere in the regulations, if, but for 
being on leave, an employee would have been laid off, the employee's 
right to reinstatement is whatever it would have been had the employee 
not been on leave when the layoff occurred. Note, too, however, that it 
is a violation of FMLA's prohibited acts (Sec. 105 of the Act) for an 
employer to discharge or otherwise discriminate against an employee for 
exercising rights under the Act. Thus, it would be a prohibited act to 
refuse to place an employee in the same position because the employee 
had taken FMLA leave. Similarly, an employer that eliminates the job of 
an employee who takes FMLA leave (for example, by redistributing the 
work to other employees) must bear the burden of establishing that the 
job would have been eliminated, and the employee would not otherwise 
have been employed at the time of restoration, if the employee had 
continued to work instead of taking the leave. (See Sec. 825.216.)
    Sommer & Barnard noted the regulations did not address an 
employers's obligation to reinstate an employee who returns to work 
before [[Page 2214]] the planned expiration of the scheduled FMLA leave 
without advance notice to the employer, and suggested a minimum of two 
business days advance notice be required of the employee in such a 
case. (See also Secs. 825.216 and 825.309.) On the one hand, an 
employee cannot be required to take more leave than is necessary to 
address the employee's FMLA need for leave (because it would not 
qualify as FMLA leave and, therefore, could not be charged against the 
employee's 12-week FMLA leave entitlement during the 12-month period). 
On the other hand, employees should be able to provide reasonable 
advance notice of changed circumstances affecting the employee's need 
for FMLA leave. The suggestion a minimum of two days advance notice be 
required has been adopted in Sec. 825.309(c). Also, an employer may 
obtain such information in periodic status reports from the employee.
    Wessels & Pautsch commented that employers who choose to 
accommodate individuals who are not protected by the ADA should not 
risk litigation by reinstating a returning employee to less than an 
equivalent position if the position offered is all that the employee 
can perform. They recommended that the final rule note that the right 
of reinstatement to the same or equivalent position is contingent upon 
the employee's continued ability to perform all of the essential 
functions of the job. (See also Sec. 825.215.) This point has been 
clarified in this section.
    The National Association of Temporary Services, in commenting on 
this section, supported adoption in the rule of a concept that 
temporary employees who find their spots filled upon return from leave 
would go to the ``head of the line'' for placement by the temporary 
help company under certain circumstances. There are limitations, 
however, in the application of this ``head of the line'' principle, 
because some circumstances of temporary help employment would require 
immediate reinstatement under FMLA. If, for legitimate business reasons 
unrelated to the taking of FMLA leave, the client of a temporary help 
company discontinues the services of the temporary help company (i.e., 
the contract under which the employee who took FMLA leave was working 
has ended), or discontinues the services formerly performed by the 
employee who took FMLA leave, and there are no available equivalent 
temporary help jobs at the same client of the temporary help company, 
then the obligation of the temporary help employer is to find an 
equivalent temporary help job to which to restore the returning 
employee at another client company. If no other equivalent positions 
are available with other clients, and if the returning employee 
typically experienced ``waits'' between jobs in the ordinary course of 
his or her employment with the temporary help placement company, then 
such an employee would be entitled to priority consideration for the 
next suitable placement with other customers. On the other hand, if the 
client is still using agency employees in the same or equivalent 
positions, the agency would be required to reinstate the employee 
immediately, even if it would be required to remove another employee. 
This concept has been clarified in Sec. 825.106 in discussing joint 
employment responsibilities of temporary help companies and their 
client firms.
    The Edison Electric Institute asked if an employer is obliged to 
hold a position open for a ``contract'' employee employed by a 
contractor if the contract was originally for a period longer than the 
employee's FMLA leave time would consume. In the Department's view the 
contractor would have the responsibility as the primary employer of the 
employee for job restoration at the conclusion of the employee's FMLA 
leave, provided the primary employer chooses to place the employee in 
that position, rather than in an equivalent position elsewhere. If the 
contract employee's services are still being provided by the contractor 
under contract to the secondary (customer or client) employer, the 
primary (contractor) employer could restore the contract employee to 
the previous contract in the same or an equivalent position. 
Furthermore, if the secondary (customer or client) employer attempted 
to interfere with or restrain the primary (contractor) employer's 
attempts to restore the contract employee to his or her previous 
position from the start of the leave, the secondary (client or 
customer) employer would be in violation of the ``prohibited acts'' 
section of the Act and regulations (see Sec. 825.220). These principles 
are discussed in Sec. 825.106.
    The College and University Personnel Association recommended that 
colleges and universities be permitted to maintain flexibility to place 
a faculty member in a temporary position without equivalent duties and 
responsibilities when the faculty member returns during a term, 
suggesting that educational institutions are unique because they work 
on the semester or quarter system and it disrupts students' education 
if a professor is brought back to teach during the term. FMLA contains 
no authority to grant the requested exception by regulation. The 
Congress addressed to some extent the special circumstances of local 
education agencies under Sec. 108 of FMLA, but chose not to include 
colleges and universities within the scope of the special rules.
Equivalent Position (Sec. 825.215)
    An equivalent position is one that is virtually identical to the 
employee's former position in terms of pay, benefits, and working 
conditions, including perquisites and status. This section of the 
regulations, which attempted to articulate the various factors that 
have an impact on meeting the statutory standards for ``equivalence'' 
under FMLA and to present interpretations through examples, generated 
numerous comments.
    Five commenters (Federally Employed Women; Women's Legal Defense 
Fund; Food & Allied Service Trades; International Brotherhood of 
Teamsters; and Service Employees International Union) objected to the 
discussion in paragraph (a) of this section that appeared to use the 
terms ``equivalent'' and ``substantially similar'' interchangeably, and 
they suggested that the regulations were confusing the applicable 
standards. The final rule has been clarified in response to these 
comments. As described in the legislative history noted above, the 
standard for evaluating job ``equivalence'' under FMLA parallels Title 
VII's general prohibition against job discrimination, and is intended 
to be interpreted in a similar manner. ``Equivalence'' necessarily 
requires a correspondence to the duties and other terms, conditions and 
privileges of an employee's previous position, which is more than mere 
``comparability'' or ``similarity.'' Moreover, the intended standard 
encompasses all ``terms and conditions'' of employment, not just those 
specified. Thus, several of these commenters objected on these grounds 
to the exclusion in paragraph (f) of ``perceived loss of potential for 
future promotional opportunities'' and ``any increased possibility of 
being subject to a future layoff'' from what was encompassed by 
``equivalent pay, benefits and working conditions'' under FMLA. As 
requested by these commenters, the final rule has been clarified to 
indicate that an equivalent position must have the same or 
substantially similar duties, conditions, responsibilities, privileges 
and status as the original position. The references to perceived loss 
of potential promotions and increased possibility of future layoff have 
been deleted from paragraph (f).
[[Page 2215]]

    Eight commenters (Burroughs Wellcome Company; Southern Electric 
International, Inc. (Troutman Sanders); California Department of Fair 
Employment and Housing; William M. Mercer, Inc.; Chamber of Commerce of 
the USA; Society for Human Resource Management; and Timber Operators 
Council) raised questions or concerns on the regulatory guidance on the 
impact of unpaid FMLA leave on various forms of incentive pay plans and 
bonuses (e.g., perfect attendance bonuses, sales bonuses based on 
calendar year productivity, and pay increases based on performance 
reviews. Bonuses for perfect attendance and safety do not require 
performance by the employee but rather contemplate the absence of 
occurrences. To the extent an employee who takes FMLA leave meets all 
the qualifications to receive these types of bonuses up to the point 
that FMLA leave begins, the employee must continue to qualify for this 
entitlement upon returning from FMLA leave. In other words, the 
employee may not be disqualified from perfect attendance, safety, or 
similar bonus(es) because of the taking of FMLA leave. (See 
Sec. 825.220 (b) and (c)). A monthly production bonus, on the other 
hand, does require performance by the employee. If the employee is on 
FMLA leave during the period for which the bonus is computed, the 
employee is not entitled to any greater consideration for the bonus 
than other employees receive while on paid or unpaid leave (as 
appropriate) during the period. Because restored employees are not 
entitled to accrue seniority during a period of FMLA leave, pay 
increases based on performance reviews conducted after 12 months of 
completed service with the employer may be delayed by the amount of 
unpaid FMLA leave an employee takes during the 12-month period (in the 
absence of policies that treat other forms of unpaid leave 
differently). In contrast, a pay increase based on annual performance 
reviews geared to an employee's ``entry on board'' anniversary date 
without regard to any unpaid leave taken during the period may not be 
denied or delayed (once the employee returns from FMLA leave) to an 
employee on FMLA leave on his or her anniversary date. The regulations 
have been clarified to include some of these principles.
    Fourteen commenters (Alabama Power Company (Balch & Bingham); 
Pathology Medical Laboratories (Riordan & McKinzie); Department of 
Personnel, City of Dallas; New Hampshire Retirement System; University 
of California; Hill & Barlow; Morris R. Friedman; Willcox & Savage; 
McCready and Keene, Inc; William M. Mercer, Inc; Government Finance 
Officers Association; National Council on Teacher Retirement; National 
Restaurant Association; and Virginia Maryland Delaware Association of 
Electric Cooperatives) expressed various views on, and requested 
clarification of, provisions included in paragraph (d)(4) of this 
section that indicated periods of FMLA leave would be treated as 
``continuous service (i.e., no break in service) for purposes of 
vesting and eligibility to participate'' in pension and other 
retirement programs. To resolve the confusion created by this 
provision, several clarifications have been included in the final rule. 
Under the FMLA, unpaid leave does not constitute service credit--except 
for purposes of ``break in service'' rules because the taking of FMLA 
leave cannot ``* * * result in the loss of any employment benefit 
accrued prior to the date on which the leave commenced'' 
(Sec. 104(a)(2)). Thus, employees will not be deemed to accrue hours of 
service during periods of unpaid FMLA leave (paid leave is counted as 
service credit). Note, in addition, however, that if any FMLA leave is 
also covered by special maternity and paternity leave plan pension 
break in service rules under ERISA, the more generous rule would apply. 
Paragraph (d)(4) of this section is clarified to reflect this position.
    Cincinnati Gas & Electric Company and Austin Human Resource 
Management Association asked that the requirement for an employee to be 
reinstated to the same or a ``geographically proximate'' worksite be 
further defined in paragraph (e)(1) of this section. In response, the 
rule is clarified to provide that a geographically proximate worksite 
is one that does not involve a significant increase in commuting time 
or distance.
    Austin Human Resource Management Association also recommended that 
the rules clarify an employer's obligation to return an employee to an 
equivalent position following FMLA leave when the employee has medical 
limitations but is not a qualified individual with a disability under 
the ADA. An employee's right to restoration under FMLA is dependent 
upon the employee's ability to perform all of the essential functions 
of the employee's position. This is now addressed in Sec. 825.214. (See 
also the discussion in Sec. 825.702.) This commenter also suggested 
that the final rule expressly state that FMLA does not affect the 
employer's right to administer a light duty return to work program for 
employees off work due to injury or illness. This is an incorrect 
interpretation of FMLA's leave entitlement provisions and cannot be 
adopted in the regulations. See the discussion in Sec. 825.702(d)(2). 
An employer may not require an employee to return to light duty. But 
the employer is not prohibited from providing a program under which an 
employee could voluntarily return to duty before he or she is able to 
perform all the essential functions of the job. In such a case, because 
an employee cannot waive his or her FMLA rights, the employee's right 
to be restored to his or her original or an equivalent position would 
continue until 12 weeks have passed in that 12-month period, including 
all FMLA leave and the light duty period for which the employee would 
otherwise have been on leave. See the revisions at Secs. 825.220 and 
825.702.
    College and University Personnel Association commented that 
Sec. 825.215(d)(2) appeared to prohibit employers from applying ``use 
it or lose it'' policies because an employee who takes FMLA leave is 
entitled to the same benefits upon return from leave as he/she was 
entitled to at the commencement of the leave, regardless of whether the 
``use it or lose it'' date has passed. The commenter considered this 
interpretation inconsistent with Sec. 825.216, which suggests an 
employee has no greater right to benefits than if the employee had been 
continuously employed during the FMLA leave. The commenter is correct 
that the FMLA extends no greater right or benefit to eligible employees 
than they would receive if they worked continuously during the FMLA 
leave. Consistent with this provision, if an employee would have 
``lost'' the benefit if the employee had been continuously employed 
instead of taking FMLA leave, the employee is not entitled to 
``retain'' the benefit simply because the employee took FMLA leave, 
regardless of whether the trigger date for ``losing it'' occurs during 
a period the employee is on FMLA leave.
    The National Association of Plumbing-Heating-Cooling Contractors 
commented that for union-affiliated employers under a collective 
bargaining agreement, an eligible employee who requests FMLA leave will 
be replaced from the hiring hall. According to the commenter, the 
employer has no authority to recall a worker back to his or her 
original position at the end of the leave. As noted in Sec. 825.700 of 
these regulations and Sec. 402 of the FMLA, the rights established for 
eligible employees by FMLA may not be diminished by any collective 
bargaining agreement or any employment benefit program or plan. 
[[Page 2216]] An employer under the circumstance described by this 
commenter would still be required to reinstate the eligible employee to 
the same or an equivalent position.
Limitations on Employer's Obligation to Reinstate (Sec. 825.216)
    Section 104(a)(3) of FMLA limits the entitlement of any restored 
employee to no greater right, benefit, or position of employment than 
any right, benefit, or position of employment to which the employee 
would have been entitled had the employee not taken the leave. An 
employer must demonstrate that the employee would not otherwise have 
been employed when reinstatement is requested to be able to deny 
restoring the employee (for example, in the case of a department-wide 
layoff affecting the employee's former position). Similarly, if a shift 
has been eliminated or overtime work has decreased, a returning 
employee would not be entitled to return to that shift or to work the 
same overtime hours as before. In addition, an employer may deny 
reinstatement to an eligible ``key'' employee if such reinstatement 
would cause substantial and grievous economic injury to the employer's 
operations and if the employer has complied with all the provisions of 
Sec. 825.217; and, an employer may delay reinstatement of an employee 
who fails to furnish a fitness for duty certificate on return to work 
in the circumstances described in Sec. 825.310, until the certificate 
is furnished.
    The National Association of Computer Consultant Business commented 
that while this section referred to the task of the project being 
completed while an employee is on FMLA leave and the loss of 
reinstatement rights in that instance, it did not refer to other 
similar limitations, such as where a position is eliminated or 
resubcontracted. The same principles would apply in these other 
instances where the position of employment no longer exists and the 
change occurs during an employee's FMLA leave. An employee's rights to 
be restored are the same as if the employee had not taken the leave. 
The employer must establish that the employee who seeks reinstatement 
would not otherwise have been employed if leave had not been taken in 
order to deny reinstatement. See also Sec. 825.312(d).
    Employers Association of New Jersey asked, where an employee would 
have been laid off during a period of FMLA leave, at what point does 
the leave end and the employee's entitlement to maintenance of group 
health benefits cease? Or, where the employer makes a bona fide 
determination that, because of reduced workforce requirements, the 
services of the employee on FMLA leave will no longer be required? 
Similarly, Alabama Power Company (Balch & Bingham) requested more 
guidance be given on department-wide downsizing while an employee is on 
leave--must the employee still be kept on leave for the remainder of 
the planned FMLA leave if he or she would have been permanently laid 
off when the downsizing occurred? Fisher and Phillips also suggested 
the regulations clarify that an eligible employee's rights to group 
health plan benefits end after the date of a layoff affecting an 
employee on FMLA leave. The National Restaurant Association suggested 
that it would be helpful if more examples were included of 
circumstances where an employee's rights to job restoration and 
maintenance of health benefits are limited.
    As explained in several sections of the regulations, an eligible 
employee under FMLA is entitled to no greater right of employment than 
if leave had not been taken. The legislative history points out that 
if, but for being on leave, an employee would have been laid off, the 
employee's right to reinstatement is whatever it would have been had 
the employee not been on leave at the time of the layoff. Thus, if an 
employee is laid off during an FMLA leave period, the employer's 
obligations to continue the employee on FMLA leave, maintain the 
employee's group health plan benefits, and restore the employee to a 
position of employment, all cease at the time the employee is laid off 
provided the employer has no such obligation under a collective 
bargaining agreement or otherwise, and the employer can demonstrate 
that the employee would not have been reinstated, reassigned, or 
transferred in the absence of the FMLA leave. This section has been so 
clarified. Note, too, however, an employer is prohibited from 
discharging or otherwise discriminating against an employee for 
exercising rights under the Act, and the employer that eliminates the 
job of an employee who takes FMLA leave (for example, by redistributing 
the work to other employees) bears the burden of establishing that the 
job would have been eliminated, and the employee would not otherwise 
have been employed by the employer, if the employee had continued to 
work instead of taking the leave. (See also the discussion of 
Sec. 825.214, above.)
    Employers Association of New Jersey also asked whether an employer 
is obligated to reinstate an employee if, during the leave, the 
employee engaged in conduct which would have resulted in discharge if 
the conduct occurred while the employee was at work. If no such 
obligation exists, may the FMLA leave and maintenance of group health 
insurance be discontinued at the point in time that the misconduct took 
place? Again, an employee on FMLA leave is entitled to no greater right 
of employment than if the leave was not taken. Provided the employer's 
policies are nondiscriminatory, are applied uniformly to similarly-
situated employees, and violate no other laws, regulations, or 
collective bargaining agreements where applicable, sanctions such as 
discharge for misconduct may continue to be applied to the employee on 
FMLA leave for actionable offenses as if the employee had continued to 
work.
``Key'' Employee Exemption (Sec. 825.217)
    FMLA provides a limited exemption from an employer's requirement to 
restore an employee to employment after FMLA leave if certain factors 
are met: (1) denial of restoration to employment (but not the taking of 
the leave) must be necessary to prevent ``substantial and grievous 
economic injury'' to the employer's operations; (2) the employer must 
notify the employee of its intent to deny restoration under this 
exemption at the time the employer determines that such grievous 
economic injury would occur; (3) if the leave has already commenced, 
the employer must allow the employee an opportunity to elect to return 
to work after receiving the notice from the employer; and (4) the 
exemption is limited to a salaried eligible employee who is among the 
highest paid 10 percent of the employer's workforce within 75 miles of 
the facility where employed. These provisions are statutory, as set 
forth in Sec. 104(b) of FMLA.
    Several commenters suggested changes that would be inconsistent 
with the statutory terms of the exemption, such as increase the ``top 
10 percent'' to ``top 25 percent'' or decrease it to ``top five 
percent,'' or guarantee reinstatement rights to women who have achieved 
the top 10 percent status despite the terms of the exemption, or limit 
applicability of the exemption to private sector employers only. The 
Department cannot adopt regulatory provisions for the exemption that 
would run counter to the terms of the statute.
    The National Association of Plumbing-Heating-Cooling Contractors 
questioned whether key employees had to be notified of their 
designation as ``key'' prior to requesting FMLA leave, suggesting that 
employers should be required to do this to prevent misunderstandings 
and abuses (e.g., at the time of being hired). Under the 
[[Page 2217]] terms of the statute, the employer must notify an 
employee ``at the time the employer determines'' that the requisite 
injury from restoration would occur. Under Sec. 825.217(c)(2), the 
determination of whether a salaried employee is among the top 10 
percent for purposes of the exemption is made at the time of a request 
for leave. Under the ``notice to employee'' provisions of 
Sec. 825.301(c)(6), the employer must inform a ``key'' employee in 
response to a request for leave whether the employee is a ``key'' 
employee, and the potential consequence that restoration may be denied 
following the leave. As provided under Sec. 825.219, if an employer 
believes reinstatement may be denied, such written notice must be 
provided to the employee at the time of the leave request, or when the 
FMLA leave commences, whichever is earlier. Failure to provide timely 
notice that the employee is a key employee and restoration may be 
denied will cause employers to lose their right to deny restoration, 
even where substantial and grievous economic injury will result from 
restoring the employee.
    The Society for Human Resource Management asked whether overtime is 
included when computing the highest paid 10 percent of the workforce, 
and how the determination is made when there is a parent company and a 
subsidiary involved. As detailed in Sec. 825.217(c)(1), the earnings 
used for this computation include wages (which includes salaries), 
premium pay (which includes ``overtime'' premium pay), incentive pay 
(e.g., commissions), and non-discretionary and discretionary bonuses. 
The definition of ``employer'' in Sec. 825.104 would control in cases 
involving a parent and subsidiary. As provided in Sec. 825.104(c), 
normally the legal entity which employs the employees is the employer, 
and a corporation is a single employer (rather than its separate 
establishments or divisions). Where one corporation has an ownership 
interest in another, it is a separate employer unless it meets the 
tests for ``integrated employer'' (Sec. 825.104(c)(2)), in which case 
all employees of the integrated employer are considered.
Substantial and Grievous Economic Injury (Sec. 825.218)
    To deny restoration to a ``key'' employee, the employer must 
establish that restoring the employee would cause ``substantial and 
grievous economic injury'' to the employer's operations. In explaining 
the conditions for applying the ``key'' employee exemption, the 
legislative history indicated, when measuring grievous economic harm, 
``* * *  a factor to be considered is the cost of losing a key employee 
if the employee chooses to take the leave, notwithstanding the 
determination that restoration will be denied.'' Numerous commenters 
(Chicago Transit Authority; Nationsbank Corporation (Troutman Sanders) 
and Southern Electric International, Inc (Troutman Sanders); Pima 
Federal Credit Union; United Federal Credit Union; Weinberg & Green; 
Wessels & Pautsch; Willcox & Savage; Credit Union National Association, 
Inc; National Association of Federal Credit Unions; and the National 
Restaurant Association) requested more specific guidelines and further 
regulatory definition of the statutory term ``substantial and grievous 
economic injury.'' One commenter (IBM Endicott/Owego Employees Federal 
Credit Union) suggested further guidance was unnecessary. The National 
Association of Federal Credit Unions noted additionally that under the 
ADA, an employer's operations suffer an ``undue hardship'' if 
accommodation to an employee would be unduly costly, extensive, 
substantial, or disruptive or would fundamentally alter the nature or 
operation of the business. This commenter suggested these same factors 
under ADA could be applied in determining whether or not an employer's 
operations would suffer ``substantial and grievous economic injury'' by 
restoring a key employee to the position. The EEOC, on the other hand, 
which administers the ADA, recommended that the FMLA rules state that 
FMLA's standard for the ``key'' employee exemption is different from 
``undue hardship'' under the ADA. The Department concurs with EEOC's 
suggestion that ``substantial and grievous economic injury'' under FMLA 
is different from ``undue hardship'' under the ADA. FMLA creates a 
narrow exception to the reinstatement rights of a key employee, whereas 
ADA's standard provides a measure of the reasonableness of any 
accommodation. Additionally, the definitions of the two terms suggest 
that ``substantial and grievous economic injury'' is more stringent 
than ``undue hardship.'' The FMLA rules define ``substantial and 
grievous economic injury'' to include ``substantial long-term injury.'' 
Undue hardship is defined as ``significant difficulty or expense'' (see 
Appendix to 29 CFR Part 1630.2(p)). Accordingly, the final rule is 
revised to clarify that the two standards are, in fact, different, and 
that FMLA's standard is more stringent than the ADA's ``undue 
hardship'' standard. Further regulatory guidelines, however, in the 
form of a more precise test, cannot be established due to the fact-
specific circumstances that must be evaluated on a case-by-case basis.
Rights of a Key Employee (Sec. 825.219)
    This section detailed the guidelines for applying the ``key'' 
employee exemption, and the requirements for employers to furnish 
proper and timely notice to ``key'' employees, informing them of the 
possibility that restoration to employment may be denied. A ``key'' 
employee must be given a reasonable period of time after receiving the 
employer's notice in which to elect whether to return to work. A key 
employee who takes leave is still eligible for maintenance of group 
health benefits, even after the employee has been notified that 
reinstatement will be denied. In those circumstances, the employer may 
not recover the premiums it paid to maintain such health benefits. An 
employee who continues on leave after receiving notice from the 
employer is still entitled to request reinstatement at the conclusion 
of the leave period, and the employer must again determine if 
substantial and grievous economic injury will result from reinstatement 
based on the facts existing at that time.
    TRW Systems Federal Credit Union, Fisher & Phillips, and the 
National Restaurant Association considered the requirements to give 
written notices to key employees as provided in the regulations to be 
excessive and duplicative. The National Association of Federal Credit 
Unions opposed the requirement for a second determination to be made, 
after a key employee has already chosen to continue the leave after 
receiving the employer's first notice that restoration will be denied. 
The Chamber of Commerce recommended that the regulations require 
written notice but not mandate a specific form of delivery (either in 
person or by certified mail). The National Restaurant Association 
considered the obligations of the employer to be so burdensome under 
the regulations as to render the exception under the Act of no 
practical value.
    After full consideration given to the comments received on this 
section, the Department continues to believe that the rule properly 
construes the rights intended by the Act for ``key'' employees; thus, 
no further modifications have been made in response to the comments. 
Section 104(b) of FMLA is intended as a narrow, limited exemption from 
the otherwise applicable restoration requirements of the Act. The 
procedural requirements set forth in the rule ensure that the standards 
for the exemption have been [[Page 2218]] properly met, i.e., based on 
facts existing at the time an employee seeks restoration to employment, 
the employer must establish that denial of restoration at that time is 
necessary to prevent substantial and grievous economic injury to the 
employer's operations.
Employee Protections and Prohibited Acts (Sec. 825.220)
    Section 105 of FMLA makes it unlawful for an employer to interfere 
with or restrain or deny the exercise of any right provided by the Act. 
It also makes it unlawful for an employer to discharge or in any other 
manner discriminate against any individual for opposing any practice 
made unlawful by the Act. This opposition clause is derived from Title 
VII of the Civil Rights Act of 1964 and is intended, according to the 
legislative history, to be construed in the same manner. Thus, FMLA 
provides the same sorts of protections to workers who oppose, protest, 
or attempt to correct alleged violations of the FMLA as are provided to 
workers under Title VII. The regulations provided that any violation of 
the FMLA or its implementing regulations would constitute interfering 
with, restraining, or denying the exercise of rights under the Act. 
``Interfering with'' the exercise of rights was defined to include not 
only denying authorization for or discouraging an employee to take FMLA 
leave, but manipulation by the employer to avoid responsibilities (such 
as unnecessarily transferring employees among worksites to avoid the 
50-employee threshold for employees' eligibility). FMLA's anti-
discrimination provisions were interpreted in the Interim Final Rule to 
prohibit an employer from requiring more of an employee who took FMLA 
leave than the employer requires of employees who take other forms of 
paid or unpaid leave (e.g., requirements to furnish written notice or 
certification for use of leave). Also, employers were prohibited from 
considering an employee's use of FMLA leave as a negative factor in any 
employment actions (e.g., promotions or discipline), and specifically 
in connection with ``no fault'' attendance policies. Finally, the 
regulations expressed DOL's view that employees cannot waive their 
rights under FMLA, nor can employers induce employees to waive their 
FMLA rights.
    Ten commenters (Consolidated Edison Company of New York, Inc.; 
Dopaco, Inc.; Red Dot Corporation; Tax Collector, Palm Beach County, 
Florida; Austin Human Resource Management Association; Equal Employment 
Advisory Council; Florida Citrus Mutual; Food Marketing Institute; 
Greater Cincinnati Chamber of Commerce (Taft Stettinius Hollister); and 
the Society for Human Resource Management) opposed the prohibitions 
against counting FMLA-protected leaves of absence in disciplinary 
actions and under employers' attendance control policies. Some felt 
that FMLA should not invalidate legitimate attendance control programs, 
which are objective and nondiscriminatory as to the reason for a given 
absence, or that reasonable attendance requirements should still be 
available to employers and remain within their prerogatives as a 
condition of continued employment. Some asked whether a distinction 
could be made between counting FMLA absences negatively for purposes of 
discipline or other adverse action, and counting them under attendance 
programs that reward employees for good attendance (e.g., attendance 
bonus programs). It was argued that employers should still be allowed 
to reward employees positively for perfect attendance, and be permitted 
to exclude an employee from such an attendance award if the employee's 
FMLA absence makes him or her ineligible.
    Employers pay bonuses in different forms to employees for job-
related performance such as for perfect attendance, safety (absence of 
injuries or accidents on the job), and exceeding production goals. 
Bonuses for perfect attendance and safety do not require performance by 
the employee, but rather contemplate the absence of occurrences. To the 
extent an employee who takes FMLA leave meets all the requirements for 
these types of bonuses (which contemplate the absence of an event) 
before the FMLA leave begins, the employee is entitled to continue this 
accrued entitlement upon the employee's return from FMLA leave (the 
taking of FMLA leave cannot ``* * * result in the loss of any 
employment benefit accrued prior to the date on which the leave 
commenced''). Thus, the employee may not be disqualified for such 
bonus(es) merely because the employee took FMLA leave during the 
period; to do so would discriminate against the employee for taking 
FMLA leave. A monthly production bonus, on the other hand, does require 
performance by the employee during the period of production. If the 
employee is on FMLA leave during the period for which the bonus is 
computed, the employee may be excluded from consideration for the 
bonus. These principles are discussed in new Sec. 825.215(c)(2).
    Nationsbank Corporation (Troutman Sanders) observed that the courts 
in recent years have found that some employees have abused or 
illegitimately sought the protection of anti-discrimination statutes to 
avoid legitimate discipline, and that the courts and some 
administrative agencies (including DOL) have developed decision rules 
to bar such use of the law by employees. The commenter recommended that 
DOL explicitly prohibit employee abuse or misuse of FMLA and include 
sanctions for such misconduct (e.g., discharge, payment of attorneys' 
fees or other costs).
    Sections 825.216 and 825.312 discuss at some length, as noted 
repeatedly throughout this preamble, that FMLA does not entitle any 
employee to any right, benefit, or position of employment other than 
any right, benefit, or position of employment to which the employee 
would have been entitled if the employee had not taken leave under the 
FMLA. Thus, FMLA cannot be used by employees as a ``shield'' to avoid 
legitimate discipline. As this basic tenet flows from FMLA's statutory 
provisions which have already been addressed in the regulations, it is 
unnecessary to include the particular suggested provisions to respond 
to these concerns.
    Nationsbank Corporation (Troutman Sanders), Southern Electric 
International, Inc (Troutman Sanders), and Chamber of Commerce of the 
USA expressed concerns with the ``no waiver of rights'' provisions 
included in paragraph (d) of this section. They recommended explicit 
allowance of waivers and releases in connection with settlement of FMLA 
claims and as part of a severance package (as allowed under Title VII 
and ADEA claims, for example). The ERISA Industry Committee raised a 
similar concern with respect to the rule's impact on early retirement 
windows offered by employers. Such windows are typically open for a 
limited period of time and require all employees accepting the offer to 
be off the payroll by a certain date. If employees on FMLA leave have 
the right to participate in an early retirement program, but may 
continue to have and assert leave rights, the leave rights could 
adversely affect administration of the early retirement program.
    The Department has given careful consideration to the comments 
received on this section and has concluded that prohibitions against 
employees waiving their rights and employers inducing employees to 
waive their rights constitute sound public policy under the FMLA, as is 
also the case under other labor standards statutes such as the FLSA. 
This does not prevent an individual employee on unpaid leave 
[[Page 2219]] from returning to work quickly by accepting a ``light 
duty'' or different assignment. Accordingly, the final rule is revised 
to allow for an employee's voluntary and uncoerced acceptance of a 
``light duty'' assignment. An employee's right to restoration to the 
same or an equivalent position would continue until 12 weeks have 
passed, including all periods of FMLA leave and the ``light duty'' 
period. In this connection, see also Sec. 825.702(d).
    With respect to early-out windows for retirement purposes, an 
employee on FMLA leave may be required to give up his or her remaining 
FMLA leave entitlement to take an early-out offer from the employer. 
Under these circumstances, FMLA rights would cease because the 
employment relationship ceases, and the employee would not otherwise 
have continued employment. Further, although an employer need not 
extend the window for those employees who are out on FMLA leave, the 
employer must afford such employees the opportunity to avail themselves 
of any such offer which would have been available if they had not been 
on leave.
    Florida Citrus Mutual and Fisher & Phillips took issue with the 
prohibition against an employer manipulating the size of the workforce 
for the purpose of precluding employee eligibility for FMLA leave. They 
suggested that employers cannot ``interfere'' with the rights of 
employees unless and until the employees have those rights.
    We disagree with the views expressed in these comments. It is DOL's 
view that a covered employer that engages in the manipulative behavior 
prohibited by the regulatory provisions is depriving employees of 
rights and entitlements they would otherwise fully enjoy but for the 
manipulative actions by the covered employer, which is expressly 
prohibited. The rule is clarified to state that employers covered by 
the FMLA may not engage in such manipulation of the workforce for the 
purpose of avoiding FMLA obligations.
    The California Department of Fair Employment and Housing 
recommended revisions to paragraph (c) of this section to reference the 
consequences of an employer asking a job applicant or the former 
employer of a job applicant questions which would reveal the employee's 
use of FMLA leave, and the consequences of making hiring decisions 
based on the use of FMLA leave. It was suggested that if hiring 
decisions are among the employment actions for which use of FMLA leave 
may not be a negative factor, then the regulations should incorporate 
guidance in this area. A reference to ``prospective employees'' has 
been included in paragraph (c) of this section.

III. Subpart C, Secs. 825.300-825.312

Posting Requirements (Sec. 825.300)
    Twenty commenters took exception to the regulatory requirement 
regarding the size of the notice (poster). They felt it was unnecessary 
and did not provide any substantive benefit to employees.
    The Department has determined that it will not prescribe the 
precise size of the required poster. The regulation requires instead 
that the poster be large enough to be easily read. This requirement 
would be satisfied, for example, if the poster were at least the size 
of a standard 8\1/2\ x 11 inch piece of paper. The purpose of the 
poster is to call employees' attention to the basic requirements of 
FMLA and provide information where they may get additional information 
or file a complaint. In the past several years a number of commercial 
firms have reproduced other posters, having a number of posters in a 
single set or on a single display, and much of the information is not 
legible from any reasonable distance. If the poster does not inform, it 
serves no useful purpose.
    Two commenters objected to having a provision in the regulation 
that allowed employees to circumvent their notice obligations to the 
employer if the employer failed to post the notice. The purpose of this 
provision is to encourage employers to post the notice; otherwise, how 
would employees know about FMLA and their basic rights and where to 
obtain additional information? The posting requirement is not difficult 
or overly burdensome for an employer, as the Department will furnish, 
free of charge, a copy of the poster which the employer may duplicate. 
The Department finds no basis to remove this provision from the Final 
Rule.
    The Employers Association of Western Massachusetts, Inc., commented 
that references to applicants for employment should be deleted from the 
regulation as the statute applies only to eligible employees.
    The statute, at Sec. 109(a), requires the notice to be posted in 
conspicuous places on the premises where notices to employees and 
applicants for employment are customarily posted. The prohibited acts 
identified by the statute in Sec. 105 state that it is unlawful for an 
employer and/or any person to interfere with rights or discriminate 
against any individual. Clearly the prohibited acts are not limited in 
application to eligible employees. The Department is unable to make 
this change as it conflicts with the statutory language.
    The Society for Human Resources Management asked if a contractor 
who has employees working at multiple sites of other employers is 
required to post the notice at each site when the employer who controls 
the site has already posted the notice. The contractor should ensure 
that a notice is posted in a conspicuous place on the worksite where 
his/her employees have access. If so, there is no need for the 
contractor to post additional notices.
    The Tennessee Association of Business asked if posting the notice 
satisfies all notice requirements of the Act. The posting of the notice 
is but one of the notice requirements applicable to employers. For 
example, in Sec. 825.301(b) the employer is required to provide written 
notice to an employee who provides notice of the need for FMLA leave 
regarding eight essential elements of information that are employee-
specific. There are a number of other notice provisions throughout the 
regulations.
Other Employer Notices (Sec. 825.301)
    Four commenters made observations regarding the requirements of 
Sec. 825.301(a) for employers to include their policies regarding the 
taking of FMLA leave in employee handbooks, if they have such a 
publication. One commenter asked for the deadline by which the FMLA 
provisions should be included. Another objected to any requirement to 
include the process to file a complaint and advising employees of their 
right to file suit. Yet another urged the Department to provide an 
acceptable statement to be included in the employee handbook regarding 
FMLA. One commenter urged that this requirement be satisfied if the 
employer incorporated the Department's FMLA Fact Sheet in the handbook.
    It was the intent of the regulations that if an employer provides a 
handbook of employer policies, the employer's FMLA policies would be 
included in the handbook by the effective date of FMLA. There is no 
requirement that an employer include information regarding filing 
complaints or private rights of action. The purpose of this provision 
is to provide employees the opportunity to learn from their employers 
of the manner in which that employer intends to implement FMLA and what 
company policies and procedures are applicable so that employees may 
make FMLA plans fully aware of their rights and obligations. It was 
anticipated that to some large degree these policies would be peculiar 
to that employer. Consequently, it would be of little use 
[[Page 2220]] to incorporate the Department's Fact Sheet or a 
Departmental statement in the employer's handbook for employees.
    Seven commenters stated that the notice requirements in 
Sec. 825.301(c) are burdensome, not required by the statute and should 
be deleted from the regulations. One commenter urged that the notice 
required by this section should include the consequences of employees 
failing to give 30 days notice when leave is foreseeable. Three 
additional commenters urged there be one generic notice applicable to 
all employees except key employees.
    The intent of this notice requirement is to insure employees 
receive the information necessary to enable them to take FMLA leave. 
The employee is entitled to know the arrangements for payment of health 
insurance premiums reached by agreement with the employer, whether the 
employee will be required to provide medical certification for leave or 
fitness to return to duty, etc. It would be inappropriate to use a 
generic notice as much of the information may be employee specific, 
particularly the arrangements for payment of insurance co-payments. The 
regulation suggests employers provide information to employees 
regarding consequences of inaction. There is nothing in the regulation 
that precludes the employer from providing more information than 
required, only from providing less. The Department finds no basis to 
change the requirements of this notice provision.
    Three commenters objected to a requirement that a notice be 
provided each time an employee takes leave, especially when the 
employee is taking leave intermittently.
    The regulation has been amended to provide that in most 
circumstances notice need only be given once in each six- month period, 
on the occasion of the first employee notice of the need for leave. 
However, if the specific information required to be furnished in the 
notice changes, notice of the changed information must be provided in 
response to a subsequent notice of need for leave. In addition, an 
employer will be required to give notice of a requirement for medical 
certification, or for a ``fitness-for-duty'' report upon the employee's 
return to work, each time the employer receives notice of a need for 
FMLA-qualifying leave. An exception will exist, however, if the notice 
given at the beginning of the six-month period, as well as any employee 
handbooks or other written documents regarding the employer's leave 
policies, make it clear that medical certification or a ``fitness-for-
duty'' report will be required under the circumstances of the 
employee's leave. For example, the prior notice and handbook (if any) 
might state that certification will be required for all sick leave of 
any kind, for all unpaid sick leave, or for all sick leave longer than 
a specified period. Similarly, the notice and handbook might state that 
``fitness-for-duty'' reports will be required for all employees with 
back injuries in a certain occupation.
    The Women Employed Institute urged that the notice required by 
Sec. 825.301(c) be in writing and that the notice should be furnished 
to the employee no later than the day before leave is to begin if leave 
is foreseeable or as soon as practicable if not foreseen.
    The regulation has been changed to make it clear that the notice 
must be in writing. The interim final rule required the employer to 
provide the notice at the time notice of need for leave is provided. 
The Final Rule will require such notice to be provided as soon after 
notice of need for leave is given as practicable, usually one or two 
business days. The requirement for written notice simply ensures that 
the employee receives critical information and provides appropriate 
documentation of the information conveyed to the employee in the event 
of a dispute.
    The Church of Jesus Christ of Latter-Day Saints commented that an 
employer should still be permitted to count an absence as FMLA leave 
even if an employee (who may be too ill) has not requested FMLA leave 
for the absence. An example was provided of an employee who has a heart 
attack and misses five weeks from work but does not request FMLA leave. 
The Church further observes that providing the employee with the 
required notice when the employee is so ill would be uncaring.
    The regulations have been revised to permit the employer to mail 
the notice to the employee's address of record if leave has already 
begun. The regulations also provide that notice of need for leave may 
be given by the employee's spokesperson, (e.g., spouse, adult relative, 
attorney, doctor).
    The California Department of Fair Employment and Housing comments 
that the regulations should be more specific regarding the obligations 
of covered employers who have no eligible employees. Section 825.500 of 
the Final Rule has been revised to specify the obligations of covered 
employers who have no eligible employees.
    The regulation has also been revised to make it clear that if an 
employer fails to provide the required information, it may not take 
action against an employee for failure to comply with the employee's 
obligations required to be set forth in the notice.
Employee Notices (to Employers) When Leave is Foreseeable 
(Sec. 825.302)
    Four commenters suggested that it be made clear that the employee 
is required to give notice of need for FMLA leave to the employee's 
supervisor or other appropriate person, and need not make the request 
to some top official of the company.
    The employee is required to provide notice of need to take FMLA 
leave to the same person(s) within the company the employee ordinarily 
contacts to request other forms of leave, usually the employee's 
supervisor. It is the responsibility of the supervisor either to refer 
the employee who needs FMLA leave to the appropriate person, or to 
alert that person to the employee's notice. Once the employee has 
provided notice to the supervisor or other appropriate person in the 
usual manner, the employee's obligation to provide notice of the need 
for FMLA leave has been fulfilled.
    The Nationsbank Corporation requested guidance as to the 
circumstances in which an employer may choose to waive notice 
requirements. Throughout the regulations, reference is made to the 
employer's ability to waive notice and certification requirements. As 
long as the employer's discretion is applied in a nondiscriminatory 
manner, the employer will have complied with these requirements.
    Fisher and Phillips observed that the regulations do not address 
the employee's obligation to provide notice of any needed extension to 
leave already requested and underway. Sommer and Barnard also took 
issue with the notice requirements regarding an extension of leave, and 
suggested that the regulations should be amended to provide that an 
employee on FMLA leave who fails to report to work at the expiration of 
the leave and fails to give FMLA notice of the need for extension of 
the leave prior to its expiration shall not be entitled to the job 
restoration protections of the Act or the regulations, unless it was 
impossible to give such notice prior to expiration of the leave and the 
employee thereafter gives the earliest and best notice possible. The 
regulation has been amended in Sec. 825.309(c) to provide that an 
employee shall advise the employer if leave needs to be extended. In 
addition, the employer may obtain such information from employees 
through status reports.
    Section 825.302(g) has also been revised to clarify employee notice 
obligations when the employer's paid [[Page 2221]] leave plan contains 
lesser obligations and paid leave is substituted for unpaid FMLA leave. 
An employer may not impose FMLA's stricter notice requirements if the 
employer's applicable leave plan allows less advance notice for the 
type of leave being substituted. See, also, Sec. 825.207(h).
    The Department also notes that the regulations continue to provide 
that although an employee is only required by FMLA to give oral notice 
of the need for leave, an employer may require an employee to comply 
with its usual and customary notice requirements, including a 
requirement of written notice. If an employee fails to give written 
notice in these circumstances, an employer may not deny or delay leave, 
but may take appropriate disciplinary action.
Employee Notices (to Employer) When Leave is Not Foreseeable 
(Sec. 825.303)
    The Women's Legal Defense Fund suggested that section (a) be 
amended to reflect that an employee may not be foreclosed from 
beginning leave even if one or two days' notice is not possible. The 
final rule has been amended to include guidance that notice should be 
given as soon as practicable.
    Two commenters indicated that verbal notice is not sufficient and 
the employer should be permitted to require a written notice, 
requesting leave and providing a general reason for the leave if FMLA. 
They suggested that if an employee needs to request the leave in an 
emergency, oral notice should be sufficient but only if the employee 
confirms that request in writing within two working days.
    Nothing in the regulations prohibits an employer from requiring 
written notice to take or request leave if this is the employer's usual 
procedure. The employer may request written notice for all leave. The 
employer, however, may not deny or delay FMLA-qualifying leave when the 
employee provides verbal notice as soon as practicable. Having a hard 
and fast rule that the employee must give written notice or confirm the 
verbal notification within one or two working days would work an 
unnecessary hardship on many employees who have taken leave for a 
medical emergency and are not in a position to provide written notice 
either due to their own serious health condition, or that of an 
immediate family member.
Employer's Recourse When Employee Fails To Provide Notice 
(Sec. 825.304)
    Seven commenters provided observations regarding this section. Four 
of the commenters urged that an employer not be permitted to deny leave 
under any circumstances when the employee fails to provide adequate 
notice, but only delay the leave. They further stated that the employer 
should be permitted to delay the leave only if the employer can show 
that the activities of the business were prejudiced by the employee's 
failure to provide adequate notice. They questioned the extent of an 
employer's right to take disciplinary action in the event adequate 
notice is not provided and urged that the employer be prohibited from 
denying leave or discharging the employee for inadequate notice. One 
commenter asked for a definition of the term as soon as practicable.
    Section 102(e) of the statute sets out obligations of the employee 
to provide notice to the employer of the need to take leave in both 
foreseeable and unforeseeable circumstances. As this is an affirmative 
responsibility of the employee it would be inappropriate to require the 
employer to show any prejudice resulting from an employee's failure to 
provide adequate notice. As used in the regulation, as soon as 
practicable is further explained as within one or two business days 
unless that is not feasible. The regulation is revised to provide that 
an employer may delay (rather than deny) leave where required notice 
has not been given.
Medical Certification of Serious Health Conditions (Sec. 825.305)
    The Community Legal Services, Inc. commented that low income 
workers may be unable to persuade health care providers to provide 
medical certifications. They urge an exception for such workers if 
obtaining the certification is not practicable under the particular 
circumstances despite the employee's diligent, good faith efforts, and 
a similar exception that would excuse a person's inability to produce a 
certification or all the information requested by the employer because 
of non-cooperation by the health care provider. If an employee under 
these circumstances is unable to provide a complete certification, the 
employer could request a second opinion at the employer's expense, they 
suggest. Further, any employer that requires a certification should 
provide a copy to the employee.
    The provision for medical certification at the request of the 
employer is a basic qualification for FMLA leave. It is the employee's 
responsibility to provide such certification. The Final Rule has been 
amended in Sec. 825.311(b) to provide that if an employee never 
produces the requested certification, the leave is not FMLA leave. It 
is the employee's responsibility to find a health care provider that 
will provide a complete certification. As the employee is providing the 
certification to the employer, if the employee wishes to have a copy 
he/she may make a copy before submission to the employer. The 
regulation has been amended to provide for copies of a second or third 
opinion to be provided by the employer to the employee upon the 
employee's request.
    Eight commenters observed that providing a minimum of 15 days for 
the employee to provide medical certification is unreasonable. In some 
cases the certification would not be provided until the leave is over 
if the leave is only for a short period of time, and the employee would 
have returned to work, thereby denying the employer the opportunity to 
obtain second and third opinions where appropriate and designating the 
leave as FMLA leave after the employee has returned to work. Several 
alternatives were proposed, from allowing the employer to define an 
acceptable time frame to allowing only one week to provide the 
certification.
    The regulations have been amended in Sec. 825.305(a)(2) to track 
the statute more closely. Ordinarily, when leave is foreseeable and at 
least 30 days notice has been provided, the employee should provide the 
medical certification before the commencement of leave. If the need for 
leave does not allow for this, the employee should provide the 
certification within the time frames established by the employer for 
submission of the certification, which must allow at least 15 days 
after the employer's request. Section 825.208 of the regulations has 
been amended to enable the employer to make a preliminary designation 
of leave when the certification was not provided prior to the 
commencement of leave, or the employer is awaiting a second or third 
opinion, and to confirm or withdraw the designation depending upon the 
results of the medical opinions even though the employee has returned 
to work. The Department believes that the requirement to provide the 
certification in no less than 15 days is reasonable as the employee has 
no control over the timing of the health care provider's completion of 
the certification form.
    Two law firms, Fisher and Phillips and Sommer and Barnard, observed 
the regulations are silent regarding time frames for submission of 
recertifications. Section 825.308 has been amended to clarify that 
recertifications are subject to the same [[Page 2222]] 15-day time 
frames as the original certification.
    Section 825.305(e) has also been revised to clarify the 
certification requirements when the employer's paid leave plan contains 
lesser obligations and paid leave is substituted for unpaid FMLA leave. 
If the employer's sick or medical leave plan contains less stringent 
certification requirements than those of FMLA, and paid sick, vacation, 
personal or family leave is substituted for unpaid FMLA leave as 
provided in Sec. 825.207, only the employer's less stringent sick leave 
certification requirements may be imposed. See, also, Sec. 825.207(h).
Information Required in Medical Certifications (Sec. 825.306)
    Ten commenters questioned the necessity for the health care 
provider to provide a diagnosis when providing a medical certification 
of the existence of a serious health condition, and suggested that 
providing appropriate medical facts is sufficient for this purpose. The 
Women's Legal Defense Fund comments were reasonably representative of 
these commenters. They observed that the optional certification form 
provides more information to the employer than statutorily required 
(for example, diagnosis and regimen of treatment), and that inquiries 
regarding such matters may be a violation of the ADA. They noted that 
health care providers may be reluctant to provide detailed medical 
information due to ethical and privacy concerns, and expressed concerns 
regarding confidentiality and employee waivers. They recommended that 
the form include space for an employee signature which would provide a 
limited waiver from the employee to release the information to the 
employer for purposes of FMLA leave only.
    Other commenters questioned the absence of a box to check on the 
form to indicate that an employee has been prescribed medicine, an 
indication of continuing treatment under the Interim Final Rule. The 
Hyman Construction Co. observed that it would be helpful if the form 
provided space for the health care provider's address and telephone 
number. Still others wanted the health care provider's Employer 
Identification Number and Social Security Number.
    After a review of these comments, and significant revisions to the 
definition of ``serious health condition'' in Sec. 825.114 of the 
regulations, this section and Form WH-380 have been completely revised. 
In general, the purpose of the revisions is to allow employers to 
obtain information from a health care provider to verify that an 
employee in fact has a serious health condition, and the likely periods 
of absence by the employee, but no unnecessary information. The form 
has been revised, for example, to require certification as to which 
aspect of the definition applies, and to state the medical facts to 
support the definition. The regulation and form no longer provide for 
diagnosis, and make clear, consistent with the ADA and privacy 
concerns, that all information on the form relates only to the 
condition for which the employee is taking FMLA leave. However, it is 
considered necessary to include information regarding the regimen of 
treatment in general terms (e.g., prescription drugs) since this is one 
of the specific requirements of a serious health condition under 
Sec. 825.114(a)(2)(i)(B).
    The suggestion that the health care provider be required to furnish 
an Employer Identification Number and/or Social Security Number has not 
been adopted. The optional medical certification form is not a 
substitute for an insurance claims form; its use is intended for 
purposes of confirming the existence of a serious health condition, and 
thus the need for FMLA leave. The information provided by the form is 
required to be kept confidential by the employer and it would be 
inappropriate for the employer to place this form into the ordinary 
business process for insurance claims.
    The Department has not adopted the suggestion that a waiver by the 
employee is necessary for FMLA purposes. The process provides for the 
health care provider to release the information to the patient 
(employee or family member). The employee then releases the information 
(form) to the employer. There should be no concern regarding ethical or 
confidential considerations, as the health care provider's release is 
to the patient. The employee may choose to withhold the certification 
from the employer. In so doing, however, the opportunity to take FMLA 
leave is sacrificed, but that would be the employee's decision. In the 
more than 12 months that have elapsed since the Interim Final Rule 
became effective, the Department has received no feedback that the 
absence of an employee waiver on the optional medical certification 
form has created any difficulty for the health care community, 
employers, or employees.
    The Equal Employment Opportunity Commission provided comments 
regarding the medical certification process. EEOC suggested that 
questions 5 and 6 of the form are too broad. Question 5 asks for the 
probable duration of a condition. EEOC recommended the question be 
revised to ask the probable duration of the condition for which the 
leave is requested, and suggested Question 6 is overly broad for the 
same reason, i.e., asking about the regimen of treatment to be 
prescribed. Question 5 has been revised. Question 6 has not been 
deleted because the information is necessary to determine if a serious 
health condition exists. However, the form makes clear that all 
information relates to the condition for which leave is needed.
    The Burroughs Wellcome Company and Joan L. Kalafatas observed that 
sometimes employers need other medical information for purposes other 
than FMLA leave, and suggested that the FMLA regulations indicate that 
other information may be requested although it may not be used to make 
decisions required under FMLA. The Department disagrees with this 
comment. If the employer needs medical information for some other 
purpose, the employer needs to make an additional, perhaps 
simultaneous, request.
    Massmutual Life Insurance Company recommends an employer with a 
paid leave program be allowed to use a single certification form for 
FMLA and paid leave purposes, asking that the form be permitted to 
include information in addition to that identified by the FMLA 
regulations only if the additional information would be used to verify 
eligibility for paid leave. It would not be appropriate to permit 
employers to request additional medical information to support an 
employee's desire to substitute accrued paid leave for FMLA leave. The 
regulations provide that any such requirements may not be more 
stringent than those required by FMLA. If the commenter is referring to 
eligibility for benefit plans rather than paid leave, the Department 
has included a provision in the Final Rule that if an employee must 
meet higher standards to qualify for payments from an employee benefit 
plan, e.g., a disability benefit plan, the employee is required to 
comply with the requirements of the benefit plan in order to receive 
payments. The employee may choose not to meet the higher standards of 
the benefit plan and thereby not receive payments from the plan; 
however, the employee continues to be entitled to FMLA leave. Section 
825.207(d) has been amended to incorporate this guidance.
    The California Department of Fair Employment and Housing urged that 
Sec. 825.306(b) be amended to reflect that collection of this 
information by the employer is discretionary and that it is appropriate 
for the employer to comply [[Page 2223]] with State or local law. 
California law does not permit an employer to require that the medical 
certification specify the serious health condition which led to the 
leave request. Section 825.701 of the regulations provides guidance to 
employers regarding the responsibility to comply with applicable State 
statutes. If the provisions of the State statute are more beneficial to 
the employee or more restrictive in terms of the rights of the employer 
(such as by prohibiting a requirement that more medical information be 
required), the employer must comply with that State statute.
    The law firm of Fisher and Phillips contended that the provision 
that employers may use another type of medical certification only if no 
additional information is required is not supported by FMLA 
Sec. 104(c)(3). The Department disagrees, with one exception. The 
provisions of Sec. 104(c)(3) relate to the circumstances when an 
employee is unable to return from FMLA leave due to the onset or 
continuation of a serious health condition. The information required by 
this section of the statute and the regulations is the maximum which 
can be requested. Nothing in Sec. 104(c)(3) implies that an employer 
may ask for more information than is required by Sec. 825.306. Section 
825.207(d) has been amended to permit the employer to request a greater 
amount of information if required in order for an employee to qualify 
for payments from an employer benefit plan, or in the event the 
employee is on a worker's compensation absence and the applicable 
worker's compensation statute permits the employer to acquire 
additional information.
    Michael Meaney suggested that certification of a disability should 
be strictly limited to medical doctors (M.D.s). The Department is 
unable to adopt this suggestion in light of the guidance provided by 
the Congress and the Department's deliberations over the definition of 
a health care provider. For example, FMLA's legislative history 
indicates clear Congressional intent that Christian Science 
Practitioners be included in the definition of health care provider. 
These individuals are clearly not M.D.s. In considering the types of 
health care providers available to the general population, particularly 
those who live in rural areas which do not have ready access to a 
doctor (MD), but regularly rely on nurse practitioners and midwives, 
the Department concluded that it is appropriate to include these 
professions in the definition of a health care provider. Rather than 
further limit the definition of a health care provider in Sec. 825.118 
of the regulations, the Final Rule expands the practitioners that may 
qualify as health care providers.
    This section has also been revised to clarify the certification 
requirements when the employer's paid leave plan contains lesser 
obligations. Only the employer's lesser certification requirements may 
be imposed when paid leave is substituted for FMLA leave, as provided 
in Sec. 825.306(c). See also Sec. 825.207(h).
Adequacy of Medical Certification (Sec. 835.307)
    Six commenters (four working women advocacy groups and two unions) 
urged that when an employer requires a second or third medical opinion, 
not only the costs of obtaining the opinion by the health care provider 
be at the employer's expense, but because the employee is expending 
time at the employer's direction, the employer should also be required 
to pay the employee for the time spent in acquiring the required 
medical opinions. The Department has considered these comments 
carefully but has concluded that Congress did not intend that employees 
on unpaid FMLA leave be paid for the time spent obtaining second and 
third medical opinions. Section 825.307(d) has been amended, however, 
to make it clear that an employer must in all cases reimburse an 
employee or family member for any reasonable ``out-of-pocket'' travel 
expenses incurred in obtaining the required second and third opinions.
    The Equal Rights Advocates requested an exception be provided where 
obtaining the second or third opinion for an immediate family member 
would be onerous. Further, they suggest that when the employer requires 
a second or third medical opinion and the employee's leave has already 
begun, the employee should be allowed to continue on leave and the 
employer should be restrained from demanding reimbursement for 
insurance premiums. If the third opinion disputes the original medical 
certification, the employee may be required to return to work; the 
employer may not take any unfavorable action against the employee; the 
employer shall not be entitled to reimbursement for insurance premiums 
paid during the leave; and, the employee's FMLA leave entitlement shall 
be reduced by the period of leave actually taken.
    The third medical opinion becomes necessary only when the second 
opinion disagrees with the original opinion. In the suggestion, the 
third opinion now agrees with the second, which means that either the 
employee or the employee's family member does not or did not have a 
serious health condition. If a serious health condition did not exist, 
the employee was not entitled to take any FMLA leave, as the absence 
was not for an FMLA reason. Thus, the employer is prohibited from 
charging or deducting the time of the absence from the employee's FMLA 
leave entitlement, and the employee does not have the rights and 
protections of the statute for that absence. The Department is unable 
to incorporate this suggestion in the regulations. The Department 
agrees, however, that pending the ultimate resolution of the employee's 
entitlement to leave through the certification process, the employee is 
provisionally entitled to the benefits of the Act, including 
maintenance of group health benefits. If the certifications do not 
ultimately establish the employee's entitlement to FMLA leave, the 
leave will not be counted as FMLA-qualifying and may be treated as paid 
or unpaid leave under the employer's established leave policies. This 
section is so revised.
    The Equal Rights Advocates further suggest that the second and 
third medical opinion should only be allowed if it is not unduly 
burdensome to the family member. The right of the employer to require a 
second medical opinion when the employer has reason to question the 
validity of the original medical certification is statutory. 
Consequently, the employer is entitled to the second opinion, and the 
third opinion if the second opinion disagrees with the original 
opinion. The alternative is for the employee to forego FMLA leave. 
However, Sec. 825.307 has been amended to provide that an employer may 
not ordinarily require an employee to travel outside normal commuting 
distances in obtaining the required opinions.
    The Women Employed Institute and Women's Legal Defense Fund suggest 
that when an employer requires a second or third medical opinion, the 
employee should be provided a copy of the results. The Department 
agrees and has added Sec. 825.307(c)(1) to require the employer, upon 
request from the employee, to provide copies within two business days.
    Nineteen commenters commented on the provision that prohibits an 
employer from obtaining a second medical opinion from a health care 
provider that the employer employs or regularly utilizes. Several of 
the commenters are large hospital facilities or Health Maintenance 
Organizations (HMOs) who have large numbers of doctors either on the 
payroll or with whom they regularly contract to provide medical care to 
their patients. Kaiser Permanente [[Page 2224]] suggested that only 
those health care providers whom the employer regularly employs to 
provide employee medical exams be excluded. Kennedy Memorial Hospitals 
suggested the regulations be changed to allow an employer-affiliated 
physician to render a second opinion and to require a neutral physician 
provide a third opinion if necessary. Koehler Manufacturing Company 
recommended that a health care provider regularly employed by the 
employer be allowed to provide the second medical opinion as this 
health care provider would be familiar with the job duties and 
responsibilities. Other commenters suggested that an employee be 
required to be examined by the employer's medical department. United 
Healthcare Corporation operates HMOs and has contractual relationships 
with the majority of physicians within a given area, and suggests it is 
virtually impossible to comply with this requirement. Section 103(c)(2) 
of the Act provides that a health care provider designated or approved 
to provide a second medical opinion shall not be employed on a regular 
basis by the employer, which is a statutory prohibition. The Department 
is unable to adopt the suggestions.
    Ten commenters were critical of the provision in Sec. 825.307(a) 
that prohibits an employer from making any contact with the employee's 
health care provider to obtain additional information, including the 
health care provider's address and telephone number. They indicated 
this prohibition worked against the interests of both the employee and 
the employer. The absence of the opportunity of the employer's health 
care provider contacting the employee's health care provider 
potentially creates additional, unnecessary costs for the employer and 
unnecessary discomfort for the employee who may be on leave for a 
serious health condition, leaving as the only recourse obtaining a 
second medical opinion. After review of these comments the Department 
agrees to some extent that a total prohibition on contact with the 
employee's health care provider is not in the best interests of both 
parties in many cases. Employers have observed that if they could only 
talk with the employee's health care provider to ask one or two 
clarifying questions, the initial medical certification could be 
accepted without resorting to a second, and maybe a third, opinion. The 
regulations have been amended in Sec. 825.307(a) and in Sec. 825.310(b) 
(certification of fitness-for-duty) to permit a health care provider 
representing the employer to contact the employee's health care 
provider for purposes of clarifying the information in the medical 
certification or confirming that it was provided by the health care 
provider. The inquiry may not seek additional information regarding the 
employee's condition. Such contact may only be made with the employee's 
or family member's permission as appropriate. If the employee refuses 
to give permission, the employer may then require certification from a 
second health care provider. The optional medical certification form is 
being amended to include the health care provider's address and 
telephone number. Further, if the FMLA leave is running concurrently 
with a workers' compensation absence under State provisions that permit 
the employer or employer's representative to have direct contacts with 
the health care provider treating the workers' compensation injury or 
illness, such authorized direct contacts with the health care provider 
are not prohibited under FMLA (unless the employee chooses to forego 
the workers' compensation claim). This contact may only be made by a 
health care provider representing the employer, as most employers are 
not medically qualified to pose clarifying questions to the employee's 
health care provider. Further, a number of commenters have expressed 
concern regarding the privacy of the employee and the ethical 
considerations of the employee's health care provider furnishing 
information to a non-medical person (the employer). By requiring the 
employee's permission (or where following authorized procedures under 
workers' compensation laws) and limiting the contact to a health care 
provider, both these considerations and concerns will be addressed. It 
should be noted that although the regulations do not require that the 
employee's permission be obtained in writing, a prudent employer should 
follow such a practice.
    Seventeen commenters addressed the issue of the third medical 
opinion. One commenter observed that the employer/employee should be 
able to use a health care provider (HCP) that is employed by the 
employer. Others suggested a number of processes to select the health 
care provider to provide the third opinion, such as: select the third 
health care provider on the basis of the worker's compensation statute; 
the choice should be the employer's alone as the opinion is obtained at 
the employer's expense; either the employee or employer submit a list 
of from three to five health care providers to the other and let the 
other party select one from the list; the selection should be made by 
the first and second health care providers; the local medical society 
should be allowed to make the selection; obtain a list of seven to 10 
health care providers and let the employer and employee each strike 
names until only one is left. Two commenters stated that the provision 
currently in the Interim Final Rule is reasonable.
    The Department has thoroughly reviewed the comments and finds there 
are a number of viable methods for selecting the third health care 
provider. The current regulations place no limitation on the method for 
selecting the third HCP and it seems appropriate to continue to provide 
the employer and employee flexibility to use any mutually agreeable 
method. The Final Rule will incorporate the provision of the current 
rule without change. It should be noted that the prohibition against 
using a health care provider regularly employed by the employer does 
not apply to the selection of the health care provider to render the 
third medical opinion (subject to the agreement of the employee).
    Fisher and Phillips observed that the regulations are silent on 
medical certification when the health care provider is located in 
another country. The observation is accurate. Since the regulations 
became effective, a number of issues have arisen when the employee or a 
member of the employee's immediate family (e.g., parent) is visiting or 
living in a country other than the United States. The Department has 
added a provision to Sec. 825.305(a) to address this issue. In essence, 
the employer must accept a medical certification from a health care 
provider who is licensed to practice in that country, and make 
arrangements for second and third opinions, if required, with health 
care providers in that country.
    The Edison Electric Institute asked when a second or third medical 
opinion is sought, what kind of information may the employer request? 
The Department has designed the optional medical form to be used for 
all three of the medical opinions as needed. If the employer chooses 
not to use the optional form for the second and third opinion, the 
information that may be requested is limited to that contained on the 
form and in Sec. 825.306 of the regulations.
Subsequent Recertifications of Medical Conditions (Sec. 825.308)
    Thirteen commenters addressed the request for comments in the 
Interim Final Rule regarding the appropriate length of time that a 
medical [[Page 2225]] certification should be valid. Two commenters 
suggested that no time frame should be established, but that it should 
be dictated by the nature of the employee's condition and any changes 
in the condition (e.g., the employer should determine when another 
certification would be appropriate). Several commenters suggested that 
an employer should not be required to rely on any certification that 
was obtained over six months prior to the current notice of need for 
FMLA leave. Three of the commenters indicated that an employee should 
be able to use a medical certification that had been obtained within 
the past six months or a year. Another commenter observed that 
permitting the use of non-current certifications would provide the 
potential for abuse. The law firm of Sommer and Barnard suggested a 
maximum of 12 weeks for the life of the validity of the certification 
under any circumstances, including the taking of leave intermittently 
or on a reduced leave schedule. They referred to the provisions in this 
section that permit the employer to request recertification every 30 
days. The longest time of validity of the certification suggested by 
any commenter was one year.
    Seventeen commenters raised concerns on the particular 
circumstances that permit an employer to require recertifications. The 
majority of the commenters indicated that permitting a recertification 
every 30 days is not reasonable as contemplated by the statute. Others 
indicated that limiting the recertification to every 30 days was too 
long; some suggested 15 days instead of 30 days. Some urged that the 
recertification should be obtained at the employer's expense. One 
commenter asked what recourse the employer has when the employee does 
not provide the requested recertification.
    After a review of all the comments the Department agrees that 
permitting the employer to routinely request recertification every 30 
days is not reasonable in some circumstances. Section 825.308 has been 
changed to provide that where a certification provides a minimum 
duration of more than 30 days, the employer may not obtain 
recertification until that minimum period has passed unless the 
circumstances specified in the regulations are present. For chronic 
conditions, recertification is ordinarily permitted every 30 days, but 
only in connection with an absence. Exceptions are provided only if 
circumstances have changed significantly or the employer has reason to 
believe the employee was not absent for the reason indicated. Because 
the statute does not provide for second or third opinions for 
recertifications, no such opinions may be required. The recertification 
must be obtained at the employee's expense unless the employer 
voluntarily chooses to pay for the recertification itself. Congress 
specifically required the second and third opinions to be obtained at 
the employer's expense. Congress did not include such a requirement 
regarding recertifications; consequently, there is no basis for the 
Department to impose the costs on the employer by regulation. If the 
employee fails to provide the recertification within 15 days when it 
was practicable to do so, the employer may delay further FMLA leave 
until the recertification is provided.
Notice of Intent To Return to Work (Sec. 825.309)
    Employees may be required to report periodically on their status 
and intent to return to work while on FMLA leave provided the 
employer's policy regarding such reports is not discriminatory. The 
Women's Legal Defense Fund asked that the term ``discriminatory'' be 
defined and that the regulations set out how often an employer may 
request status reports. They also urged that the regulations state that 
employers may not require reports in a manner that discriminates on the 
basis of gender, race, etc.
    The statute already provides a prohibition regarding 
discrimination. There are a number of references in the regulations to 
Title VII of the Civil Rights Act which prohibits discrimination based 
on sex, race, etc.
    Since the statute became effective there has been no feedback to 
the Department indicating difficulties with the aspect of 
discrimination pursuant to either FMLA or Title VII. The regulations 
presently state that, with regard to reasonableness, the employer must 
take into account all the relevant circumstances and facts related to 
the individual's leave situation. Clearly, it is the intent of the 
statute and the regulations that employers not use the entitlement to 
require status reports in a manner that is burdensome and disruptive to 
the employee while on FMLA leave. The intent is that such requests be 
reasonable under the existing circumstances. An employer who misuses or 
abuses this provision may be found to have engaged in prohibited acts 
under the statute. It does not seem appropriate or necessary to repeat 
the prohibitions of Title VII in these regulations. This section will 
remain unchanged in the Final Rule.
    Three commenters requested clarification regarding the employee's 
status when the employee fails to return at the conclusion of the leave 
or after 12 weeks of absence.
    If the employee does not return to work at the conclusion of the 
planned leave, the employee should give the employer reasonable notice 
of the need for an extension if less than 12 weeks of FMLA leave been 
exhausted in the 12-month period. If the employee is unable to or does 
not return to work at the end of 12 weeks of FMLA leave, all 
entitlements and rights under FMLA cease at that time; the employee is 
no longer entitled to any further restoration rights under FMLA, and 
the employer is no longer required to maintain group health benefits 
pursuant to FMLA.
    The law firm of Black, McCluskey, Sourers and Arbaugh, suggest that 
an employee who does not provide a status report after being given 
notice should be considered not intending to return to work.
    The determination would be dependent upon all the facts in the 
specific case. The commenter assumes that the employee has received the 
notice. Perhaps the employee is in another city caring for a parent and 
does not receive a request mailed to the employee's home. It is simply 
not possible to state a general rule regarding this circumstance; it is 
dependent on all the facts. Clearly, the failure to respond does not 
constitute unequivocal notice in all cases.
    The Texas Department of Human Services asked for a definition of 
``unequivocal,'' and whether it meant a written statement. The 
definition of this term is that it is understandable in only one way 
with no expression of uncertainty, i.e., distinct, plain, absolute, 
clear. It has nothing to do with whether the notice is written or 
verbal.
    The law firm of Fisher and Phillips urges that the regulations 
should clarify whether employees who request FMLA leave in excess of 12 
weeks are entitled to any FMLA leave and whether they are entitled to 
maintenance of group health coverage.
    The fact that the employee requests a greater amount of leave than 
the 12-week entitlement under FMLA does not negate his/her right to 
FMLA leave. The employee would be entitled to take 12 weeks FMLA leave 
with full rights and protections including maintenance of group health 
insurance. The employee's status would be reexamined at the end of the 
12-week FMLA entitlement.
    The law firm of Sommer and Barnard urges that the regulations 
provide that, if an employee wishes to return to work prior to the 
anticipated end of the leave [[Page 2226]] period, the employee be 
required to give the employer at least one or two days notice.
    The Department agrees that an employee should give reasonable 
notice to the employer where early return to work is foreseeable, and 
the regulations have been revised in paragraph (c) of this section to 
provide for a minimum of two days notice from the employee. Employers 
may also obtain this information through status reports from employees.
    The Society for Human Resource Management asked if an employer may 
require certification from an employee for adoption or birth of a child 
upon return to work? May an employer require certification from a 
father for bonding leave? The answer to both questions is affirmative; 
however, the employer's request for documentation must be reasonable, 
and should be obtained at the beginning of the leave rather than at the 
conclusion. The regulations have been changed in Sec. 825.113 to 
provide for such reasonable documentation of the reason for FMLA leave.
Return to Work Medical Certification/Fitness-for-Duty (Sec. 825.310)
    Six commenters objected to the language of the regulations that 
provides for a fitness-to-return-to-work certification pursuant to an 
employer's uniformly-applied policy. They also expressed concern 
regarding the implications resulting from ADA requirements.
    The Department agrees with some of these concerns. This section of 
the regulations has been changed to make it clear that the requirement 
of uniformity applies only to employees in similar circumstances (i.e., 
the same occupation, suffering from the same serious health condition). 
Furthermore, pursuant to ADA, the requirement for such a physical must 
be job-related and consistent with business necessity.
    Two commenters urged that the fitness-for-duty certification be 
obtained at the employer's expense.
    The statute clearly requires the employer to bear the costs of the 
second and third medical opinions. The Congress made no such provision 
for recertifications or fitness-for-duty certifications. The Department 
is unable to assign these costs to the employer in the absence of 
statutory language.
    Four commenters urged that the regulations provide for second and 
third medical opinions on fitness-for-duty certifications as in the 
case of the original medical certification.
    The statute expressly provides for second and third medical 
opinions regarding the original medical certification. No such 
provision is contained in the statute for the fitness-for-duty 
certification. The Department is unable to incorporate this suggestion 
in the Final Rule.
    Four commenters urged that the employer be permitted to confirm the 
employee's fitness-for-duty with an examination by the in-house medical 
department. This may be particularly relevant with regard to an 
employee returning from drug abuse treatment who may be subject to 
periodic follow-up examinations after returning to work.
    The regulations do not prohibit the employer from requiring the 
employee to submit to an examination after returning to work, provided 
such examination is job related and consistent with business necessity 
in accordance with ADA guidelines. However, an employer may not deny 
return to work to an employee who has been absent on FMLA leave pending 
such an ``in-house'' examination. The statute provides the employee 
must only provide the employer with certification from the employee's 
health care provider to qualify to return to work. Any examination by 
the employer's medical staff may take place the first day of the 
employee's return to work.
Failure To Satisfy Medical Certification Requirements (Sec. 825.311)
    The law firm of Sommer and Barnard observes that the regulations 
provide that an employer may require that an employee's request for 
leave be supported by certification. If the employee fails to furnish 
certification then surely the employer should be able to deny the 
entire leave, not simply the continuation of leave. Two commenters urge 
that if an employee fails to provide the required certification, not 
only should continuation of leave be denied, but the employee should be 
subject to disciplinary action by the employer.
    The Department agrees with this analysis, and has modified 
Sec. 825.311 to state that if the employee never provides the 
certification then the leave is not FMLA leave. If the leave taken by 
the employee is not FMLA leave, the employee does not enjoy the 
protections of the statute.
    The Society of Professional Benefit Administrators expressed 
concern regarding the relationship between worker's compensation 
statutes and FMLA. As discussed above, the Final Rule has been changed 
in Sec. 825.207 to address worker's compensation absences and FMLA.
Refusal to Provide FMLA Leave or Reinstatement (Sec. 825.312)
    The Department of Civil Service, State of New York comments that in 
the event the employee requests to return to work prior to the agreed 
date, the employer should not be required to reinstate the employee 
immediately but should be given a reasonable period to make the 
necessary arrangements.
    The Department has clarified this issue in Secs. 825.309(c) and 
825.312(e) of the regulations. An employee may not be required to take 
more FMLA leave than necessary to address the circumstances for which 
leave was taken. If the employee finds the circumstance has been 
resolved more quickly than anticipated initially, the employee shall 
provide the employer reasonable notice--two business days if feasible. 
The employer is required to restore the employee where such notice is 
given, unless two days notice was not feasible--for example, where the 
employee receives a release from the health care provider to return to 
work immediately, and that release is obtained earlier than 
anticipated.
    The law firm of Sommer and Barnard commented regarding the 
requirement that when taking intermittent leave for planned medical 
treatments the employee should make a reasonable effort to arrange the 
treatments so as not to unduly disrupt the employer's operations. 
Section 825.312 fails to recognize this employee obligation or assign a 
consequence for its breach.
    The Department concurs to some degree. It should be kept in mind 
that the employee does not always have alternatives to the dates of 
planned medical treatment as this is largely in the control of the 
health care provider. Section 825.302(d) has been modified in a manner 
that should lead to greater communication between the employee and the 
employer regarding this issue.
    The Employers Association of New Jersey asks if an eligible 
employee who has accumulated an unacceptable number of absences and has 
been given a final warning that provides that any absence within the 
next 30 days will result in immediate discharge may take FMLA leave to 
care for an ill spouse.
    An eligible employee who has not exhausted his/her 12-week FMLA 
leave entitlement would be entitled to take leave under these 
circumstances if all the requirements of the statute are met. The 
employee would be required to provide adequate notice of the need for 
leave, 30 days in advance if foreseeable or as soon as practicable, and 
if required by the employer, medical certification confirming the 
existence of the spouse's [[Page 2227]] serious health condition. The 
employer may not take adverse action against the employee by denying 
leave or taking other disciplinary actions for having taken FMLA leave. 
The taking of FMLA leave may not be counted against the employee under 
the employer's attendance policy. See Sec. 825.220.
    The Equal Employment Advisory Council suggests that it be made 
clear that employee misconduct prior, during or after FMLA leave that 
violates company policy is subject to the consequences of the 
employer's policies.
    The Department wishes to make clear that FMLA is not a sanctuary 
for the employee who has violated or is in violation of company 
policies. A basic tenet of FMLA is that the employee who takes FMLA 
leave is to be treated no differently than if the employee had 
continued to work. For example, if the employer has a non-
discriminatory policy that the second time the employer becomes aware 
that an employee has engaged in the illegal use of drugs, the employee 
will be terminated, the fact that the employee is on FMLA leave will 
not shield the employee from the continued application of that policy 
(i.e., termination).
    The Society for Human Resource Management (SHRM) asked whether an 
employee who is on FMLA leave and who resigns in the middle of the 
leave has to be kept on the payroll until the leave period is over.
    No. The regulations provide that once an employee gives the 
employer unequivocal notice that the employee does not intend to return 
to work at the conclusion of leave, the employee may be terminated and 
FMLA leave ends, as well as the obligation for maintenance of health 
benefits, and the employer need not keep the employee on the payroll 
after receiving such notice.
    SHRM asked where an employee who is pregnant requests FMLA leave, 
but the health care provider declines to certify that the employee is 
unable to work as a result of the serious health condition (ongoing 
pregnancy), what action should the employer take?
    In this circumstance the employee does not qualify as being unable 
to work as a result of her condition, and the employer could deny the 
use of FMLA leave.
    SHRM asked how an employer was supposed to manage absenteeism if 
the employee continues to claim leave taken is covered by FMLA?
    The Final Rule attempts to address some of these issues. An 
employer is entitled to request medical certification and 
recertification in connection with serious health conditions. The Final 
Rule provides that, if an employee never provides the medical 
certification, the absence is not FMLA leave; consequently, the leave 
is not protected by the FMLA. The Final Rule further provides that the 
employer may require documentation from the employee to confirm family 
relationships, as in the case of leave for birth or placement of a 
child for adoption or foster care. The Department believes there are a 
number of tools available to employers under the regulations that will 
serve to discourage employee abuse of FMLA leave, in addition to the 
basic concept that the 12 weeks of leave mandated by FMLA are unpaid.
    The Koehler Manufacturing Company comments that it is unclear 
whether an employee may earn W-2 wages with some other employer while 
on FMLA leave.
    The Department addressed this issue in the Interim Final Rule. 
Section 825.312(h) provides that whether an employee may engage in 
outside employment during FMLA leave is dependent upon the employer's 
established policy regarding outside employment. For example, the 
employer may require that all outside employment be pre-approved by the 
employer. If so, employment while on FMLA leave would be subject to 
this policy. This provision will remain unchanged in the Final Rule.
    The Service Employees International Union took issue with the 
provision in Sec. 825.312(h) applying the employer's policy regarding 
outside employment to periods of FMLA leave. SEIU maintained that there 
is no statutory basis for this provision, and that it constitutes the 
imposition of additional requirements on the taking of FMLA leave.
    The Department does not agree with this view. As noted previously, 
a basic tenet under FMLA is that an employee on FMLA leave is entitled 
to no greater right, benefit, or position of employment than if the 
employee continued to work and had not taken the leave (see 
Sec. 104(a)(3)(B) of the Act). While an employee is on FMLA leave, 
there continues to be an employment relationship, the employer is 
maintaining group health benefits and possibly other benefits, and the 
employee is entitled to return to the same or an equivalent job. 
Consequently, the employer's employment policies continue to apply to 
an employee on FMLA leave in the same manner as they would apply to an 
employee who continues to work, or is absent while on some other form 
of leave.
    It is important to point out that the regulations do not prohibit 
outside employment by the employee on FMLA leave except as a result of 
the employer's established policies. In the absence of such a policy 
the employee may do as he/she chooses. However, taking outside 
employment during a period of FMLA leave may in some cases cast doubt 
on the validity of an employee's need for leave, particularly if the 
leave was being taken for the employee's own serious health condition.

IV. Subpart D--Enforcement Mechanisms

Employee Rights When FMLA Has Been Violated (Secs. 825.400-825.404)
    Federally Employed Women, 9 to 5, National Association of Working 
Women, Women's Legal Defense Fund, the Food and Allied Service Trades 
(FAST) and the United Food and Commercial Workers International Union 
(UFCW), suggest that the Interim Final Rule fails to include a 
complaint procedure that provides expedited relief and that the rule 
does not include injunctive relief as one of the available remedies in 
an employee's private court action. The Women's Legal Defense Fund and 
FAST urge that Sec. 825.400(c) be amended to include ``other equitable 
relief as appropriate.'' FAST points out that the expedited procedure 
is important, particularly if the employer fails to maintain group 
health insurance and the employee has a serious health condition which 
heightens the need for medical benefits.
    The provision for an expedited complaint procedure is not a 
regulatory issue, but rather is an internal agency administrative 
enforcement issue. In any event, such an expedited procedure was 
adopted under FMLA in appropriate circumstances, and will continue to 
be used as an effective enforcement tool in carrying out the 
Department's responsibilities pursuant to FMLA. The statute at 
Sec. 107(a)(2) makes no provision for an eligible employee to seek 
equitable relief through an injunctive action. Such an action is 
available only for the Secretary in Sec. 107(d). The suggestion will 
not be incorporated into the Final Rule, as it has no statutory basis.
    In the event the employer violates FMLA by failing to maintain the 
group health benefits as required, and dropping the employee's 
coverage, the employer in effect becomes self-insured and liable for 
any medical expenses incurred by the employee that would have been 
covered by the group health plan. With respect to the comment that 
[[Page 2228]] the rule be amended to include equitable relief, although 
the current rule, at Sec. 825.400(c), includes such relief 
(``employment, reinstatement and promotion''), the language has been 
clarified.
    The Personnel Management Systems, Inc., urges that an employee be 
permitted to file a civil suit only after the Department has had an 
opportunity resolve the issue. The statute places no requirement that 
an employee exhaust administrative remedies before being authorized to 
file a private suit, as under Title VII. The legislative history 
confirms such a result. Therefore, no change will be made in the Final 
Rule.
    The Chamber of Commerce of the USA questions the statutory basis 
for allowing an employee or another person to file a complaint with the 
Secretary of Labor, stating that only the affected employee should be 
permitted to file a complaint. The legislative history provides 
guidance on enforcement of the statute. FMLA's enforcement scheme is 
modeled after the FLSA, which has been in effect since 1938. Thus, FMLA 
creates no new agency or enforcement procedures, but instead relies on 
the time-tested FLSA procedures already established by the Department 
of Labor. Report from the Committee on Labor and Human Resources (S. 
5), Report 103-3, January 27, 1993, pp. 35-36. The Department, in its 
enforcement of FLSA, has accepted complaints from employees as well as 
other persons who may have knowledge of the circumstances (e.g., a 
relative of the employee, a Collective Bargaining Unit representative, 
a competitor, etc.).
    The Nevada Power Company and the Edison Electric Institute suggest 
that punitive damages should be limited to those involving willful 
violations of the law. The statute does not explicitly provide for 
punitive damages, which would be available only if otherwise provided 
by law. Section 107(a)(1)(A)(iii) provides for an additional amount as 
liquidated damages to the amount awarded, including interest. An 
employer may avoid the liquidated damages if the employer can show to 
the satisfaction of the court that the violation was in good faith and 
the employer had reasonable grounds for believing that the action taken 
was not a violation of the statute. The regulations cannot limit the 
employer's liability for violations of the statute, when no such 
limitation is provided under the law.
    The United Paperworkers International Union urges that the 
regulations require employers to justify significant changes in 
employment levels, thereby discouraging such manipulations to avoid 
coverage. There is no basis in the statute for requiring such action on 
the part of employers. However, Sec. 825.220(b)(1) of the regulation 
has been amended to advise covered employers that such manipulation 
will be viewed as a violation of the acts prohibited by the statute and 
the regulations.

V. Subpart E--Records (Sec. 825.500)

    Nine commenters, including the Women's Legal Defense Fund (WLDF) 
and the EEOC, expressed concern about maintaining the confidentiality 
of medical records. WLDF urged that separate files be maintained to 
protect the confidentiality of ADA records, and EEOC said that having 
one confidential medical file for both laws (FMLA and ADA) may not 
always satisfy the ADA confidentiality requirements. EEOC stated that 
ADA protects all ``information * * * regarding * * * medical condition 
or history of any employee,'' (see 29 CFR Sec. 1630.14(c)(1)), which 
would include all employee medical information regardless of the form 
or manner in which it is provided, whereas the FMLA rule would be 
limited to ``records and documents relating to medical certifications, 
recertifications or medical histories of employees or employees' family 
members.'' According to EEOC, if all medical information is kept 
confidential under FMLA like under ADA, maintaining only one 
confidential medical file would satisfy the ADA provided employers 
administer the exceptions to the confidentiality requirement in 
conformance with ADA requirements (e.g., employers would have to 
provide supervisors or managers only with the specific information 
``regarding necessary restrictions on the work or duties of an 
employee'' (Sec. 825.500(g)(1)), and deny them free access to the 
entire medical files of employees). Section 825.500(g) has been amended 
to require that medical records created for purposes of FMLA and ADA 
must be maintained in accordance with ADA's confidentiality rules on 
medical information.
    Nine commenters expressed concern regarding the recordkeeping 
burden imposed by FMLA. The LaMotte Company specifically took issue 
with the estimate provided in the Interim Final Rule of 3 minutes per 
response, observing that, in their opinion, the requirements would take 
much longer. They estimate each certified letter would require one hour 
to prepare in addition to copying and sending. In addition, they 
experienced numerous telephone inquiries from employees and pointed out 
that time is also necessary for training of supervisors and managers. 
The Human Resources Department, Village of Schaumberg, Illinois, also 
took issue with three-minute burden estimate. They observed that 
calculating hours of unpaid leave and the number of hours worked versus 
hours of FMLA leave, determination of FMLA versus other types of leave, 
and creating a system to collect employees' share of benefits all 
required significantly more time than three minutes. Most other 
commenters simply expressed the opinion that FMLA recordkeeping 
requirements are burdensome. The ``three minutes per response'' is an 
estimate of the annual recordkeeping burden per employee, to record 
and/or file records required by the regulations that are not otherwise 
required by law or would otherwise be kept as a customary prudent 
business practice. It does not include the preparation of employee 
notices required by the regulations, determination of employee 
eligibility, or procedures for payment of health benefits during FMLA 
leave.
    The LaMotte Company observed that they had received statements from 
employees who believe that instead of making arrangements for others to 
take care of their children when they have minor colds, sore throats, 
or ear infections, they may now stay home with the child because they 
don't have to worry about saving sick leave for a truly serious health 
condition, and because FMLA may not be counted against their ``point'' 
system. Section 825.114 contains the definition of a serious health 
condition. The regulations provide that an employer may require an 
employee to provide a medical certification with regard to a serious 
health condition for a member of the employee's immediate family 
(child). If the certification does not confirm the existence of a 
serious health condition as defined under FMLA, or the employee fails 
to provide the certification when requested, the leave is not FMLA 
leave.
    The California Department of Fair Employment and Housing and the 
Chesapeake Farm Credit object to the requirement for a covered employer 
who has no eligible employees to comply with the recordkeeping 
requirements of this section. Section 825.500(c) will be changed in the 
Final Rule to require the covered employer with no eligible employees 
to post the notice required in Sec. 825.300 and to maintain only the 
basic payroll information (i.e., name, address, occupation, rate or 
basis of pay, daily and weekly hours, etc.) already required under 
FLSA. These data are required to [[Page 2229]] enable the covered 
employer to determine employee eligibility, when necessary. Once the 
covered employer has eligible employees, the additional records 
required by Sec. 825.500(d) must be maintained.
    Florida Citrus Mutual observes this section does not address the 
question of records to be maintained by joint employers. The records to 
be kept by primary employers and covered secondary employers in a joint 
employment situation should be listed separately, they contend.
    The regulations have been revised to provide that a covered 
secondary employer in a joint employment situation need only keep basic 
payroll records with respect to its secondary employees. Other records 
are not necessary because the secondary employer's responsibilities in 
a joint employment relationship are only to reinstate the employee 
under the circumstances set forth in Sec. 825.106(a) and to not violate 
any of the prohibited acts of the statute.

VI. Subpart F--Special Rules for Local Education Employees

Limitations on Intermittent Leave or Leave on a Reduced Leave Schedule 
(Sec. 825.601)
    The Women's Legal Defense Fund and the American Federation of 
Teachers/National Education Association stated that the instructional 
employee who takes intermittent leave amounting to 20 percent or less 
of the working days during the period of leave should not be subject to 
the usual rules for taking intermittent leave in Secs. 825.117 and 
825.204. The employer does not have a right to transfer the employee to 
an alternative position under this circumstance. They suggest that the 
third sentence of paragraph (a)(2) of this section be deleted.
    The statute at Sec. 108(c)(1) gives the educational employer the 
right to require the employee either to take leave of a particular 
duration not to exceed the duration of planned medical treatment or to 
transfer to an alternative position that better accommodates recurring 
periods of leave. The statute is silent regarding the circumstances 
when the employee takes intermittent leave for 20 per cent or less of 
the total number of working days in the period during which the leave 
would extend. After further consideration the Department agrees that 
Sec. 108 of the Act provides the only provision applicable to 
instructional employees and, therefore, an educational employer does 
not have the latitude to transfer an instructional employee to an 
alternative position in this circumstance. The Final Rule will reflect 
this change.
Leave Taken for ``Periods of a Particular Duration'' (Sec. 825.603)
    Federally Employed Women, the Women's Legal Defense Fund and the 
American Federation of Teachers/National Education Association objected 
to the provision in paragraph (a) of this section which states that 
leave that is required by the employer for either a particular duration 
or until the end of the school term is to be counted as FMLA leave. 
They view this provision to be doubly penalizing when the employee is 
required to take more leave than desired or medically necessary, and 
then to have that ``extra'' leave count against his or her FMLA leave 
entitlement. They urge that this provision be changed to reflect that 
such leave is to be counted against the FMLA entitlement only if the 
employee chooses rather than is required to take additional leave.
    The legislative history provides the following guidance: Whenever a 
teacher is required to extend his or her leave under section 108(c) or 
(d), such leave would be treated as other leave under the act, with the 
same rights to employment and benefits protection contained in section 
104. Report from the Committee on Labor and Human Resources (S. 5), 
Report 103-3, January 27, 1993, p. 37. However, the Department agrees 
that because the employer had the option of not requiring the employee 
to take leave until the end of the term, the leave should not count 
against the 12-week entitlement.
    The Chicagoland Chamber of Commerce, et al., commented that all 
periods of leave taken by school employees should count as FMLA leave, 
including any period of leave that occurs outside the school term. For 
example, if an instructional employee begins a six-week leave two weeks 
before the school term ends, the entire six-week period should count as 
FMLA leave.
    The Department disagrees. An absence taken when the employee would 
not otherwise be required to report for duty is not leave, FMLA or 
otherwise. For example, the regulations do not require an employee, who 
normally works Monday through Friday, and is taking intermittent leave, 
to have counted as leave the weekend days (i.e., Saturday and Sunday). 
If the employee(s), absent FMLA, would not have otherwise been required 
to take some form of leave to cover the absence, then the absence is 
not to be counted against the employee's FMLA leave entitlement. 
Section 825.200(f) has been added to the Final Rule to clarify this 
issue.
Restoration to ``Equivalent Position'' (Sec. 825.604)
    The Women's Legal Defense Fund and the American Federation of 
Teachers/National Education Association urged that this section be 
clarified in the Final Rule to make it clear that restoration of an 
employee at the conclusion of FMLA leave based on existing policies and 
practices of a school board must provide substantially the same 
protections as provided in the statute for other reinstated employees. 
Specifically, the school board may not restore the employee to a 
position which would require any additional licensure or certification, 
or would result in substantially increased commuting time.
    The Department agrees with the suggestion that the regulation 
prohibit restoration to a position requiring additional licensure. 
While as a general matter restoration must be to a geographically 
proximate location, a school board policy may deviate from this 
requirement provided the deviation does not result in substantially 
less employee protections. Therefore, commuting time will not be 
mentioned in the rule.

VII. Subpart G--How Other Laws, Employer Practices, and Collective 
Bargaining Agreements Affect Employees' FMLA Rights

More Generous Employer Benefits Than FMLA Requires (Sec. 825.700)
    Nothing in FMLA diminishes an employer's obligation under a 
collective bargaining agreement (CBA) or employment benefit program or 
plan to provide greater family or medical leave rights to employees 
than the rights established under FMLA (FMLA Sec. 402(a)), nor may the 
rights established under FMLA be diminished by any such CBA or plan 
(FMLA Sec. 402(b)).
    This section of the regulations described the interaction between 
FMLA and employer plans and CBAs. Included were provisions to describe 
FMLA's delayed effective date for CBAs in effect on August 5, 1993--
FMLA would not apply until February 5, 1994, or the expiration date of 
the CBA, whichever occurred earlier. For CBAs subject to the Railway 
Labor Act and other CBAs which have no expiration date for the general 
terms, but which may be reopened at specified times (e.g., to amend 
wages and benefits), the date of the first amendment after August 5, 
1993, and before February 5, 1994, was [[Page 2230]] considered the 
effective date for purposes of FMLA.
    The State of Oregon's Bureau of Labor and Industries, State of 
Oklahoma's Office of Personnel Management, Fisher & Phillips, and 
College and University Personnel Association raised questions or 
offered comments on whether ``more generous'' family or medical leave 
provided pursuant to contract or an employer policy may be counted 
against an employee's 12-week FMLA leave entitlement under 
circumstances where either the employees would not yet be eligible for 
FMLA leave, or the leave is for a reason that does not qualify as FMLA 
leave (e.g., employers adopt leave policies that mirror FMLA but relax 
eligibility requirements or the definition of serious health condition, 
or expand the ``family member'' definition to include in-laws and 
domestic partners). To reduce the incentive for employers to eliminate 
such ``more generous'' policies, these commenters contend that DOL 
should allow employers to count such leave towards FMLA leave 
entitlements.
    Leave granted under circumstances that do not meet FMLA's coverage, 
eligibility, or specified reasons for FMLA-qualifying leave may not be 
counted against FMLA's 12-week entitlement. However, employers may 
designate paid leave as FMLA leave and offset the maximum entitlements 
under the employer's more generous policies to the extent the leave 
qualifies as FMLA leave.
    Sommer & Barnard questioned whether FMLA's 12 weeks of leave must 
be added to longer periods of employer-provided leave (e.g., disability 
leave); or, alternatively, whether employers may offset FMLA's leave 
entitlement against the longer periods of employer-provided leave. To 
the extent that a particular absence recognized under the employer-
provided plan also qualifies as FMLA leave, and the leave is designated 
by the employer in accordance with Sec. 825.207 and Sec. 825.208, the 
absence may be counted concurrently under both FMLA and the employer's 
plan (e.g., a disability that is covered by the employer's disability 
leave plan which also meets FMLA's definition of ``serious health 
condition that makes the employee unable to perform the functions of 
the position'').
    The Chamber of Commerce of the USA commented that the language in 
paragraph (c) of this section provided a reasonable construction of the 
Act's effective date for CBAs subject to the Railway Labor Act and 
other CBAs which do not have an expiration date for the general terms, 
but which may be reopened between August 5, 1993, and February 5, 1994, 
to amend wages and benefits. The example given, however, of a contract 
reopening to amend wages and benefits wrongly suggests that a contract 
reopened for any other reason also should be considered terminated for 
FMLA effective date purposes, the Chamber contended. Any reopening not 
pertaining to benefits should not be construed as a termination of the 
agreement according to this comment.
    We disagree with the interpretation suggested by this comment. Any 
reopening of the CBAs subject to this rule, which is specifically 
limited to CBAs subject to the Railway Labor Act and other CBAs which 
do not have an expiration date for the general terms, for the first 
time after August 5, 1993, shall be considered the termination date of 
the CBA for purposes of FMLA's effective date.
    The Contract Services Association of America questioned whether the 
costs associated with FMLA's requirements to maintain group health 
benefits during periods of FMLA leave could be credited by a contractor 
towards meeting its fringe benefit requirements under wage 
determinations issued pursuant to the McNamara-O'Hara Service Contract 
Act (SCA), or are they excluded as are other statutorily-mandated 
benefits such as FICA, workers' compensation, etc.? Because SCA 
excludes any benefit otherwise required by Federal, State, or local law 
to be provided by the employer to an employee, such costs may not be 
claimed as a credit for purposes of meeting the contractor's fringe 
benefit obligations to employees under the SCA. In any event, SCA 
credit may only be taken for contributions that cover periods when work 
is performed.
    The Contract Services Association also asked whether cash-
equivalent payments made in lieu of furnishing bona fide health and 
welfare benefits to an SCA-covered employee have to continue when the 
employee is on FMLA leave. Such cash equivalent payments do not have to 
continue while the employee is on unpaid FMLA leave.
State Family and Medical Leave Laws and FMLA (Sec. 825.701)
    Nothing in FMLA supersedes ``any provision of any State or local 
law that provides greater family or medical leave rights'' than the 
rights under FMLA (see FMLA Sec. 401(b)). Because of this statutory 
``non-preemption'' language, the determination of which law applies 
(State versus Federal) in a particular situation must be examined on a 
provision-by-provision basis. Where the requisite coverage or 
applicability standards of both laws are met and the laws contain 
differing provisions, an analysis must be made of both laws, provision-
by-provision, to determine which standard(s) from each law will apply 
to the particular situation. The standard providing the greater right 
or more generous benefit to the employee from each law (provision-by-
provision) will apply. Note, however, that leave taken for a reason 
specified in both the Federal and State law may be simultaneously 
counted against the employee's entitlement under both laws. This 
section of the regulations attempted to demonstrate the interaction 
between FMLA and State laws with examples. Numerous comments were 
received suggesting there may be considerable confusion over the 
``provision-by-provision'' analysis that must be conducted in each 
particular case.
    Employers Association of New Jersey recommended guidelines be 
included in the regulations for applying FMLA and State law in the 
following manner:
    If an employee takes leave for a purpose which is recognized under 
only one of the two laws, rights and obligations are governed by that 
law alone, and the amount of leave taken cannot be charged against the 
amount of leave which may be allowed under the other law.
    If an employee takes leave for a purpose which is recognized under 
both the FMLA and a State law, the employee is entitled to the benefits 
of whichever law is the most favorable to the employee and the amount 
of leave taken is charged against the amount which is allowed under 
each law.
    The availability of benefits under either law is subject to the 
limitations of that law with respect to the duration of leave, type of 
leave, etc. 
    The Equal Rights Advocates suggested additional examples where a 
State law is silent on an issue addressed by FMLA. If an employee is 
``eligible'' under both FMLA and a State or local law, and the State or 
local law is silent on a provision contained in FMLA, and if the FMLA 
provision is restrictive (as to employee rights or benefits), then the 
State or local law would govern as to that provision. If the FMLA 
provision is not restrictive (or extends a right, benefit or privilege 
to employees), then the FMLA would govern as to that provision. For 
example, a State law that grants employers the right to deny the taking 
of leave to high-level executives could not be applied to any FMLA-
eligible employees, because FMLA extends to all eligible employees the 
entitlement to leave for qualifying reasons. If the same State law 
contained a provision mandating that all [[Page 2231]] employees who 
take leave be restored to employment when the leave ends, then FMLA's 
``key'' employee exemption could not be applied to deny an employee 
reinstatement (i.e., the Federal law would not apply at the time of 
reinstatement).
    The guidelines and interpretations suggested above by the Employers 
Association of New Jersey and the Equal Rights Advocates correctly 
construe the relationship between FMLA and other State laws, which have 
been included here for guidance.
    Chicagoland Chamber of Commerce commented that, with respect to 
substantive provisions such as eligibility and coverage requirements, 
amount of leave, benefits and employment protections, and substitution 
requirements, the more generous or expansive provisions between the 
FMLA and the State law should apply and be considered to offset or 
simultaneously satisfy overlapping but less generous provisions. ``More 
generous'' should be determined on a ``common sense, quantitative 
basis,'' they contend, such as where a State law allows up to 16 weeks 
of leave for a serious health condition in any year and FMLA allows 12 
weeks, the State law maximum would apply. They recommended the 
regulations specify that differences in more generous substantive 
provisions in State law cannot be combined with other less restrictive 
provisions in FMLA, and vice versa. With respect to procedural 
provisions, such as notification of leave, certification requirements, 
and other procedural requirements, the commenter recommended that the 
provisions of FMLA and its implementing regulations should be applied 
in all cases because of the administrative difficulty in trying to 
determine if State or Federal provisions are more or less generous. The 
Louisiana Health Care Alliance (Phelps Dunbar) similarly suggested that 
any State law procedural regulations which are inconsistent with FMLA 
should be preempted.
    FMLA provides that it shall not supersede ``any provision'' of any 
State or local law that provides greater family or medical leave 
``rights'' than under FMLA. There is no basis under this language or 
the legislative history to distinguish between procedural provisions 
that extend greater rights to employees and substantive provisions that 
provide more generous family or medical leave benefits to employees.
    The Women's Legal Defense Fund recommended the regulations address 
the interaction between FMLA and State workers' compensation laws. The 
State of Oregon's Bureau of Labor and Industries asked if State 
workers' compensation laws qualify under FMLA as a ``State * * * law 
that provides greater * * * medical leave rights * * *''
    If a State workers' compensation law provides a job guarantee to 
workers out of work temporarily due to occupational injuries that is 
more generous than FMLA's job restoration provisions, such law is a 
``State * * * law that provides greater * * * medical leave rights * * 
*'' and would govern an employee's reinstatement. On the other hand, 
where such occupational injuries also meet FMLA's definition of 
``serious health condition that makes the employee unable to perform 
the functions of the position,'' the employer would have to maintain 
the injured employee's group health benefits under the same terms and 
conditions as if the employee had continued to work during the workers' 
compensation-related leave of absence (at least for the duration of the 
employee's remaining FMLA leave entitlement in the 12-month period).
    The Association of Washington Cities commented that an employee 
could take 12 weeks of FMLA-qualifying leave for a purpose other than 
the birth or adoption of a child and still be eligible under applicable 
State law to another (subsequent) 12 weeks of ``parenting'' leave, 
which could enable an employee to take 24 weeks of leave in a single 
year. Under the terms of the applicable statutes, this is true.
    The State of Oregon's Bureau of Labor and Industries noted that 
Oregon's parental leave law provides a 12-week window following the 
birth of a child for the use of parental leave, and asked if an 
employee's use of 12 weeks of parental leave within the first 12 weeks 
following the birth exhausts the parent's Federal right to take 
parental leave within the first year. An employee ``eligible'' under 
both the Federal and State law would exhaust both entitlements 
simultaneously within that 12-week period. Note, however, that if the 
employee used fewer than 12 weeks during that initial 12-week period 
following the birth, the employee could use the remainder of his or her 
Federal leave entitlement under FMLA within one year after the birth. 
This commenter also pointed out that a parent must share a state leave 
entitlement with his or her spouse regardless of whether they work for 
separate employers. Under FMLA, each FMLA-''eligible'' spouse would 
retain a Federal entitlement equal to 12 weeks minus their portion of 
the State leave taken.
    The University of California observed that, under California law, 
employers may not obtain second or third opinions except in the case of 
an employee's own serious health condition. Thus, because FMLA was 
intended to permit Christian Science practitioner certification, 
employers would not be able to obtain second or third medical opinions 
in connection with the serious health condition of a spouse, child or 
parent. Under the applicable statutes, this would be true.
    Downs Rachlin & Martin stated that, under Vermont's Parental and 
Family Leave Act, an employee may use accrued sick leave or vacation 
leave, not to exceed six weeks, consistent with existing policy. 
``Utilization of accrued vacation leave shall not extend the leave 
provided therein.'' The commenter questioned whether the Federal law 
provided a more generous benefit. The answer is ``Yes'' with respect to 
FMLA's more generous substitution provisions and the length of the 
allowable leave period.
    Hill & Barlow pointed out that the Massachusetts maternity leave 
statute entitles an eligible employee to up to eight weeks of leave for 
the purpose of giving birth or for adopting a child. They asked if an 
employee had used 12 weeks of FMLA leave earlier in the year for a 
purpose other than giving birth or adopting a child, would the employee 
still be eligible to the State leave entitlement? The answer is 
``Yes.''
    The Corporation for Public Broadcasting objected to having to 
comply with both FMLA and State law where one law's benefit is not 
clearly more generous than the other. They, together with the Equal 
Employment Advisory Council and the Electronics Industries Association, 
also questioned the provision entitling an employee to use leave under 
Federal and State or local law concurrently, and thus to take a total 
amount of leave which may exceed the already generous amount allowed by 
either law. The Corporation for Public Broadcasting suggested a Federal 
preemption if permitted or the lobbying of Congress to obtain such 
authority. California Bankers Association similarly suggested DOL 
include language to preempt all State law in this area or allow an 
employee to take only the greater of the leaves available (to prevent 
``piggybacking'' leave under both FMLA and State law). National 
Association of Plumbing-Heating-Cooling Contractors suggested that 
``cafeteria-style'' programs where different standards and/or benefits 
from each or both the Federal and State laws are selected to form a 
separate, hybrid leave plan should be strictly prohibited, and likewise 
urged that the issue of preemption be revisited. [[Page 2232]] 
    Given the literal language of FMLA, DOL has no authority to preempt 
State laws to the extent they provide more generous leave rights to 
employees. The results about which the majority of the comments 
complained occur by operation of law (FMLA and State family and medical 
leave laws), and cannot be mitigated by regulation. Only editorial 
changes have been included in this section of the regulations in 
response to the comments, in order to clarify examples and provide 
additional guidance.
Federal and State Anti-discrimination Laws (Sec. 825.702)
    Nothing in FMLA modifies or affects any Federal or State law 
prohibiting discrimination on the basis of race, religion, color, 
national origin, sex, age, or disability (see FMLA Sec. 401(a)). The 
stated purpose of the FMLA in this regard, according to its legislative 
history, was to make leave available to eligible employees within its 
coverage, and not to limit already existing rights and protection under 
applicable anti-discrimination statutes (for example, Title VII of the 
Civil Rights Act of 1964, as amended by the Pregnancy Discrimination 
Act; and the Americans with Disabilities Act (ADA)). This section 
included examples of how FMLA would interact with the ADA with respect 
to a qualified individual with a disability as defined under that Act.
    Comments from U.S. Senators Dodd and Kerry (sponsors of both FMLA 
and ADA), in a letter to the EEOC dated November 22, 1993, make clear 
that congressional intent was for both Acts to be applied 
simultaneously, and that an employer must comply with whichever 
statutory provision provides the greater rights to employees. In 
keeping with that statutory intent, FMLA Sec. 401 should not be 
interpreted in any way as limiting or forcing an election of rights 
under FMLA or ADA. Similarly, comments from U.S. Representatives 
Williams and Ford (Committee on Education and Labor), in a letter to 
the EEOC dated November 19, 1993, explained that congressional intent, 
in the case of an employee with a serious health condition under FMLA 
who is also a qualified individual with a disability under ADA, was for 
the FMLA and ADA to be applied in a manner that assured the most 
generous provisions of both would apply. The statutes provide 
simultaneous protection and at all times an employer is required to 
comply with both laws. The Department concurs with this interpretation 
of the FMLA as it relates to the ADA and other discrimination laws. In 
summary, providing the ``more beneficial'' rights or protections does 
not undermine an employer's obligation to observe the requirements of 
both statutes. Satisfying any or all FMLA requirements, including 
granting an employee 12 weeks of leave and restoring the employee to 
the same job, does not absolve an employer of any potential ADA 
responsibilities to that employee (and vice versa).
    Several commenters (G.M. Smith Associates, Inc; Personnel 
Management Systems, Inc; Chamber of Commerce of the USA; Equal 
Employment Advisory Council; and Louisiana Health Care Alliance (Phelps 
Dunbar)) urged a contrary view, that compliance with FMLA should 
constitute or substitute for compliance with ADA, to simplify the 
burdens of multiple compliance obligations. Some stated that employers 
evaluating ``undue hardship'' under ADA need not disregard the cost and 
disruption of FMLA leave already taken by an employee. This point was 
also raised by Personnel Management Systems, Inc. and Chamber of 
Commerce of the USA. The Department has been advised by the EEOC that 
the ADA, unlike the FMLA, considers the burden on an employer for 
purposes of evaluating the feasibility of employee medical leave. Cost 
and disruption to the employer are directly relevant to the factors 
listed in ADA's regulatory definition of ``undue hardship.'' Therefore, 
according to EEOC, employers may consider FMLA leave already taken when 
deciding whether ADA accommodation leave in excess of 12 weeks poses an 
undue hardship. This does not mean, however, that more than 12 weeks of 
leave automatically poses an undue hardship under the ADA. According to 
EEOC, employers must apply the full ADA undue hardship analysis to each 
individual case to determine whether or not leave in excess of 12 weeks 
poses an undue hardship.
    An employee's right to be restored to the same or an equivalent 
position under FMLA applies to the job which the employee held at the 
time of the request for FMLA leave, even if that job differs from the 
job held previously due to a reasonable accommodation under ADA. (This 
point was raised by the Chamber of Commerce of the USA.) The 
``essential functions'' of the position would also be those of the 
position held at the time of the request for leave. An employer may not 
change the essential functions of an employee's job in order to deny 
the employee the taking of FMLA leave. However, this does not prevent 
an employee from voluntarily ending his or her leave and accepting an 
alternative position uncoerced and not as a condition of employment. 
The employee would then retain the right to be restored to the position 
held by the employee at the time the FMLA leave was requested (or 
commenced) until 12 weeks have passed, including all FMLA leave taken 
and the period the employee returned to ``light duty.'' When an 
employer violates both FMLA and ADA, an employee may be able to recover 
under either or both statutes (but may not be awarded double relief for 
the same loss).

VIII. Subpart H--Definitions (Sec. 825.800)

    The Women's Legal Defense Fund urges that all definitions that are 
modified in the text of the regulations be modified similarly in 
Subpart H. Certainly the Department intends to maintain the integrity 
of this Subpart, and any material modifications will be incorporated.
    The law firm of Alston and Bird recommended that the term group 
health plan should not include non-employment related benefits paid by 
employees through voluntary deductions, e.g., individual insurance 
policies. We agreed with the recommendation and language has been added 
to Sec. 825.209(a)(1) to exclude such benefits from the definition of 
group health plan, and make clear an employer is not responsible for 
maintaining or restoring such benefits for employees who take FMLA 
leave.
    The American Association of Retired Persons (AARP) took issue with 
the definition of ``parent'' in this section and stated there is 
nothing in the statutory language or the legislative history that 
required the exclusion of parents in-law. We disagree, as discussed 
above in connection with Sec. 825.113. Section 101(7) of the statute 
defines parent as the biological parent of an employee or an individual 
who stood in loco parentis to an employee when the employee was a son 
or daughter. There is no language in the legislative history to 
indicate Congress contemplated expanding the definition beyond the 
plain meaning of the words. In the Final Rule, the sentence, ``This 
term does not include parents `in-law''', will be removed from the 
definition of ``parent'' in Sec. 825.800, but not from the explanatory 
guidance in Sec. 825.113. This is being done not because we agree with 
AARP but rather because the language in the statute and the regulation 
are clear regarding the term and the additional sentence is 
unnecessary.
    The law firm of Fisher and Phillips urged that the Final Rule 
should clarify whether employees of a U.S. employer who are employed in 
the territories and [[Page 2233]] possessions of the United States may 
be eligible employees. The law firm asks for the same clarification 
with regard to employees working in countries other than the United 
States. Sections 825.105(a) and 825.800 in the Final Rule will be 
amended to reflect that employees employed within any State of the 
United States, the District of Columbia or any territory or possession 
of the United States are subject to FMLA and may be eligible employees. 
Employees employed outside these areas are not counted for purposes of 
determining employer coverage and may not become eligible employees as 
FMLA does not apply.
    The Personnel Management Systems, Inc., and the Credit Union 
National Association, Inc., suggest that only eligible employees should 
be counted in determining whether an employer has 50 or more employees 
for FMLA coverage purposes. The language of the statute, in Sec. 101(2) 
defines the term ``Eligible Employee.'' In paragraph (3) of that 
section, the statute defines ``Employee'' as having the same meaning as 
the definition found in section 3 of the Fair Labor Standards Act. 
Section 101(4) of the statute defines ```Employer' as any person * * * 
who employs 50 or more employees * * *'' (emphasis added). If Congress 
had intended to limit the count for determining coverage to eligible 
employees only, it could have included that language ``50 or more 
eligible employees.'' The legislative history indicates clearly 
Congress' intent to count all employees. The Department is unable to 
incorporate the desired change.
    The Medical Group Management Association recommends that the 
definition of employee should not include equity owners (partners) of 
corporations who are both employers and employees. These individuals 
should be excluded from the count of employees even though their names 
appear on the payroll.
    Persons who are partners in a business are not employees for 
purposes of the FMLA because partners are not included within the 
definition of employee under the FLSA. The definition of ``employer'' 
in Sec. 101(4) of the FMLA means any person engaged in commerce or in 
any industry or activity affecting commerce who employs 50 or more 
employees, etc., and includes any person who acts, directly or 
indirectly, in the interest of an employer to any of the employees of 
the employer. Section 101(8) defines ``person'' to have the same 
meaning as in Sec. 3(a) of the FLSA, which means an individual, 
partnership, association, corporation * * * (etc.). Partners are not to 
be included in the count of employees for coverage or eligibility, even 
if their names appear on the payroll. However, equity owners (e.g., 
stockholders) of a corporation may also be employees of the corporation 
and, as such, when their names appear on the payroll, are included in 
such employee counts and they may also become eligible employees. No 
change will be made in the Final Rule in this regard as the 
determination of whether such an individual is an employee is case 
specific.
    The National Community Mental Healthcare Council observes that the 
definition of an individual who is incapable of self-care is deficient 
in that it only addresses activities of daily living (ADLs), which 
relate to physical incapacity, but does not address those with mental 
illness. They recommend the definition be expanded to include 
``instrumental activities of daily living'' (IADLs). Their 
recommendation is appropriate and the language in the Final Rule in 
Sec. 825.113(c)(1) has been amended to include IADLs.
    The Council also urges that the definition of health care provider 
(HCP) be expanded to mental health professionals and mental health 
services. The definition of HCP has been amended to include any HCP 
from whom the employer or a group health plan's benefits manager will 
accept certifications. This change should address this concern.

IX. Appendix B, Appendix C, and Appendix E

    A number of comments which raised concerns about Form WH-380, the 
optional form to obtain medical certification, have been addressed 
above and will not be repeated herein.
    Three commenters, including The First Church of Christ, Scientist, 
offered alternative forms to be used for the medical certification. The 
concern of the Christian Scientists was that they are unable to provide 
a medical diagnosis of the employee. As the Department has already 
decided to revise the medical certification form, the concerns of these 
commenters will be addressed by the revision to the extent appropriate 
in keeping with the statutory language. Further, we believe having 
separate or special forms for differing kinds of health care providers 
would prove confusing, and may, in fact, result in more requests for 
second and third medical opinions.
    G.M. Smith Associates, Inc., recommends the form include a letter 
from the employee to the health care provider that requests referral to 
a board certified specialist if necessary. The form should ask the 
health care provider if going to work will harm the employee and 
whether the illness/injury precludes the employee from travel or being 
at work. If either of these questions are answered affirmatively, the 
health care provider would provide a date on which the employee will be 
available for limited duties.
    There is no statutory basis for obtaining the additional 
information requested by this commenter. For example, Sec. 825.702 
provides that an employee may not be required to accept a light or 
limited duty position. The Department is unable to add the requested 
information to the form as it does not comport with the statutory 
provisions.

Appendix C

    The Women's Legal Defense Fund points out that information is not 
included on the notice that notes potential application of either more 
beneficial State statutes or more beneficial provisions of a Collective 
Bargaining Agreement. They recommend separate notices for employers in 
each of the States that give broader rights. They suggest a statement 
in the notice that employees should consult with union representatives, 
that notices be provided to employers in Spanish, that the Department 
develop materials for employees on how to obtain FMLA leave, and that 
the Department install an 800-hotline number for FMLA inquiries and 
complaints.
    The purpose of the notice is to outline the essential provisions 
and protections of FMLA to employees, much in the same manner as the 
notice for FLSA. The size of the poster, whether 8\1/2\ inches x 11 
inches (the size of the FMLA poster) or 14 inches x 17 inches (the size 
of the FLSA poster), would not accommodate every possible nuance of the 
FMLA. Employees are advised to contact the nearest office of the Wage 
and Hour Division for additional or more specific information. The 
notice has been available in Spanish for some time. The Department has 
published State/Federal comparisons of family and medical leave 
statutes. These informational materials are available to employees as 
well as employers, thus, separate notices for each State are 
unnecessary. The Department has published a Fact Sheet and a Guide to 
Compliance with the FMLA for use by employees and employers alike to 
obtain more specific, non-technical information regarding the statute. 
Section 825.301(a)(2) instructs employers they may use the 
[[Page 2234]] Department's Fact Sheet for general distribution to 
employees when the employer does not have an employee handbook in which 
FMLA policies have been incorporated. The Department has made no final 
decision on the viability of installing an 800 number.

Appendix E

    The Department had promised earlier that if the IRS published 
guidance concerning the relationship between FMLA and certain aspects 
of the tax code, e.g., COBRA, the Department would include the IRS 
guidance as an appendix to the final rule. IRS published guidance 
concerning COBRA in Notice 94-103, appearing in Internal Revenue 
Bulletin No. 1994-51, dated December 19, 1994. A copy of the notice is 
attached to the regulation as Appendix E.

X. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, Public Law 96-354 (94 Stat. 
1164; 5 U.S.C. 601 et seq.), Federal agencies are required to analyze 
the anticipated impact of proposed rules on small entities. Because 
FMLA applies only to private employers of 50 or more employees (and to 
all public agencies regardless of the number of employees employed), it 
covers only the larger private employers--in total, about five percent 
of all possible employers, or approximately 300,000. Also, FMLA 
requires covered employers to grant only unpaid leave to eligible 
employees for specified reasons. For these reasons, the Department 
concluded that the implementing rules likely would not have a 
``significant economic impact on a substantial number of small 
entities'' within the meaning of the Regulatory Flexibility Act. The 
Acting Chief Counsel for Advocacy of the U.S. Small Business 
Administration (SBA) filed official comments on the interim final FMLA 
rules which disagreed with DOL's conclusion. SBA contended essentially 
that the FMLA regulations will have a significant impact on all 
businesses covered by the FMLA, the vast majority of which, SBA 
contends, are small.
    The definition of ``small'' business varies considerably, depending 
upon the policy issues and circumstances under review, the industry 
being studied, and the measures used. SBA generally uses employment 
data as a basis for size comparisons, with firms having fewer than 100 
employees or fewer than 500 employees defined as small.\1\

    \1\The State of Small Business: A Report of the President 
Transmitted to the Congress (1991), Together with The Annual Report 
on Small Business and Competition of the U.S. Small Business 
Administration (United States Government Printing Office, 
Washington, D.C., 1991), p. 19. A more detailed breakdown also used 
by SBA is: under 20 employees, very small; 20-99, small; 100-499, 
medium-sized; and over 500, large. On the other hand, the size 
standard established by SBA at 13 CFR Sec. 121.601 is 500 employees 
for most industries.
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    Statistics published by the Internal Revenue Service indicate that 
in 1990, of the estimated 20.4 million business tax returns that were 
filed (4.4 million for corporations, 1.8 million for partnerships, and 
14.2 million for sole proprietorships), fewer than 7,000 would qualify 
as large businesses if an employment measure of 500 employees or less 
were used to define small and medium-sized businesses.\2\ The SBA 
stated in its comments that, based upon 1990 Census tabulations, there 
are 105,720 firms which employ between 50 and 99 employees; 55,249 
firms which employ between 100 and 249 employees; and 14,999 firms 
which employ between 250 and 499 employees, providing a total of 
175,968 businesses with fewer than 500 employees.\3\ Thus, the SBA 
suggests that if an employment measure of 500 employees is used to 
define ``small'' businesses, 92.4 percent of all those businesses which 
are affected by the FMLA and its implementing regulations are ``small'' 
businesses.\4\

    \2\U.S. Department of the Treasury, Internal Revenue Service, 
SOI Bulletin (Spring 1990) Table 19; reprinted by SBA in The State 
of Small Business (1991), Ibid., p. 21.
    \3\U.S. Department of Commerce, Bureau of the Census, Current 
Population Survey, 1990. These tabulations contain firms with 
employees only; the self-employed were excluded. The self-employed 
would not constitute a covered ``employer'' for purposes of the FMLA 
and, therefore, these tabulations tend to understate the actual 
number of ``small'' businesses that are excluded from FMLA's 
coverage and overstate the proportion of small businesses that are 
covered by the FMLA.
    \4\This 92.4 percent figure appears misleading to us for 
measuring the universe of employers at issue for purposes of this 
analysis in that it excludes the very substantial number of small 
businesses employing fewer than 50 employees which would not be 
covered by the FMLA and, therefore, would not be impacted by the 
rule.
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    In fact, however, this analysis overstates the number of ``small'' 
businesses that are actually affected by FMLA's requirements because 
they must grant unpaid leave only to employees who are defined as 
``eligible'' under the law. It is conceivable, for example, that a 
covered ``small'' business with 250 employees working at several 
geographically dispersed worksites would have no employees who are 
eligible to take FMLA leave (because there would be fewer than 50 
employees working within 75 miles of each worksite). Similarly, an 
employer with a very transient workforce, with all part-time employees, 
may have no eligible employees.\5\

    \5\Not every employee of a covered employer is eligible for FMLA 
leave. To be eligible, an employee must work for a covered employer 
and have worked for at least 12 months and 1,250 hours in the 12 
months preceding the leave, and work at a location where the 
employer employs at least 50 employees within 75 miles of the 
worksite. Sec. 101(2) of FMLA; 29 CFR Sec. 825.110.
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    Assuming the appropriateness of the 500-employee criterion applied 
by SBA to define ``small'' businesses for purposes of FMLA, and 
acknowledging that there are a number of small businesses that would be 
covered by the FMLA rules, we note that the Congress, in selecting the 
50-employee coverage threshold, frequently characterized the new 
legislation as exempting smaller businesses and applying only to larger 
ones. We also note the overwhelming majority of small businesses that 
are not subject to the FMLA. Information compiled by the U.S. 
Department of Commerce and reported in County Business Patterns, 1990, 
indicates that there are 5,862,938 establishments employing between one 
and 49 employees; 175,375 establishments employing between 50 and 99 
employees; 97,742 establishments employing between 100 and 249 
employees; 24,334 establishments employing between 250 and 499 
employees; 9,592 establishments employing between 500 and 999 
employees; and 5,582 employing 1,000 or more employees.\6\ These 
numbers confirm the Department's earlier estimates that roughly five 
percent (i.e., 312,625) of all establishments would be covered by FMLA 
at the 50-employee coverage threshold. Moreover, these numbers suggest 
further that, if SBA's 500-employee threshold for defining ``small'' 
businesses is applied, less than five percent of all small businesses 
would be covered by the FMLA, while more than 95 percent of all small 
businesses would be exempted from FMLA coverage.

    \6\U.S. Department of Commerce, Bureau of the Census, County 
Business Patterns, 1990 (CPB-90-1), issued January 1993, Table 1b. 
These tabulations exclude most government and railroad employees, 
and self-employed persons.
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    In addition, William M. Mercer, Incorporated and the Institute of 
Industrial Relations at the University of California, Berkeley jointly 
conducted a survey of nearly 300 employers on the FMLA in November 
1993. This report notes that, before FMLA was passed, there was 
opposition to mandated leave based on the idea that small business 
would be negatively impacted by such leave. However, small employers 
(those with less than 200 employees) who [[Page 2235]] responded to 
this survey were not significantly more likely to anticipate major 
financial costs or great administrative difficulty in complying with 
the FMLA than large employers. In response to questions on the 
California-mandated family leave law (in effect since January 1992), 
small employers reported the lowest level of utilization of family 
leave and no higher direct and indirect financial costs than did larger 
employers. In fact, the only employers that reported any ``major 
costs'' associated with California-mandated leave were those that 
employed 5,000 or more employees. A greater percentage of large 
employers had experienced disagreements with employees over family 
leave issues. Large employers, however, were also most likely to note a 
beneficial effect on absenteeism, employee morale, public relations, 
and supervisory relationships as a result of mandated leave. Small 
employers, in contrast, were most likely to note a beneficial effect on 
worker productivity and co-worker relationships.
    For its part, the Department made a conscious effort to adopt the 
least burdensome regulatory alternatives (consistent with the statute) 
in order to reduce the burden on all employers, including small 
employers. In particular, recordkeeping requirements were kept to the 
minimum level necessary for confirming employer compliance with FMLA's 
statutory leave provisions. In addition, to ease administrative burdens 
on all employers, including small entities, employee notification 
requirements that apply when employees request FMLA leave were 
summarized in Sec. 825.301(c) of the regulations, and DOL made 
available a prototype notice which employers could adapt for their own 
use to meet the specific notice requirements (see Sec. 825.301 (c)(8)).
    The Department also engaged in extensive education and outreach 
efforts. We prepared and made available a Fact Sheet and a Compliance 
Guide to the FMLA, to assist all employers in understanding and meeting 
their compliance obligations. Because FMLA does not diminish any 
greater family or medical leave rights provided by State or local law, 
DOL also prepared and distributed comparisons of State and Federal 
family and medical leave laws, indicating which law provided the 
greater employee rights or benefits for compliance purposes.\7\

    \7\The Department's Women's Bureau has also distributed to the 
public a comparison of State maternity/family leave laws since June 
1993.
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    Thus, DOL continues to believe that the extraordinary measures 
which it has taken in connection with the implementation of the FMLA 
will ease the burdens of compliance on all employers, including small 
employers, and that compliance with the FMLA will not have a 
significant economic impact on a substantial number of small entities. 
This conclusion is reinforced by available research which shows that 
costs associated with implementing the FMLA are not significant for 
covered businesses including covered ``small'' entities with eligible 
employees.
    In conclusion, even assuming a 500-employee size standard, only 5 
percent of small employers are covered by FMLA. Based on our review of 
the studies conducted, the Department concludes, therefore, that the 
FMLA rules would not likely have a significant economic impact on a 
substantial number of small entities.
    Because of its belief that FMLA significantly impacts a substantial 
number of small entities, the SBA also suggested in its comments a 
number of regulatory alternatives in certain areas that it believed 
would ease the burden on small entities, as follows:
    Exclude Part-time Employees When Determining Employer Coverage 
Under FMLA: The SBA suggested that DOL reduce the coverage of small 
businesses by changing the 50-employee threshold for coverage to 
exclude part-time workers from the count. Because small entities employ 
more part-time workers than larger firms, SBA stated that inclusion of 
part-time employees will increase the coverage of the FMLA to firms 
``that otherwise might not have been covered.'' FMLA's coverage 
criteria are statutory and, as specifically stated in the legislative 
history, it was the clear intention of the Congress that all employees 
of an employer are to be included in the count, including part-time 
employees. (``It is not necessary that every employee actually perform 
work on each working day to be counted for this purpose. * * * 
Similarly, part-time employees and employees on leaves of absence would 
be counted as `employed for each working day' so long as they are on 
the employer's payroll for each day of the workweek.'' Report of the 
Committee on Labor and Human Resources (S.5), Senate Report 103-3 
(January 27, 1993), p. 22.)
    Clarify Definitions of ``Serious Health Condition'' and ``Medical 
Necessity'' for FMLA Leave: SBA observed that the definition of 
``serious health condition'' (which is statutory) was broadly 
inclusive, and suggested that employers would be required to look to 
FMLA's legislative history in order to determine whether an employee's 
condition is considered a ``medical necessity'' that justifies FMLA 
leave. SBA mistakenly presumes that this is a judgment that the statute 
and regulations permit an employer to make. If the health condition 
meets the definition in the regulations at Sec. 825.114 and, as 
provided in Secs. 825.305-825.307, an employee furnishes a completed 
DOL-prescribed medical certification from the health care provider, the 
only recourse available to an employer that doubts the validity of the 
certification is to request a second medical opinion at the employer's 
expense. Employers may not substitute their personal judgments for the 
test in the regulations or the medical opinions of the health care 
providers of employees or their family members to determine whether an 
employee is entitled to FMLA leave for a serious health condition.
    Expand the ``Key Employee'' Definition to Include Job Descriptions 
Instead of Salary: Under the ``key employee'' exception, employers may 
deny job restoration in certain cases (see Secs. 825.217-825.219). SBA 
recommended that DOL expand the regulatory definition of ``key 
employee'' to include an employee's job description in lieu of salary, 
because there may be situations, particularly in small entities, where 
lower salaried employees perform on-going employment functions that are 
vital to the business and prevent economic injury to the employer's 
operation but must be reinstated due to the comparatively low salary 
that is paid. We note first that it seems unlikely that an employer 
would not want to restore such an employee to employment if the 
employee performs the vital role indicated, but that is beside the 
point. The provisions applicable to the ``key employee'' exception are 
statutory and state, specifically, that the employees affected must be 
``* * * a salaried eligible employee who is among the highest paid 10 
percent of the employees employed by the employer within 75 miles of 
the facility at which the employee is employed'' (see Sec. 104(b)(2) of 
the FMLA). There is no authority under these provisions of the law to 
ignore the salary paid to ``key employees.'' SBA's suggestion directly 
contravenes the statute and cannot be adopted by regulation.
    Require a Four-Hour Minimum Absence for Intermittent (or Reduced 
Leave) Schedules: FMLA allows eligible employees to take leave 
intermittently or on a reduced leave schedule in certain cases. The 
regulations state that an employer may not limit the period of 
intermittent leave to a minimum number of hours. SBA stated that DOL 
could significantly reduce the impact of [[Page 2236]] the FMLA on 
small entities by imposing a minimum leave requirement, and suggested a 
four-hour minimum would both enable an employee to work a half-day and 
permit the employer to ease administrative burdens in complying with 
the FMLA regulations. Permitting an employer to impose a four-hour 
minimum absence requirement would unnecessarily and impermissibly erode 
an employee's FMLA leave entitlement for reasons not contemplated under 
FMLA (see also the discussion of Sec. 825.203, above). Section 
102(b)(1) of the FMLA provides that ``* * * [t]he taking of leave 
intermittently or on a reduced leave schedule pursuant to this 
paragraph shall not result in a reduction in the total amount of leave 
to which the employee is entitled * * * beyond the amount of leave 
actually taken.'' An employee may only take FMLA leave for reasons that 
qualify under the Act, and may not be charged more leave than is 
necessary to address the need for FMLA leave. Time that an employee is 
directed by the employer to be absent (and not requested or required by 
the employee) in excess of what the employee requires for an FMLA 
purpose would not qualify as FMLA leave and, therefore, may not be 
charged against the employee's FMLA leave entitlement.
    ``Small'' Business Handbook: SBA also suggested that DOL consider 
providing a handbook detailing compliance requirements for small 
entities, i.e., comparisons of State and Federal family and medical 
leave benefits and a summary of employee notification requirements, to 
ease administrative burdens on small entities. As noted above, we 
prepared and distributed comparisons of State and Federal family and 
medical leave laws, indicating which law provided the greater employee 
rights or benefits for compliance purposes, and distributed Fact Sheets 
and Compliance Guides which summarized compliance requirements.
    In conclusion, the Department believes that the available data and 
studies on the cost impact of the FMLA generally support the 
Department's conclusion that the implementing regulations will likely 
not have a significant economic impact on a substantial number of small 
entities within the meaning of the Regulatory Flexibility Act. The 
regulatory revisions suggested by the SBA to ease compliance 
requirements for small entities are inconsistent with the statute or 
its legislative history and cannot be adopted by regulation.

XI. Executive Order 12866

    The Department prepared an analysis of the anticipated cost impact 
of the FMLA rules to meet the regulatory impact analysis (cost/benefit) 
requirements of former Executive Order 12291 on Federal Regulations. 
The Department's analysis was principally based on previous analyses of 
the cost impact of prior versions of FMLA legislation pending before 
the U.S. Congress which were conducted by the U.S. General Accounting 
Office (GAO). The GAO's latest report on FMLA legislation, updated to 
reflect the 1993 enactment, estimated the cost to employers of 
maintaining health insurance coverage for workers on unpaid family and 
medical leave at $674 million per year (GAO/HRD-93-14R; February 1, 
1993). The GAO's estimates assumed that employers would experience no 
measurable costs under the law beyond those of maintaining group health 
insurance during periods of permitted absences, based on a survey of 
selected firms in the Detroit, Michigan and Charleston, South Carolina 
areas. It was the GAO's view that its estimates likely overstated 
actual costs to employers for leave granted under the new law because 
the GAO could not adjust for the mitigating influence of pre-existing 
leave policies already provided by employers either voluntarily or to 
comply with other mandates such as State or local laws or collective 
bargaining agreements (34 States, the District of Columbia, and Puerto 
Rico provide for some type of job-protected leave guarantee by law).
    While several commenters expressed a general view that FMLA would 
have an adverse impact on business, or summarized previous studies that 
tried to measure the economic impact of FMLA, only one comment was 
received concerning DOL's impact analysis included in the preamble to 
the Interim Final Rule (the Department specifically requested comments 
on the estimates of the impact of the FMLA and the implementing 
regulations). The Los Angeles County Metropolitan Transportation 
Authority disagreed with GAO's estimates of cost to employers of 
complying with various FMLA provisions. This commenter believed the 
cost estimates are significantly understated because they do not take 
into account the productivity losses while employees are out on leave, 
and the costs of hiring and training temporary replacement workers. The 
Department pointed out in the preamble to the Interim Final Rule (58 FR 
31811; June 4, 1993) that quantifying the impact of the FMLA is highly 
dependent on numerous assumptions which are severely constrained by 
limitations in available data. The regulatory impact analysis noted the 
existence of differing views on this issue, citing specifically the 
Minority Views contained in the House Report (H.R. Rept. 103-8, 103d 
Cong., 1st Sess., p. 60), which characterized the GAO estimates as 
understated either because assumptions were inconsistent with the 
legislative provisions or with the conclusions of other studies. The 
preamble to the Interim Final Rule noted in particular the issues of 
productivity losses and training costs for temporary replacements cited 
in studies by the former American Society for Personnel Administrators 
(now the Society for Human Resource Management) and the SBA. 
Furthermore, studies prepared subsequent to the June 1993 Interim Final 
FMLA rules suggest that our initial assessment of GAO's estimates as 
being reasonable remains valid.
    The Senate Committee on Labor and Human Resources noted from 
testimony by the Commissioner of the Oregon Bureau of Labor and 
Industries that employers in the State of Oregon, when confronted with 
implementing similar requirements at the State level, reported little 
or no difficulty in implementing the law, and none had reduced other 
existing benefits to comply with the new statutory family leave 
requirements (Report of the Committee on Labor and Human Resources 
(S.5), Report 103-3, January 27, 1993, p. 14).
    Further, according to a three-year study conducted in Minnesota, 
Oregon, Rhode Island, and Wisconsin by the Families and Work Institute, 
sizable majorities of covered employers reported that the State laws 
were neither costly nor burdensome to implement (Ibid.). This study 
suggested that the availability of unpaid leave required by the new 
State laws had no impact on the length of leave taken by working 
mothers and only a slight impact on the length of leaves taken by 
fathers. The survey found that most companies, even the smallest, 
already offered considerable amounts of leave to working mothers. Small 
companies granted leave as often as larger companies. Even among 
companies with fewer than 10 employees, 79 percent indicated they 
guaranteed the jobs of women who took leave. The survey found that, 
prior to passage of the State laws, 83 percent of all employers 
surveyed provided job-guaranteed leave to biological mothers for 
childbirth, and 67 percent of those maintained health benefits during 
the maternity leave. Sixty percent of all [[Page 2237]] employers 
similarly allowed fathers time off for newborns. Among other highlights 
from the survey, 91 percent of employers interviewed in the four States 
reported no difficulty with implementation of the State parental leave 
laws; the majority of employers reported no increase in costs for 
training, administration or unemployment insurance as a result of the 
State laws; 67 percent reported they most often relied on other 
employees to do the work of an employee on leave, while 23 percent 
reported they most often hired a temporary replacement; 94 percent 
reported that the leave laws had not forced them to reduce other 
benefits in order to pay for maintaining the health benefits of parents 
on leave; the percentage of working women who took unpaid leave for the 
birth of a child (78 percent) was unaffected by the enactment of the 
State laws; and the average duration of the leaves remained virtually 
unchanged by enactment of the State laws.
    In a 1990 study by Professors Eileen Trzcinski and William Alpert 
commissioned by the SBA, a nationwide survey of business executives 
examined the impact on businesses of providing family and medical 
leave. The SBA study found that the costs of permanently replacing an 
employee are significantly greater than the costs of granting an 
employee's request for leave--terminations due to illness, disability, 
pregnancy, and childbirth cost employers from $1,131 to $3,152 per 
termination, compared to $.97 to $97.78 per week for granting workers' 
requests for leave (dependent on size of employer and managerial status 
of employee). Ibid., p. 17.
    A 1992 study by the Families and Work Institute also concluded that 
providing unpaid parental leave is more cost-effective for employers 
than permanently replacing employees--20 percent of the employee's 
annual salary, compared to 75 percent to 150 percent for permanently 
replacing an employee (Ibid.).
    The Senate Committee Report concluded that additional costs to 
employers as a result of FMLA are minimal; that there is no evidence of 
greater business losses where State laws require similar family and 
medical leave; and, based on a 1989 GAO study of similar legislation, 
there would be no measurable net costs to business from replacing 
workers or lost productivity (costs result exclusively from 
continuation of health insurance coverage for employees on unpaid 
leave). Ibid., p. 42.
    In addition to the findings of the studies identified by the Senate 
committee report, according to a September 1993 survey of benefit 
managers by Hewitt Associates, an international consulting firm, most 
employers offer more generous leave policies than required by the FMLA. 
Nearly all (95 percent) of the 628 participants indicated that their 
policies go beyond the minimum requirements of the law. Nine of ten 
employers (92 percent) continue benefits other than health care for 
employees while on FMLA leave. Nearly half of the employers (45 
percent) extend FMLA leave to employees at locations with fewer than 50 
employees within 75 miles, 44 percent allow longer than 12 weeks of 
leave, and 30 percent allow FMLA leave for employees with less than 12 
months of service. Most employers expect only a small percentage of 
employees to avail themselves of their FMLA policies in any given year. 
Nine of ten employers expect less than 5 percent of their employees to 
take FMLA leave in a given year; three of ten employers expect less 
than one percent of their employees to take FMLA leave in a year.
    In addition, as discussed above, William M. Mercer, Incorporated 
and the Institute of Industrial Relations at the University of 
California, Berkeley jointly conducted a survey of nearly 300 employers 
on the FMLA in November 1993. The only employers that reported any 
``major costs'' associated with California-mandated leave were those 
that employed 5,000 or more employees. A greater percentage of large 
employers had experienced disagreements with employees over family 
leave issues. Large employers, however, were also most likely to note a 
beneficial effect on absenteeism, employee morale, public relations, 
and supervisory relationships as a result of mandated leave. Small 
employers, in contrast, were most likely to note a beneficial effect on 
worker productivity and co-worker relationships.
    A full discussion of alternatives considered is included in the 
preamble to the regulations, set forth above, under each of the 
relevant sections.

XI. Document Preparation

    This document was prepared under the direction and control of Maria 
Echaveste, Administrator, Wage and Hour Division, Employment Standards 
Administration, U.S. Department of Labor.

XII. List of Subjects in 29 CFR Part 825

    Employee benefit plans, Health, Health insurance, Labor management 
relations, Maternal and child health, Teachers.

    Signed in Washington, DC, this 30th day of December, 1994.
Robert B. Reich,
Secretary of Labor.

    Title 29, Chapter V, Subchapter C, ``Other Laws'', is amended by 
revising Part 825 to read as follows:

PART 825--THE FAMILY AND MEDICAL LEAVE ACT OF 1993

Subpart A--What is the Family and Medical Leave Act, and to Whom Does 
It Apply?
Sec.
825.100  What is the Family and Medical Leave Act?
825.101  What is the purpose of the Act?
825.102  When was the Act effective?
825.103  How did the Act affect leave in progress on, or taken 
before, the effective date of the Act?
825.104  What employers are covered by the Act?
825.105  In determining whether an employer is covered by FMLA, what 
does it mean to employ 50 or more employees for each working day 
during each of 20 or more calendar workweeks in the current or 
preceding calendar year?
825.106  How is ``joint employment'' treated under FMLA?
825.107  What is meant by ``successor in interest''?
825.108  What is a ``public agency''?
825.109  Are Federal agencies covered by these regulations?
825.110  Which employees are ``eligible'' to take leave under FMLA?
825.111  In determining if an employee is ``eligible'' under FMLA, 
how is the determination made whether the employer employs 50 
employees within 75 miles of the worksite where the employee needing 
leave is employed?
825.112  Under what kinds of circumstances are employers required to 
grant family or medical leave?
825.113  What do ``spouse,'' ``parent,'' and ``son or daughter'' 
mean for purposes of an employee qualifying to take FMLA leave?
825.114  What is a ``serious health condition'' entitling the 
employee to FMLA leave?
825.115  What does it mean that ``the employee is unable to perform 
the functions of the position of the employee''?
825.116  What does it mean that an employee is ``needed to care 
for'' a family member?
825.117  For an employee seeking intermittent FMLA leave or leave on 
a reduced leave schedule, what is meant by ``the medical necessity 
for'' such leave?
825.118  What is a ``health care provider''? [[Page 2238]] 
Subpart B--What Leave Is an Employee Entitled to Take Under the Family 
and Medical Leave Act?
825.200  How much leave may an employee take?
825.201  If leave is taken for the birth of a child, or for 
placement of a child for adoption or foster care, when must the 
leave be concluded?
825.202  How much leave may a husband and wife take if they are 
employed by the same employer?
825.203  Does FMLA leave have to be taken all at once, or can it be 
taken in parts?
825.204  May an employer transfer an employee to an ``alternative 
position'' in order to accommodate intermittent leave or a reduced 
leave schedule?
825.205  How does one determine the amount of leave used where an 
employee takes leave intermittently or on a reduced leave schedule?
825.206  May an employer deduct hourly amounts from an employee's 
salary, when providing unpaid leave under FMLA, without affecting 
the employee's qualifications for exemption as an executive, 
administrative, or professional employee, or when utilizing the 
fluctuating workweek method for payment of overtime compensation, 
under the Fair Labor Standards Act?
825.207  Is FMLA leave paid or unpaid?
825.208  Under what circumstances may an employer designate leave, 
paid or unpaid, as FMLA leave and, as a result, count it against the 
employee's total FMLA leave entitlement?
825.209  Is an employee entitled to benefits while using FMLA leave?
825.210  How may employees on FMLA leave pay their share of health 
benefit premiums?
825.211  What special health benefits maintenance rules apply to 
multi-employer health plans?
825.212  What are the consequences of an employee's failure to make 
timely health plan premium payments?
825.213  May an employer recover costs it incurred for maintaining 
``group health plan'' or non-health benefits coverage during FMLA 
leave?
825.214  What are an employee's rights on returning to work from 
FMLA leave?
825.215  What is an equivalent position?
825.216  Are there any limitations on an employer's obligation to 
reinstate an employee?
825.217  What is a ``key employee''?
825.218  What does ``substantial and grievous economic injury'' 
mean?
825.219  What are the rights of a key employee?
825.220  How are employees protected who request leave or otherwise 
assert FMLA rights?
Subpart C--How Do Employees Learn of Their FMLA Rights and Obligations, 
and What Can an Employer Require of an Employee?
825.300  What posting requirements does the Act place on employers?
825.301  What other notices to employees are required of employers 
under the FMLA?
825.302  What notice does an employee have to give an employer when 
the need for FMLA leave is foreseeable?
825.303  What are the requirements for an employee to furnish notice 
to an employer where the need for FMLA leave is not foreseeable?
825.304  What recourse do employers have if employees fail to 
provide the required notice?
825.305  When must an employee provide medical certification to 
support FMLA leave?
825.306  How much information may be required in medical 
certifications of a serious health condition?
825.307  What may an employer do if it questions the adequacy of a 
medical certification?
825.308  Under what circumstances may an employer request subsequent 
recertifications of medical conditions?
825.309  What notice may an employer require regarding an employee's 
intent to return to work?
825.310  Under what circumstances may an employer require that an 
employee submit a medical certification that the employee is able 
(or unable) to return to work (e.g., a ``fitness-for-duty'' report)?
825.311  What happens if an employee fails to satisfy the medical 
certification requirements?
825.312  Under what circumstances may a covered employer refuse to 
provide FMLA leave or reinstatement to eligible employees?

Subpart D--What Enforcement Mechanisms Does FMLA Provide?

825.400  What may employees do who believe that their rights under 
FMLA have been violated?
825.401  Where may an employee file a complaint of FMLA violations 
with the Federal government?
825.402  How is an employer notified of a violation of the posting 
requirement?
825.403  How may an employer appeal the assessment of a penalty for 
willful violation of the posting requirement?
825.404  What are the consequences of an employer not paying the 
penalty assessment after a final order is issued?
Subpart E--What Records Must be Kept to Comply With the FMLA?
825.500  What Records must an employer keep to comply with the FMLA?
Subpart F--What Special Rules Apply to Employees of Schools?
825.600  To whom do the special rules apply?
825.601  What limitations apply to the taking of intermittent leave 
or leave on a reduced leave schedule?
825.602  What limitations apply to the taking of leave near the end 
of an academic term?
825.603  Is all leave taken during ``periods of a particular 
duration'' counted against the FMLA leave entitlement?
825.604  What special rules apply to restoration to ``an equivalent 
position?''
Subpart G--How do Other Laws, Employer Practices, and Collective 
Bargaining Agreements Affect Employee Rights Under FMLA?
825.700  What if an employer provides more generous benefits than 
required by FMLA?
825.701  Do State laws providing family and medical leave still 
apply?
825.702  How does FMLA affect Federal and State anti-discrimination 
laws?

Subpart H--Definitions

825.800  Definitions.

Appendix A to Part 825--Index

Appendix B to Part 825--Certification of Health Care Provider

Appendix C to Part 825--Notice to Employees of Rights under FMLA (WH 
Publication 1420)

Appendix D to Part 825--Prototype Notice: Employer Response to Employee 
Request for Family and Medical Leave (Form WH-381)

Appendix E to Part 825--IRS Notice Discussing Relationship Between FMLA 
and COBRA

    Authority: 29 U.S.C. 2654; Secretary's Order 1-93 (58 FR 21190).

Subpart A--What is the Family and Medical Leave Act, and to Whom 
Does It Apply?


Sec. 825.100   What is the Family and Medical Leave Act?

    (a) The Family and Medical Leave Act of 1993 (FMLA or Act) allows 
``eligible'' employees of a covered employer to take job-protected, 
unpaid leave, or to substitute appropriate paid leave if the employee 
has earned or accrued it, for up to a total of 12 workweeks in any 12 
months because of the birth of a child and to care for the newborn 
child, because of the placement of a child with the employee for 
adoption or foster care, because the employee is needed to care for a 
family member (child, spouse, or parent) with a serious health 
condition, or because the employee's own serious health condition makes 
the employee unable to perform the functions of his or her job (see 
Sec. 825.306(a)(3)). In certain cases, this leave may be taken on an 
intermittent basis rather than all at once, or the employee may work a 
part-time schedule.
    (b) An employee on FMLA leave is also entitled to have health 
benefits [[Page 2239]] maintained while on leave as if the employee had 
continued to work instead of taking the leave. If an employee was 
paying all or part of the premium payments prior to leave, the employee 
would continue to pay his or her share during the leave period. The 
employer may recover its share only if the employee does not return to 
work for a reason other than the serious health condition of the 
employee or the employee's immediate family member, or another reason 
beyond the employee's control.
    (c) An employee generally has a right to return to the same 
position or an equivalent position with equivalent pay, benefits and 
working conditions at the conclusion of the leave. The taking of FMLA 
leave cannot result in the loss of any benefit that accrued prior to 
the start of the leave.
    (d) The employer has a right to 30 days advance notice from the 
employee where practicable. In addition, the employer may require an 
employee to submit certification from a health care provider to 
substantiate that the leave is due to the serious health condition of 
the employee or the employee's immediate family member. Failure to 
comply with these requirements may result in a delay in the start of 
FMLA leave. Pursuant to a uniformly applied policy, the employer may 
also require that an employee present a certification of fitness to 
return to work when the absence was caused by the employee's serious 
health condition (see Sec. 825.311(c)). The employer may delay 
restoring the employee to employment without such certificate relating 
to the health condition which caused the employee's absence.


Sec. 825.101  What is the purpose of the Act?

    (a) FMLA is intended to allow employees to balance their work and 
family life by taking reasonable unpaid leave for medical reasons, for 
the birth or adoption of a child, and for the care of a child, spouse, 
or parent who has a serious health condition. The Act is intended to 
balance the demands of the workplace with the needs of families, to 
promote the stability and economic security of families, and to promote 
national interests in preserving family integrity. It was intended that 
the Act accomplish these purposes in a manner that accommodates the 
legitimate interests of employers, and in a manner consistent with the 
Equal Protection Clause of the Fourteenth Amendment in minimizing the 
potential for employment discrimination on the basis of sex, while 
promoting equal employment opportunity for men and women.
    (b) The enactment of FMLA was predicated on two fundamental 
concerns--the needs of the American workforce, and the development of 
high-performance organizations. Increasingly, America's children and 
elderly are dependent upon family members who must spend long hours at 
work. When a family emergency arises, requiring workers to attend to 
seriously-ill children or parents, or to newly-born or adopted infants, 
or even to their own serious illness, workers need reassurance that 
they will not be asked to choose between continuing their employment, 
and meeting their personal and family obligations or tending to vital 
needs at home.
    (c) The FMLA is both intended and expected to benefit employers as 
well as their employees. A direct correlation exists between stability 
in the family and productivity in the workplace. FMLA will encourage 
the development of high-performance organizations. When workers can 
count on durable links to their workplace they are able to make their 
own full commitments to their jobs. The record of hearings on family 
and medical leave indicate the powerful productive advantages of stable 
workplace relationships, and the comparatively small costs of 
guaranteeing that those relationships will not be dissolved while 
workers attend to pressing family health obligations or their own 
serious illness.


Sec. 825.102  When was the Act effective?

    (a) The Act became effective on August 5, 1993, for most employers. 
If a collective bargaining agreement was in effect on that date, the 
Act's effective date was delayed until February 5, 1994, or the date 
the agreement expired, whichever date occurred sooner. This delayed 
effective date was applicable only to employees covered by a collective 
bargaining agreement that was in effect on August 5, 1993, and not, for 
example, to employees outside the bargaining unit. Application of FMLA 
to collective bargaining agreements is discussed further in 
Sec. 825.700(c).
    (b) The period prior to the Act's effective date must be considered 
in determining employer coverage and employee eligibility. For example, 
as discussed further below, an employer with no collective bargaining 
agreements in effect as of August 5, 1993, must count employees/
workweeks for calendar year 1992 and calendar year 1993. If 50 or more 
employees were employed during 20 or more workweeks in either 1992 or 
1993(through August 5, 1993), the employer was covered under FMLA on 
August 5, 1993. If not, the employer was not covered on August 5, 1993, 
but must continue to monitor employment levels each workweek remaining 
in 1993 and thereafter to determine if and when it might become 
covered.


Sec. 825.103  How did the Act affect leave in progress on, or taken 
before, the effective date of the Act?

    (a) An eligible employee's right to take FMLA leave began on the 
date that the Act went into effect for the employer (see the discussion 
of differing effective dates for collective bargaining agreements in 
Secs. 825.102(a) and 825.700(c)). Any leave taken prior to the Act's 
effective date may not be counted for purposes of FMLA. If leave 
qualifying as FMLA leave was underway prior to the effective date of 
the Act and continued after the Act's effective date, only that portion 
of leave taken on or after the Act's effective date may be counted 
against the employee's leave entitlement under the FMLA.
    (b) If an employer-approved leave was underway when the Act took 
effect, no further notice would be required of the employee unless the 
employee requested an extension of the leave. For leave which commenced 
on the effective date or shortly thereafter, such notice must have been 
given which was practicable, considering the foreseeability of the need 
for leave and the effective date of the statute.
    (c) Starting on the Act's effective date, an employee is entitled 
to FMLA leave if the reason for the leave is qualifying under the Act, 
even if the event occasioning the need for leave (e.g., the birth of a 
child) occurred before the effective date (so long as any other 
requirements are satisfied).


Sec. 825.104  What employers are covered by the Act?

    (a) An employer covered by FMLA is any person engaged in commerce 
or in any industry or activity affecting commerce, who employs 50 or 
more employees for each working day during each of 20 or more calendar 
workweeks in the current or preceding calendar year. Employers covered 
by FMLA also include any person acting, directly or indirectly, in the 
interest of a covered employer to any of the employees of the employer, 
any successor in interest of a covered employer, and any public agency. 
Public agencies are covered employers without regard to the number of 
employees employed. Public as well as private elementary and secondary 
schools are also covered employers without regard to the number of 
employees employed. (See Sec. 825.600.)
    (b) The terms ``commerce'' and ``industry affecting commerce'' are 
[[Page 2240]] defined in accordance with section 501(1) and (3) of the 
Labor Management Relations Act of 1947 (LMRA) (29 U.S.C. 142 (1) and 
(3)), as set forth in the definitions at section 825.800 of this part. 
For purposes of the FMLA, employers who meet the 50-employee coverage 
test are deemed to be engaged in commerce or in an industry or activity 
affecting commerce.
    (c) Normally the legal entity which employs the employee is the 
employer under FMLA. Applying this principle, a corporation is a single 
employer rather than its separate establishments or divisions.
    (1) Where one corporation has an ownership interest in another 
corporation, it is a separate employer unless it meets the ``joint 
employment'' test discussed in Sec. 825.106, or the ``integrated 
employer'' test contained in paragraph (c)(2) of this section.
    (2) Separate entities will be deemed to be parts of a single 
employer for purposes of FMLA if they meet the ``integrated employer'' 
test. Where this test is met, the employees of all entities making up 
the integrated employer will be counted in determining employer 
coverage and employee eligibility. A determination of whether or not 
separate entities are an integrated employer is not determined by the 
application of any single criterion, but rather the entire relationship 
is to be reviewed in its totality. Factors considered in determining 
whether two or more entities are an integrated employer include:
    (i) Common management;
    (ii) Interrelation between operations;
    (iii) Centralized control of labor relations; and
    (iv) Degree of common ownership/financial control.
    (d) An ``employer'' includes any person who acts directly or 
indirectly in the interest of an employer to any of the employer's 
employees. The definition of ``employer'' in section 3(d) of the Fair 
Labor Standards Act (FLSA), 29 U.S.C. 203(d), similarly includes any 
person acting directly or indirectly in the interest of an employer in 
relation to an employee. As under the FLSA, individuals such as 
corporate officers ``acting in the interest of an employer'' are 
individually liable for any violations of the requirements of FMLA.


Sec. 825.105  In determining whether an employer is covered by FMLA, 
what does it mean to employ 50 or more employees for each working day 
during each of 20 or more calendar workweeks in the current or 
preceding calendar year?

    (a) The definition of ``employ'' for purposes of FMLA is taken from 
the Fair Labor Standards Act, Sec. 3(g). The courts have made it clear 
that the employment relationship under the FLSA is broader than the 
traditional common law concept of master and servant. The difference 
between the employment relationship under the FLSA and that under the 
common law arises from the fact that the term ``employ'' as defined in 
the Act includes ``to suffer or permit to work''. The courts have 
indicated that, while ``to permit'' requires a more positive action 
than ``to suffer'', both terms imply much less positive action than 
required by the common law. Mere knowledge by an employer of work done 
for the employer by another is sufficient to create the employment 
relationship under the Act. The courts have said that there is no 
definition that solves all problems as to the limitations of the 
employer-employee relationship under the Act; and that determination of 
the relation cannot be based on ``isolated factors'' or upon a single 
characteristic or ``technical concepts'', but depends ``upon the 
circumstances of the whole activity'' including the underlying 
``economic reality.'' In general an employee, as distinguished from an 
independent contractor who is engaged in a business of his/her own, is 
one who ``follows the usual path of an employee'' and is dependent on 
the business which he/she serves.
    (b) Any employee whose name appears on the employer's payroll will 
be considered employed each working day of the calendar week, and must 
be counted whether or not any compensation is received for the week. 
However, the FMLA applies only to employees who are employed within any 
State of the United States, the District of Columbia or any Territory 
or possession of the United States. Employees who are employed outside 
these areas are not counted for purposes of determining employer 
coverage or employee eligibility.
    (c) Employees on paid or unpaid leave, including FMLA leave, leaves 
of absence, disciplinary suspension, etc., are counted as long as the 
employer has a reasonable expectation that the employee will later 
return to active employment. If there is no employer/employee 
relationship (as when an employee is laid off, whether temporarily or 
permanently) such individual is not counted. Part-time employees, like 
full-time employees, are considered to be employed each working day of 
the calendar week, as long as they are maintained on the payroll.
    (d) An employee who does not begin to work for an employer until 
after the first working day of a calendar week, or who terminates 
employment before the last working day of a calendar week, is not 
considered employed on each working day of that calendar week.
    (e) A private employer is covered if it maintained 50 or more 
employees on the payroll during 20 or more calendar workweeks (not 
necessarily consecutive workweeks) in either the current or the 
preceding calendar year.
    (f) Once a private employer meets the 50 employees/20 workweeks 
threshold, the employer remains covered until it reaches a future point 
where it no longer has employed 50 employees for 20 (nonconsecutive) 
workweeks in the current and preceding calendar year. For example, if 
an employer who met the 50 employees/20 workweeks test in the calendar 
year as of August 5, 1993, subsequently dropped below 50 employees 
before the end of 1993 and continued to employ fewer than 50 employees 
in all workweeks throughout calendar year 1994, the employer would 
continue to be covered throughout calendar year 1994 because it met the 
coverage criteria for 20 workweeks of the preceding (i.e., 1993) 
calendar year.


Sec. 825.106  How is ``joint employment'' treated under FMLA?

    (a) Where two or more businesses exercise some control over the 
work or working conditions of the employee, the businesses may be joint 
employers under FMLA. Joint employers may be separate and distinct 
entities with separate owners, managers and facilities. Where the 
employee performs work which simultaneously benefits two or more 
employers, or works for two or more employers at different times during 
the workweek, a joint employment relationship generally will be 
considered to exist in situations such as:
    (1) Where there is an arrangement between employers to share an 
employee's services or to interchange employees;
    (2) Where one employer acts directly or indirectly in the interest 
of the other employer in relation to the employee; or,
    (3) Where the employers are not completely disassociated with 
respect to the employee's employment and may be deemed to share control 
of the employee, directly or indirectly, because one employer controls, 
is controlled by, or is under common control with the other employer.
    (b) A determination of whether or not a joint employment 
relationship exists is not determined by the application of any single 
criterion, but rather the entire relationship is to be viewed in its 
totality. For example, joint employment [[Page 2241]] will ordinarily 
be found to exist when a temporary or leasing agency supplies employees 
to a second employer.
    (c) In joint employment relationships, only the primary employer is 
responsible for giving required notices to its employees, providing 
FMLA leave, and maintenance of health benefits. Factors considered in 
determining which is the ``primary'' employer include authority/
responsibility to hire and fire, assign/place the employee, make 
payroll, and provide employment benefits. For employees of temporary 
help or leasing agencies, for example, the placement agency most 
commonly would be the primary employer.
    (d) Employees jointly employed by two employers must be counted by 
both employers, whether or not maintained on one of the employer's 
payroll, in determining employer coverage and employee eligibility. For 
example, an employer who jointly employs 15 workers from a leasing or 
temporary help agency and 40 permanent workers is covered by FMLA. An 
employee on leave who is working for a secondary employer is considered 
employed by the secondary employer, and must be counted for coverage 
and eligibility purposes, as long as the employer has a reasonable 
expectation that that employee will return to employment with that 
employer.
    (e) Job restoration is the primary responsibility of the primary 
employer. The secondary employer is responsible for accepting the 
employee returning from FMLA leave in place of the replacement employee 
if the secondary employer continues to utilize an employee from the 
temporary or leasing agency, and the agency chooses to place the 
employee with the secondary employer. A secondary employer is also 
responsible for compliance with the prohibited acts provisions with 
respect to its temporary/leased employees, whether or not the secondary 
employer is covered by FMLA (see Sec. 825.220(a)). The prohibited acts 
include prohibitions against interfering with an employee's attempt to 
exercise rights under the Act, or discharging or discriminating against 
an employee for opposing a practice which is unlawful under FMLA. A 
covered secondary employer will be responsible for compliance with all 
the provisions of the FMLA with respect to its regular, permanent 
workforce.


Sec. 825.107  What is meant by ``successor in interest''?

    (a) For purposes of FMLA, in determining whether an employer is 
covered because it is a ``successor in interest'' to a covered 
employer, the factors used under Title VII of the Civil Rights Act and 
the Vietnam Era Veterans' Adjustment Act will be considered. However, 
unlike Title VII, whether the successor has notice of the employee's 
claim is not a consideration. Notice may be relevant, however, in 
determining successor liability for violations of the predecessor. The 
factors to be considered include:

    (1) Substantial continuity of the same business operations;
    (2) Use of the same plant;
    (3) Continuity of the work force;
    (4) Similarity of jobs and working conditions;
    (5) Similarity of supervisory personnel;
    (6) Similarity in machinery, equipment, and production methods;
    (7) Similarity of products or services; and
    (8) The ability of the predecessor to provide relief.
    (b) A determination of whether or not a ``successor in interest'' 
exists is not determined by the application of any single criterion, 
but rather the entire circumstances are to be viewed in their totality.
    (c) When an employer is a ``successor in interest,'' employees' 
entitlements are the same as if the employment by the predecessor and 
successor were continuous employment by a single employer. For example, 
the successor, whether or not it meets FMLA coverage criteria, must 
grant leave for eligible employees who had provided appropriate notice 
to the predecessor, or continue leave begun while employed by the 
predecessor, including maintenance of group health benefits during the 
leave and job restoration at the conclusion of the leave. A successor 
which meets FMLA's coverage criteria must count periods of employment 
and hours worked for the predecessor for purposes of determining 
employee eligibility for FMLA leave.


Sec. 825.108  What is a ``public agency''?

    (a) An ``employer'' under FMLA includes any ``public agency,'' as 
defined in section 3(x) of the Fair Labor Standards Act, 29 U.S.C. 
203(x). Section 3(x) of the FLSA defines ``public agency'' as the 
government of the United States; the government of a State or political 
subdivision of a State; or an agency of the United States, a State, or 
a political subdivision of a State, or any interstate governmental 
agency. ``State'' is further defined in Section 3(c) of the FLSA to 
include any State of the United States, the District of Columbia, or 
any Territory or possession of the United States.
    (b) The determination of whether an entity is a ``public'' agency, 
as distinguished from a private employer, is determined by whether the 
agency has taxing authority, or whether the chief administrative 
officer or board, etc., is elected by the voters-at-large or their 
appointment is subject to approval by an elected official.
    (c)(1) A State or a political subdivision of a State constitutes a 
single public agency and, therefore, a single employer for purposes of 
determining employee eligibility. For example, a State is a single 
employer; a county is a single employer; a city or town is a single 
employer. Where there is any question about whether a public entity is 
a public agency, as distinguished from a part of another public agency, 
the U.S. Bureau of the Census' ``Census of Governments'' will be 
determinative, except for new entities formed since the most recent 
publication of the ``Census.'' For new entities, the criteria used by 
the Bureau of Census will be used to determine whether an entity is a 
public agency or a part of another agency, including existence as an 
organized entity, governmental character, and substantial autonomy of 
the entity.
    (2) The Census Bureau takes a census of governments at 5-year 
intervals. Volume I, Government Organization, contains the official 
counts of the number of State and local governments. It includes 
tabulations of governments by State, type of government, size, and 
county location. Also produced is a universe list of governmental 
units, classified according to type of government. Copies of Volume I, 
Government Organization, and subsequent volumes are available from the 
Superintendent of Documents, U.S. Government Printing Office, 
Washington, D.C., 20402, U.S. Department of Commerce District Offices, 
or can be found in Regional and selective depository libraries. For a 
list of all depository libraries, write to the Government Printing 
Office, 710 N. Capitol St., NW, Washington, D.C. 20402.
    (d) All public agencies are covered by FMLA regardless of the 
number of employees; they are not subject to the coverage threshold of 
50 employees carried on the payroll each day for 20 or more weeks in a 
year. However, employees of public agencies must meet all of the 
requirements of eligibility, including the requirement that the 
employer (e.g., State) employ 50 employees at the worksite or within 75 
miles.


Sec. 825.109  Are Federal agencies covered by these regulations?

    (a) Most employees of the government of the United States, if they 
are covered by the FMLA, are covered under Title II of the FMLA 
(incorporated in Title V, [[Page 2242]] Chapter 63, Subchapter 5 of the 
United States Code) which is administered by the U.S. Office of 
Personnel Management (OPM). OPM has separate regulations at 5 CFR Part 
630, Subpart L. In addition, employees of the Senate and House of 
Representatives are covered by Title V of the FMLA.
    (b) The Federal Executive Branch employees within the jurisdiction 
of these regulations include:
    (1) Employees of the Postal Service;
    (2) Employees of the Postal Rate Commission;
    (3) A part-time employee who does not have an established regular 
tour of duty during the administrative workweek; and,
    (4) An employee serving under an intermittent appointment or 
temporary appointment with a time limitation of one year or less.
    (c) Employees of other Federal executive agencies are also covered 
by these regulations if they are not covered by Title II of FMLA.
    (d) Employees of the legislative or judicial branch of the United 
States are covered by these regulations only if they are employed in a 
unit which has employees in the competitive service. Examples include 
employees of the Government Printing Office and the U.S. Tax Court.
    (e) For employees covered by these regulations, the U.S. Government 
constitutes a single employer for purposes of determining employee 
eligibility. These employees must meet all of the requirements for 
eligibility, including the requirement that the Federal Government 
employ 50 employees at the worksite or within 75 miles.


Sec. 825.110  Which employees are ``eligible'' to take leave under 
FMLA?

    (a) An ``eligible employee'' is an employee of a covered employer 
who:
    (1) Has been employed by the employer for at least 12 months, and
    (2) Has been employed for at least 1,250 hours of service during 
the 12-month period immediately preceding the commencement of the 
leave, and
    (3) Is employed at a worksite where 50 or more employees are 
employed by the employer within 75 miles of that worksite. (See 
Sec. 825.105(a) regarding employees who work outside the U.S.)
    (b) The 12 months an employee must have been employed by the 
employer need not be consecutive months. If an employee is maintained 
on the payroll for any part of a week, including any periods of paid or 
unpaid leave (sick, vacation) during which other benefits or 
compensation are provided by the employer (e.g., workers' compensation, 
group health plan benefits, etc.), the week counts as a week of 
employment. For purposes of determining whether intermittent/
occasional/casual employment qualifies as ``at least 12 months,'' 52 
weeks is deemed to be equal to 12 months.
    (c) Whether an employee has worked the minimum 1,250 hours of 
service is determined according to the principles established under the 
Fair Labor Standards Act (FLSA) for determining compensable hours of 
work (see 29 CFR Part 785). The determining factor is the number of 
hours an employee has worked for the employer within the meaning of the 
FLSA. The determination is not limited by methods of recordkeeping, or 
by compensation agreements that do not accurately reflect all of the 
hours an employee has worked for or been in service to the employer. 
Any accurate accounting of actual hours worked under FLSA's principles 
may be used. In the event an employer does not maintain an accurate 
record of hours worked by an employee, including for employees who are 
exempt from FLSA's requirement that a record be kept of their hours 
worked (e.g., bona fide executive, administrative, and professional 
employees as defined in FLSA Regulations, 29 CFR Part 541), the 
employer has the burden of showing that the employee has not worked the 
requisite hours. In the event the employer is unable to meet this 
burden the employee is deemed to have met this test. See also 
Sec. 825.500(e). For this purpose, full-time teachers (see Sec. 825.800 
for definition) of an elementary or secondary school system, or 
institution of higher education, or other educational establishment or 
institution are deemed to meet the 1,250 hour test. An employer must be 
able to clearly demonstrate that such an employee did not work 1,250 
hours during the previous 12 months in order to claim that the employee 
is not ``eligible'' for FMLA leave.
    (d) The determinations of whether an employee has worked for the 
employer for at least 1,250 hours in the past 12 months and has been 
employed by the employer for a total of at least 12 months must be made 
as of the date leave commences. If an employee notifies the employer of 
need for FMLA leave before the employee meets these eligibility 
criteria, the employer must either confirm the employee's eligibility 
based upon a projection that the employee will be eligible on the date 
leave would commence or must advise the employee when the eligibility 
requirement is met. If the employer confirms eligibility at the time 
the notice for leave is received, the employer may not subsequently 
challenge the employee's eligibility. In the latter case, if the 
employer does not advise the employee whether the employee is eligible 
as soon as practicable (i.e., two business days absent extenuating 
circumstances) after the date employee eligibility is determined, the 
employee will have satisfied the notice requirements and the notice of 
leave is considered current and outstanding until the employer does 
advise. If the employer fails to advise the employee whether the 
employee is eligible prior to the date the requested leave is to 
commence, the employee will be deemed eligible. The employer may not, 
then, deny the leave. Where the employee does not give notice of the 
need for leave more than two business days prior to commencing leave, 
the employee will be deemed to be eligible if the employer fails to 
advise the employee that the employee is not eligible within two 
business days of receiving the employee's notice.
    (e) The period prior to the FMLA's effective date must be 
considered in determining employee's eligibility.
    (f) Whether 50 employees are employed within 75 miles to ascertain 
an employee's eligibility for FMLA benefits is determined when the 
employee gives notice of the need for leave. Whether the leave is to be 
taken at one time or on an intermittent or reduced leave schedule 
basis, once an employee is determined eligible in response to that 
notice of the need for leave, the employee's eligibility is not 
affected by any subsequent change in the number of employees employed 
at or within 75 miles of the employee's worksite, for that specific 
notice of the need for leave. Similarly, an employer may not terminate 
employee leave that has already started if the employee-count drops 
below 50. For example, if an employer employs 60 employees in August, 
but expects that the number of employees will drop to 40 in December, 
the employer must grant FMLA benefits to an otherwise eligible employee 
who gives notice of the need for leave in August for a period of leave 
to begin in December.


Sec. 825.111  In determining if an employee is ``eligible'' under FMLA, 
how is the determination made whether the employer employs 50 employees 
within 75 miles of the worksite where the employee needing leave is 
employed?

    (a) Generally, a worksite can refer to either a single location or 
a group of contiguous locations. Structures which form a campus or 
industrial park, or separate facilities in proximity with one another, 
may be considered a single site [[Page 2243]] of employment. On the 
other hand, there may be several single sites of employment within a 
single building, such as an office building, if separate employers 
conduct activities within the building. For example, an office building 
with 50 different businesses as tenants will contain 50 sites of 
employment. The offices of each employer will be considered separate 
sites of employment for purposes of FMLA. An employee's worksite under 
FMLA will ordinarily be the site the employee reports to or, if none, 
from which the employee's work is assigned.
    (1) Separate buildings or areas which are not directly connected or 
in immediate proximity are a single worksite if they are in reasonable 
geographic proximity, are used for the same purpose, and share the same 
staff and equipment. For example, if an employer manages a number of 
warehouses in a metropolitan area but regularly shifts or rotates the 
same employees from one building to another, the multiple warehouses 
would be a single worksite.
    (2) For employees with no fixed worksite, e.g., construction 
workers, transportation workers (e.g., truck drivers, seamen, pilots), 
salespersons, etc., the ``worksite'' is the site to which they are 
assigned as their home base, from which their work is assigned, or to 
which they report. For example, if a construction company headquartered 
in New Jersey opened a construction site in Ohio, and set up a mobile 
trailer on the construction site as the company's on-site office, the 
construction site in Ohio would be the worksite for any employees hired 
locally who report to the mobile trailer/company office daily for work 
assignments, etc. If that construction company also sent personnel such 
as job superintendents, foremen, engineers, an office manager, etc., 
from New Jersey to the job site in Ohio, those workers sent from New 
Jersey continue to have the headquarters in New Jersey as their 
``worksite.'' The workers who have New Jersey as their worksite would 
not be counted in determining eligibility of employees whose home base 
is the Ohio worksite, but would be counted in determining eligibility 
of employees whose home base is New Jersey. For transportation 
employees, their worksite is the terminal to which they are assigned, 
report for work, depart, and return after completion of a work 
assignment. For example, an airline pilot may work for an airline with 
headquarters in New York, but the pilot regularly reports for duty and 
originates or begins flights from the company's facilities located in 
an airport in Chicago and returns to Chicago at the completion of one 
or more flights to go off duty. The pilot's worksite is the facility in 
Chicago. An employee's personal residence is not a worksite in the case 
of employees such as salespersons who travel a sales territory and who 
generally leave to work and return from work to their personal 
residence, or employees who work at home, as under the new concept of 
flexiplace. Rather, their worksite is the office to which the report 
and from which assignments are made.
    (3) For purposes of determining that employee's eligibility, when 
an employee is jointly employed by two or more employers (see 
Sec. 825.106), the employee's worksite is the primary employer's office 
from which the employee is assigned or reports. The employee is also 
counted by the secondary employer to determine eligibility for the 
secondary employer's full-time or permanent employees.
    (b) The 75-mile distance is measured by surface miles, using 
surface transportation over public streets, roads, highways and 
waterways, by the shortest route from the facility where the eligible 
employee needing leave is employed. Absent available surface 
transportation between worksites, the distance is measured by using the 
most frequently utilized mode of transportation (e.g., airline miles).
    (c) The determination of how many employees are employed within 75 
miles of the worksite of an employee is based on the number of 
employees maintained on the payroll. Employees of educational 
institutions who are employed permanently or who are under contract are 
``maintained on the payroll'' during any portion of the year when 
school is not in session. See Sec. 825.105(b).


Sec. 825.112  Under what kinds of circumstances are employers required 
to grant family or medical leave?

    (a) Employers covered by FMLA are required to grant leave to 
eligible employees:
    (1) For birth of a son or daughter, and to care for the newborn 
child;
    (2) For placement with the employee of a son or daughter for 
adoption or foster care;
    (3) To care for the employee's spouse, son, daughter, or parent 
with a serious health condition; and
    (4) Because of a serious health condition that makes the employee 
unable to perform the functions of the employee's job.
    (b) The right to take leave under FMLA applies equally to male and 
female employees. A father, as well as a mother, can take family leave 
for the birth, placement for adoption or foster care of a child.
    (c) Circumstances may require that FMLA leave begin before the 
actual date of birth of a child. An expectant mother may take FMLA 
leave pursuant to paragraph (a)(4) of this section before the birth of 
the child for prenatal care or if her condition makes her unable to 
work.
    (d) Employers covered by FMLA are required to grant FMLA leave 
pursuant to paragraph (a)(2) of this section before the actual 
placement or adoption of a child if an absence from work is required 
for the placement for adoption or foster care to proceed. For example, 
the employee may be required to attend counselling sessions, appear in 
court, consult with his or her attorney or the doctor(s) representing 
the birth parent, or submit to a physical examination. The source of an 
adopted child (e.g., whether from a licensed placement agency or 
otherwise) is not a factor in determining eligibility for leave for 
this purpose.
    (e) Foster care is 24-hour care for children in substitution for, 
and away from, their parents or guardian. Such placement is made by or 
with the agreement of the State as a result of a voluntary agreement 
between the parent or guardian that the child be removed from the home, 
or pursuant to a judicial determination of the necessity for foster 
care, and involves agreement between the State and foster family that 
the foster family will take care of the child. Although foster care may 
be with relatives of the child, State action is involved in the removal 
of the child from parental custody.
    (f) In situations where the employer/employee relationship has been 
interrupted, such as an employee who has been on layoff, the employee 
must be recalled or otherwise be re-employed before being eligible for 
FMLA leave. Under such circumstances, an eligible employee is 
immediately entitled to further FMLA leave for a qualifying reason.
    (g) FMLA leave is available for treatment for substance abuse 
provided the conditions of Sec. 825.114 are met. However, treatment for 
substance abuse does not prevent an employer from taking employment 
action against an employee. The employer may not take action against 
the employee because the employee has exercised his or her right to 
take FMLA leave for treatment. However, if the employer has an 
established policy, applied in a non-discriminatory manner that has 
been communicated to all employees, that provides under certain 
circumstances an employee may be terminated for [[Page 2244]] substance 
abuse, pursuant to that policy the employee may be terminated whether 
or not the employee is presently taking FMLA leave. An employee may 
also take FMLA leave to care for an immediate family member who is 
receiving treatment for substance abuse. The employer may not take 
action against an employee who is providing care for an immediate 
family member receiving treatment for substance abuse.


Sec. 825.113  What do ``spouse,'' ``parent,'' and ``son or daughter'' 
mean for purposes of an employee qualifying to take FMLA leave?

    (a) Spouse means a husband or wife as defined or recognized under 
State law for purposes of marriage in the State where the employee 
resides, including common law marriage in States where it is 
recognized.
    (b) Parent means a biological parent or an individual who stands or 
stood in loco parentis to an employee when the employee was a son or 
daughter as defined in (c) below. This term does not include parents 
``in law''.
    (c) Son or daughter means a biological, adopted, or foster child, a 
stepchild, a legal ward, or a child of a person standing in loco 
parentis, who is either under age 18, or age 18 or older and 
``incapable of self-care because of a mental or physical disability.''
    (1) ``Incapable of self-care'' means that the individual requires 
active assistance or supervision to provide daily self-care in three or 
more of the ``activities of daily living'' (ADLs) or ``instrumental 
activities of daily living'' (IADLs). Activities of daily living 
include adaptive activities such as caring appropriately for one's 
grooming and hygiene, bathing, dressing and eating. Instrumental 
activities of daily living include cooking, cleaning, shopping, taking 
public transportation, paying bills, maintaining a residence, using 
telephones and directories, using a post office, etc.
    (2) ``Physical or mental disability'' means a physical or mental 
impairment that substantially limits one or more of the major life 
activities of an individual. Regulations at 29 CFR Sec. 1630.2(h), (i), 
and (j), issued by the Equal Employment Opportunity Commission under 
the Americans with Disabilities Act (ADA), 42 U.S.C. 12101 et seq., 
define these terms.
    (3) Persons who are ``in loco parentis'' include those with day-to-
day responsibilities to care for and financially support a child or, in 
the case of an employee, who had such responsibility for the employee 
when the employee was a child. A biological or legal relationship is 
not necessary.
    (d) For purposes of confirmation of family relationship, the 
employer may require the employee giving notice of the need for leave 
to provide reasonable documentation or statement of family 
relationship. This documentation may take the form of a simple 
statement from the employee, or a child's birth certificate, a court 
document, etc. The employer is entitled to examine documentation such 
as a birth certificate, etc., but the employee is entitled to the 
return of the official document submitted for this purpose.


Sec. 825.114  What is a ``serious health condition'' entitling an 
employee to FMLA leave?

    (a) For purposes of FMLA, ``serious health condition'' entitling an 
employee to FMLA leave means an illness, injury, impairment, or 
physical or mental condition that involves:
    (1) Inpatient care (i.e., an overnight stay) in a hospital, 
hospice, or residential medical care facility, including any period of 
incapacity (for purposes of this section, defined to mean inability to 
work, attend school or perform other regular daily activities due to 
the serious health condition, treatment therefor, or recovery 
therefrom), or any subsequent treatment in connection with such 
inpatient care; or
    (2) Continuing treatment by a health care provider. A serious 
health condition involving continuing treatment by a health care 
provider includes any one or more of the following:
    (i) A period of incapacity (i.e., inability to work, attend school 
or perform other regular daily activities due to the serious health 
condition, treatment therefor, or recovery therefrom) of more than 
three consecutive calendar days, and any subsequent treatment or period 
of incapacity relating to the same condition, that also involves:
    (A) Treatment two or more times by a health care provider, by a 
nurse or physician's assistant under direct supervision of a health 
care provider, or by a provider of health care services (e.g., physical 
therapist) under orders of, or on referral by, a health care provider; 
or
    (B) Treatment by a health care provider on at least one occasion 
which results in a regimen of continuing treatment under the 
supervision of the health care provider.
    (ii) Any period of incapacity due to pregnancy, or for prenatal 
care.
    (iii) Any period of incapacity or treatment for such incapacity due 
to a chronic serious health condition. A chronic serious health 
condition is one which:
    (A) Requires periodic visits for treatment by a health care 
provider, or by a nurse or physician's assistant under direct 
supervision of a health care provider;
    (B) Continues over an extended period of time (including recurring 
episodes of a single underlying condition); and
    (C) May cause episodic rather than a continuing period of 
incapacity (e.g., asthma, diabetes, epilepsy, etc.).
    (iv) A period of incapacity which is permanent or long-term due to 
a condition for which treatment may not be effective. The employee or 
family member must be under the continuing supervision of, but need not 
be receiving active treatment by, a health care provider. Examples 
include Alzheimer's, a severe stroke, or the terminal stages of a 
disease.
    (v) Any period of absence to receive multiple treatments (including 
any period of recovery therefrom) by a health care provider or by a 
provider of health care services under orders of, or on referral by, a 
health care provider, either for restorative surgery after an accident 
or other injury, or for a condition that would likely result in a 
period of incapacity of more than three consecutive calendar days in 
the absence of medical intervention or treatment, such as cancer 
(chemotherapy, radiation, etc.), severe arthritis (physical therapy), 
kidney disease (dialysis).
    (b) Treatment for purposes of paragraph (a) of this section 
includes (but is not limited to) examinations to determine if a serious 
health condition exists and evaluations of the condition. Treatment 
does not include routine physical examinations, eye examinations, or 
dental examinations. Under paragraph (a)(2)(i)(B), a regimen of 
continuing treatment includes, for example, a course of prescription 
medication (e.g., an antibiotic) or therapy requiring special equipment 
to resolve or alleviate the health condition (e.g., oxygen). A regimen 
of continuing treatment that includes the taking of over-the-counter 
medications such as aspirin, antihistamines, or salves; or bed-rest, 
drinking fluids, exercise, and other similar activities that can be 
initiated without a visit to a health care provider, is not, by itself, 
sufficient to constitute a regimen of continuing treatment for purposes 
of FMLA leave.
    (c) Conditions for which cosmetic treatments are administered (such 
as [[Page 2245]] most treatments for acne or plastic surgery) are not 
``serious health conditions'' unless inpatient hospital care is 
required or unless complications develop. Ordinarily, unless 
complications arise, the common cold, the flu, ear aches, upset 
stomach, minor ulcers, headaches other than migraine, routine dental or 
orthodontia problems, periodontal disease, etc., are examples of 
conditions that do not meet the definition of a serious health 
condition and do not qualify for FMLA leave. Restorative dental or 
plastic surgery after an injury or removal of cancerous growths are 
serious health conditions provided all the other conditions of this 
regulation are met. Mental illness resulting from stress or allergies 
may be serious health conditions, but only if all the conditions of 
this section are met.
    (d) Substance abuse may be a serious health condition if the 
conditions of this section are met. However, FMLA leave may only be 
taken for treatment for substance abuse by a health care provider or by 
a provider of health care services on referral by a health care 
provider. On the other hand, absence because of the employee's use of 
the substance, rather than for treatment, does not qualify for FMLA 
leave.
    (e) Absences attributable to incapacity under paragraphs (a)(2) 
(ii) or (iii) qualify for FMLA leave even though the employee or the 
immediate family member does not receive treatment from a health care 
provider during the absence, and even if the absence does not last more 
than three days. For example, an employee with asthma may be unable to 
report for work due to the onset of an asthma attack or because the 
employee's health care provider has advised the employee to stay home 
when the pollen count exceeds a certain level. An employee who is 
pregnant may be unable to report to work because of severe morning 
sickness.


Sec. 825.115  What does it mean that ``the employee is unable to 
perform the functions of the position of the employee''?

    An employee is ``unable to perform the functions of the position'' 
where the health care provider finds that the employee is unable to 
work at all or is unable to perform any one of the essential functions 
of the employee's position within the meaning of the Americans with 
Disabilities Act (ADA), 42 USC 12101 et seq., and the regulations at 29 
CFR Sec. 1630.2(n). An employee who must be absent from work to receive 
medical treatment for a serious health condition is considered to be 
unable to perform the essential functions of the position during the 
absence for treatment. An employer has the option, in requiring 
certification from a health care provider, to provide a statement of 
the essential functions of the employee's position for the health care 
provider to review. For purposes of FMLA, the essential functions of 
the employee's position are to be determined with reference to the 
position the employee held at the time notice is given or leave 
commenced, whichever is earlier.


Sec. 825.116  What does it mean that an employee is ``needed to care 
for'' a family member?

    (a) The medical certification provision that an employee is 
``needed to care for'' a family member encompasses both physical and 
psychological care. It includes situations where, for example, because 
of a serious health condition, the family member is unable to care for 
his or her own basic medical, hygienic, or nutritional needs or safety, 
or is unable to transport himself or herself to the doctor, etc. The 
term also includes providing psychological comfort and reassurance 
which would be beneficial to a child, spouse or parent with a serious 
health condition who is receiving inpatient or home care.
    (b) The term also includes situations where the employee may be 
needed to fill in for others who are caring for the family member, or 
to make arrangements for changes in care, such as transfer to a nursing 
home.
    (c) An employee's intermittent leave or a reduced leave schedule 
necessary to care for a family member includes not only a situation 
where the family member's condition itself is intermittent, but also 
where the employee is only needed intermittently--such as where other 
care is normally available, or care responsibilities are shared with 
another member of the family or a third party.


Sec. 825.117  For an employee seeking intermittent FMLA leave or leave 
on a reduced leave schedule, what is meant by ``the medical necessity 
for'' such leave?

    For intermittent leave or leave on a reduced leave schedule, there 
must be a medical need for leave (as distinguished from voluntary 
treatments and procedures) and it must be that such medical need can be 
best accommodated through an intermittent or reduced leave schedule. 
The treatment regimen and other information described in the 
certification of a serious health condition (see Sec. 825.306) meets 
the requirement for certification of the medical necessity of 
intermittent leave or leave on a reduced leave schedule. Employees 
needing intermittent FMLA leave or leave on a reduced leave schedule 
must attempt to schedule their leave so as not to disrupt the 
employer's operations. In addition, an employer may assign an employee 
to an alternative position with equivalent pay and benefits that better 
accommodates the employee's intermittent or reduced leave schedule.


Sec. 825.118  What is a ``health care provider''?

    (a) The Act defines ``health care provider'' as:
    (1) A doctor of medicine or osteopathy who is authorized to 
practice medicine or surgery (as appropriate) by the State in which the 
doctor practices; or
    (2) Any other person determined by the Secretary to be capable of 
providing health care services.
    (b) Others ``capable of providing health care services'' include 
only:
    (1) Podiatrists, dentists, clinical psychologists, optometrists, 
and chiropractors (limited to treatment consisting of manual 
manipulation of the spine to correct a subluxation as demonstrated by 
X-ray to exist) authorized to practice in the State and performing 
within the scope of their practice as defined under State law;
    (2) Nurse practitioners, nurse-midwives and clinical social workers 
who are authorized to practice under State law and who are performing 
within the scope of their practice as defined under State law;
    (3) Christian Science practitioners listed with the First Church of 
Christ, Scientist in Boston, Massachusetts. Where an employee or family 
member is receiving treatment from a Christian Science practitioner, an 
employee may not object to any requirement from an employer that the 
employee or family member submit to examination (though not treatment) 
to obtain a second or third certification from a health care provider 
other than a Christian Science practitioner except as otherwise 
provided under applicable State or local law or collective bargaining 
agreement.
    (4) Any health care provider from whom an employer or the 
employer's group health plan's benefits manager will accept 
certification of the existence of a serious health condition to 
substantiate a claim for benefits; and
    (5) A health care provider listed above who practices in a country 
other than the United States, who is authorized to practice in 
accordance with the law of that country, and who is performing within 
the scope of his or her practice as defined under such law.
    (c) The phrase ``authorized to practice in the State'' as used in 
this section means that the provider must be [[Page 2246]] authorized 
to diagnose and treat physical or mental health conditions without 
supervision by a doctor or other health care provider.

Subpart B--What Leave Is an Employee Entitled to Take Under the 
Family and Medical Leave Act?


Sec. 825.200  How much leave may an employee take?

    (a) An eligible employee's FMLA leave entitlement is limited to a 
total of 12 workweeks of leave during any 12-month period for any one, 
or more, of the following reasons:
    (1) The birth of the employee's son or daughter, and to care for 
the newborn child;
    (2) The placement with the employee of a son or daughter for 
adoption or foster care, and to care for the newly placed child;
    (3) To care for the employee's spouse, son, daughter, or parent 
with a serious health condition; and,
    (4) Because of a serious health condition that makes the employee 
unable to perform one or more of the essential functions of his or her 
job.
    (b) An employer is permitted to choose any one of the following 
methods for determining the ``12-month period'' in which the 12 weeks 
of leave entitlement occurs:
    (1) The calendar year;
    (2) Any fixed 12-month ``leave year,'' such as a fiscal year, a 
year required by State law, or a year starting on an employee's 
``anniversary'' date;
    (3) The 12-month period measured forward from the date any 
employee's first FMLA leave begins; or,
    (4) A ``rolling'' 12-month period measured backward from the date 
an employee uses any FMLA leave (except that such measure may not 
extend back before August 5, 1993).
    (c) Under methods in paragraphs (b)(1) and (b)(2) of this section 
an employee would be entitled to up to 12 weeks of FMLA leave at any 
time in the fixed 12-month period selected. An employee could, 
therefore, take 12 weeks of leave at the end of the year and 12 weeks 
at the beginning of the following year. Under the method in paragraph 
(b)(3) of this section, an employee would be entitled to 12 weeks of 
leave during the year beginning on the first date FMLA leave is taken; 
the next 12-month period would begin the first time FMLA leave is taken 
after completion of any previous 12-month period. Under the method in 
paragraph (b)(4) of this section, the ``rolling'' 12-month period, each 
time an employee takes FMLA leave the remaining leave entitlement would 
be any balance of the 12 weeks which has not been used during the 
immediately preceding 12 months. For example, if an employee has taken 
eight weeks of leave during the past 12 months, an additional four 
weeks of leave could be taken. If an employee used four weeks beginning 
February 1, 1994, four weeks beginning June 1, 1994, and four weeks 
beginning December 1, 1994, the employee would not be entitled to any 
additional leave until February 1, 1995. However, beginning on February 
1, 1995, the employee would be entitled to four weeks of leave, on June 
1 the employee would be entitled to an additional four weeks, etc.
    (d)(1) Employers will be allowed to choose any one of the 
alternatives in paragraph (b) of this section provided the alternative 
chosen is applied consistently and uniformly to all employees. An 
employer wishing to change to another alternative is required to give 
at least 60 days notice to all employees, and the transition must take 
place in such a way that the employees retain the full benefit of 12 
weeks of leave under whichever method affords the greatest benefit to 
the employee. Under no circumstances may a new method be implemented in 
order to avoid the Act's leave requirements.
    (2) An exception to this required uniformity would apply in the 
case of a multi-State employer who has eligible employees in a State 
which has a family and medical leave statute. The State may require a 
single method of determining the period during which use of the leave 
entitlement is measured. This method may conflict with the method 
chosen by the employer to determine ``any 12 months'' for purposes of 
the Federal statute. The employer may comply with the State provision 
for all employees employed within that State, and uniformly use another 
method provided by this regulation for all other employees.
    (e) If an employer fails to select one of the options in paragraph 
(b) of this section for measuring the 12-month period, the option that 
provides the most beneficial outcome for the employee will be used. The 
employer may subsequently select an option only by providing the 60-day 
notice to all employees of the option the employer intends to 
implement. During the running of the 60-day period any other employee 
who needs FMLA leave may use the option providing the most beneficial 
outcome to that employee. At the conclusion of the 60-day period the 
employer may implement the selected option.
    (f) For purposes of determining the amount of leave used by an 
employee, the fact that a holiday may occur within the week taken as 
FMLA leave has no effect; the week is counted as a week of FMLA leave. 
However, if for some reason the employer's business activity has 
temporarily ceased and employees generally are not expected to report 
for work for one or more weeks (e.g., a school closing two weeks for 
the Christmas/New Year holiday or the summer vacation or an employer 
closing the plant for retooling or repairs), the days the employer's 
activities have ceased do not count against the employee's FMLA leave 
entitlement. Methods for determining an employee's 12-week leave 
entitlement are also described in Sec. 825.205.


Sec. 825.201  If leave is taken for the birth of a child, or for 
placement of a child for adoption or foster care, when must the leave 
be concluded?

    An employee's entitlement to leave for a birth or placement for 
adoption or foster care expires at the end of the 12-month period 
beginning on the date of the birth or placement, unless state law 
allows, or the employer permits, leave to be taken for a longer period. 
Any such FMLA leave must be concluded within this one-year period. 
However, see Sec. 825.701 regarding non-FMLA leave which may be 
available under applicable State laws.


Sec. 825.202  How much leave may a husband and wife take if they are 
employed by the same employer?

    (a) A husband and wife who are eligible for FMLA leave and are 
employed by the same covered employer may be limited to a combined 
total of 12 weeks of leave during any 12-month period if the leave is 
taken:
    (1) for birth of the employee's son or daughter or to care for the 
child after birth;
    (2) for placement of a son or daughter with the employee for 
adoption or foster care, or to care for the child after placement; or
    (3) to care for the employee's parent with a serious health 
condition.
    (b) This limitation on the total weeks of leave applies to leave 
taken for the reasons specified in paragraph (a) of this section as 
long as a husband and wife are employed by the ``same employer.'' It 
would apply, for example, even though the spouses are employed at two 
different worksites of an employer located more than 75 miles from each 
other, or by two different operating divisions of the same company. On 
the other hand, if one spouse is ineligible for FMLA leave, the other 
spouse would be entitled to a full 12 weeks of FMLA leave. 
[[Page 2247]] 
    (c) Where the husband and wife both use a portion of the total 12-
week FMLA leave entitlement for one of the purposes in paragraph (a) of 
this section, the husband and wife would each be entitled to the 
difference between the amount he or she has taken individually and 12 
weeks for FMLA leave for a purpose other than those contained in 
paragraph (a) of this section. For example, if each spouse took 6 weeks 
of leave to care for a healthy, newborn child, each could use an 
additional 6 weeks due to his or her own serious health condition or to 
care for a child or parent with a serious health condition. Note, too, 
that many State pregnancy disability laws specify a period of 
disability either before or after the birth of a child; such periods 
would also be considered FMLA leave for a serious health condition of 
the mother, and would not be subject to the combined limit.


Sec. 825.203  Does FMLA leave have to be taken all at once, or can it 
be taken in parts?

    (a) FMLA leave may be taken ``intermittently or on a reduced leave 
schedule'' under certain circumstances. Intermittent leave is FMLA 
leave taken in separate blocks of time due to a single qualifying 
reason. A reduced leave schedule is a leave schedule that reduces an 
employee's usual number of working hours per workweek, or hours per 
workday. A reduced leave schedule is a change in the employee's 
schedule for a period of time, normally from full-time to part-time.
    (b) When leave is taken after the birth or placement of a child for 
adoption or foster care, an employee may take leave intermittently or 
on a reduced leave schedule only if the employer agrees. Such a 
schedule reduction might occur, for example, where an employee, with 
the employer's agreement, works part-time after the birth of a child, 
or takes leave in several segments. The employer's agreement is not 
required, however, for leave during which the mother has a serious 
health condition in connection with the birth of her child or if the 
newborn child has a serious health condition.
    (c) Leave may be taken intermittently or on a reduced leave 
schedule when medically necessary for planned and/or unanticipated 
medical treatment of a related serious health condition by or under the 
supervision of a health care provider, or for recovery from treatment 
or recovery from a serious health condition. It may also be taken to 
provide care or psychological comfort to an immediate family member 
with a serious health condition.
    (1) Intermittent leave may be taken for a serious health condition 
which requires treatment by a health care provider periodically, rather 
than for one continuous period of time, and may include leave of 
periods from an hour or more to several weeks. Examples of intermittent 
leave would include leave taken on an occasional basis for medical 
appointments, or leave taken several days at a time spread over a 
period of six months, such as for chemotherapy. A pregnant employee may 
take leave intermittently for prenatal examinations or for her own 
condition, such as for periods of severe morning sickness. An example 
of an employee taking leave on a reduced leave schedule is an employee 
who is recovering from a serious health condition and is not strong 
enough to work a full-time schedule.
    (2) Intermittent or reduced schedule leave may be taken for 
absences where the employee or family member is incapacitated or unable 
to perform the essential functions of the position because of a chronic 
serious health condition even if he or she does not receive treatment 
by a health care provider.
    (d) There is no limit on the size of an increment of leave when an 
employee takes intermittent leave or leave on a reduced leave schedule. 
However, an employer may limit leave increments to the shortest period 
of time that the employer's payroll system uses to account for absences 
or use of leave, provided it is one hour or less. For example, an 
employee might take two hours off for a medical appointment, or might 
work a reduced day of four hours over a period of several weeks while 
recuperating from an illness. An employee may not be required to take 
more FMLA leave than necessary to address the circumstance that 
precipitated the need for the leave, except as provided in 
Secs. 825.601 and 825.602.


Sec. 825.204  May an employer transfer an employee to an ``alternative 
position'' in order to accommodate intermittent leave or a reduced 
leave schedule?

    (a) If an employee needs intermittent leave or leave on a reduced 
leave schedule that is foreseeable based on planned medical treatment 
for the employee or a family member, including during a period of 
recovery from a serious health condition, or if the employer agrees to 
permit intermittent or reduced schedule leave for the birth of a child 
or for placement of a child for adoption or foster care, the employer 
may require the employee to transfer temporarily, during the period the 
intermittent or reduced leave schedule is required, to an available 
alternative position for which the employee is qualified and which 
better accommodates recurring periods of leave than does the employee's 
regular position. See Sec. 825.601 for special rules applicable to 
instructional employees of schools.
    (b) Transfer to an alternative position may require compliance with 
any applicable collective bargaining agreement, federal law (such as 
the Americans with Disabilities Act), and State law. Transfer to an 
alternative position may include altering an existing job to better 
accommodate the employee's need for intermittent or reduced leave.
    (c) The alternative position must have equivalent pay and benefits. 
An alternative position for these purposes does not have to have 
equivalent duties. The employer may increase the pay and benefits of an 
existing alternative position, so as to make them equivalent to the pay 
and benefits of the employee's regular job. The employer may also 
transfer the employee to a part-time job with the same hourly rate of 
pay and benefits, provided the employee is not required to take more 
leave than is medically necessary. For example, an employee desiring to 
take leave in increments of four hours per day could be transferred to 
a half-time job, or could remain in the employee's same job on a part-
time schedule, paying the same hourly rate as the employee's previous 
job and enjoying the same benefits. The employer may not eliminate 
benefits which otherwise would not be provided to part-time employees; 
however, an employer may proportionately reduce benefits such as 
vacation leave where an employer's normal practice is to base such 
benefits on the number of hours worked.
    (d) An employer may not transfer the employee to an alternative 
position in order to discourage the employee from taking leave or 
otherwise work a hardship on the employee. For example, a white collar 
employee may not be assigned to perform laborer's work; an employee 
working the day shift may not be reassigned to the graveyard shift; an 
employee working in the headquarters facility may not be reassigned to 
a branch a significant distance away from the employee's normal job 
location. Any such attempt on the part of the employer to make such a 
transfer will be held to be contrary to the prohibited acts of the 
FMLA.
    (e) When an employee who is taking leave intermittently or on a 
reduced leave schedule and has been transferred to an alternative 
position, no longer [[Page 2248]] needs to continue on leave and is 
able to return to full-time work, the employee must be placed in the 
same or equivalent job as the job he/she left when the leave commenced. 
An employee may not be required to take more leave than necessary to 
address the circumstance that precipitated the need for leave.


Sec. 825.205  How does one determine the amount of leave used where an 
employee takes leave intermittently or on a reduced leave schedule?

    (a) If an employee takes leave on an intermittent or reduced leave 
schedule, only the amount of leave actually taken may be counted toward 
the 12 weeks of leave to which an employee is entitled. For example, if 
an employee who normally works five days a week takes off one day, the 
employee would use 1/5 of a week of FMLA leave. Similarly, if a full-
time employee who normally works 8-hour days works 4-hour days under a 
reduced leave schedule, the employee would use 1/2 week of FMLA leave 
each week.
    (b) Where an employee normally works a part-time schedule or 
variable hours, the amount of leave to which an employee is entitled is 
determined on a pro rata or proportional basis by comparing the new 
schedule with the employee's normal schedule. For example, if an 
employee who normally works 30 hours per week works only 20 hours a 
week under a reduced leave schedule, the employee's ten hours of leave 
would constitute one-third of a week of FMLA leave for each week the 
employee works the reduced leave schedule.
    (c) If an employer has made a permanent or long-term change in the 
employee's schedule (for reasons other than FMLA, and prior to the 
notice of need for FMLA leave), the hours worked under the new schedule 
are to be used for making this calculation.
    (d) If an employee's schedule varies from week to week, a weekly 
average of the hours worked over the 12 weeks prior to the beginning of 
the leave period would be used for calculating the employee's normal 
workweek.


Sec. 825.206  May an employer deduct hourly amounts from an employee's 
salary, when providing unpaid leave under FMLA, without affecting the 
employee's qualification for exemption as an executive, administrative, 
or professional employee, or when utilizing the fluctuating workweek 
method for payment of overtime, under the Fair Labor Standards Act?

    (a) Leave taken under FMLA may be unpaid. If an employee is 
otherwise exempt from minimum wage and overtime requirements of the 
Fair Labor Standards Act (FLSA) as a salaried executive, 
administrative, or professional employee (under regulations issued by 
the Secretary), 29 CFR Part 541, providing unpaid FMLA-qualifying leave 
to such an employee will not cause the employee to lose the FLSA 
exemption. This means that under regulations currently in effect, where 
an employee meets the specified duties test, is paid on a salary basis, 
and is paid a salary of at least the amount specified in the 
regulations, the employer may make deductions from the employee's 
salary for any hours taken as intermittent or reduced FMLA leave within 
a workweek, without affecting the exempt status of the employee. The 
fact that an employer provides FMLA leave, whether paid or unpaid, and 
maintains records required by this part regarding FMLA leave, will not 
be relevant to the determination whether an employee is exempt within 
the meaning of 29 CFR Part 541.
    (b) For an employee paid in accordance with the fluctuating 
workweek method of payment for overtime (see 29 CFR 778.114), the 
employer, during the period in which intermittent or reduced schedule 
FMLA leave is scheduled to be taken, may compensate an employee on an 
hourly basis and pay only for the hours the employee works, including 
time and one-half the employee's regular rate for overtime hours. The 
change to payment on an hourly basis would include the entire period 
during which the employee is taking intermittent leave, including weeks 
in which no leave is taken. The hourly rate shall be determined by 
dividing the employee's weekly salary by the employee's normal or 
average schedule of hours worked during weeks in which FMLA leave is 
not being taken. If an employer chooses to follow this exception from 
the fluctuating workweek method of payment, the employer must do so 
uniformly, with respect to all employees paid on a fluctuating workweek 
basis for whom FMLA leave is taken on an intermittent or reduced leave 
schedule basis. If an employer does not elect to convert the employee's 
compensation to hourly pay, no deduction may be taken for FMLA leave 
absences. Once the need for intermittent or reduced scheduled leave is 
over, the employee may be restored to payment on a fluctuating work 
week basis.
    (c) This special exception to the ``salary basis'' requirements of 
the FLSA exemption or fluctuating workweek payment requirements applies 
only to employees of covered employers who are eligible for FMLA leave, 
and to leave which qualifies as (one of the four types of) FMLA leave. 
Hourly or other deductions which are not in accordance with 29 CFR Part 
541 or 29 CFR Sec. 778.114 may not be taken, for example, from the 
salary of an employee who works for an employer with fewer than 50 
employees, or where the employee has not worked long enough to be 
eligible for FMLA leave without potentially affecting the employee's 
eligibility for exemption. Nor may deductions which are not permitted 
by 29 CFR Part 541 or 29 CFR Sec. 778.114 be taken from such an 
employee's salary for any leave which does not qualify as FMLA leave, 
for example, deductions from an employee's pay for leave required under 
State law or under an employer's policy or practice for a reason which 
does not qualify as FMLA leave, e.g., leave to care for a grandparent 
or for a medical condition which does not qualify as a serious health 
condition; or for leave which is more generous than provided by FMLA, 
such as leave in excess of 12 weeks in a year. Employers may comply 
with State law or the employer's own policy/practice under these 
circumstances and maintain the employee's eligibility for exemption or 
for the fluctuating workweek method of pay by not taking hourly 
deductions from the employee's pay, in accordance with FLSA 
requirements, or may take such deductions, treating the employee as an 
``hourly'' employee and pay overtime premium pay for hours worked over 
40 in a workweek.


Sec. 825.207   Is FMLA leave paid or unpaid?

    (a) Generally, FMLA leave is unpaid. However, under the 
circumstances described in this section, FMLA permits an eligible 
employee to choose to substitute paid leave for FMLA leave. If an 
employee does not choose to substitute accrued paid leave, the employer 
may require the employee to substitute accrued paid leave for FMLA 
leave.
    (b) Where an employee has earned or accrued paid vacation, personal 
or family leave, that paid leave may be substituted for all or part of 
any (otherwise) unpaid FMLA leave relating to birth, placement of a 
child for adoption or foster care, or care for a spouse, child or 
parent who has a serious health condition. The term ``family leave'' as 
used in FMLA refers to paid leave provided by the employer covering the 
particular circumstances for which the employee seeks leave for either 
the birth of a child and to care for such child, placement of a child 
for adoption or foster care, or care for a spouse, child or parent with 
a serious health condition. For example, if the 
[[Page 2249]] employer's leave plan allows use of family leave to care 
for a child but not for a parent, the employer is not required to allow 
accrued family leave to be substituted for FMLA leave used to care for 
a parent.
    (c) Substitution of paid accrued vacation, personal, or medical/
sick leave may be made for any (otherwise) unpaid FMLA leave needed to 
care for a family member or the employee's own serious health 
condition. Substitution of paid sick/medical leave may be elected to 
the extent the circumstances meet the employer's usual requirements for 
the use of sick/medical leave. An employer is not required to allow 
substitution of paid sick or medical leave for unpaid FMLA leave ``in 
any situation'' where the employer's uniform policy would not normally 
allow such paid leave. An employee, therefore, has a right to 
substitute paid medical/sick leave to care for a seriously ill family 
member only if the employer's leave plan allows paid leave to be used 
for that purpose. Similarly, an employee does not have a right to 
substitute paid medical/sick leave for a serious health condition which 
is not covered by the employer's leave plan.
    (d)(1) Disability leave for the birth of a child would be 
considered FMLA leave for a serious health condition and counted in the 
12 weeks of leave permitted under FMLA. Because the leave pursuant to a 
temporary disability benefit plan is not unpaid, the provision for 
substitution of paid leave is inapplicable. However, the employer may 
designate the leave as FMLA leave and count the leave as running 
concurrently for purposes of both the benefit plan and the FMLA leave 
entitlement. If the requirements to qualify for payments pursuant to 
the employer's temporary disability plan are more stringent than those 
of FMLA, the employee must meet the more stringent requirements of the 
plan, or may choose not to meet the requirements of the plan and 
instead receive no payments from the plan and use unpaid FMLA leave or 
substitute available accrued paid leave.
    (2) The Act provides that a serious health condition may result 
from injury to the employee ``on or off'' the job. Either the employee 
or the employer may choose to have the employee's FMLA 12-week leave 
entitlement run concurrently with a workers' compensation absence when 
the injury is one that meets the criteria for a serious health 
condition. As the workers' compensation absence is not unpaid leave, 
the provision for substitution of the employee's accrued paid leave is 
not applicable. However, if the health care provider treating the 
employee for the workers' compensation injury certifies the employee is 
able to return to a ``light duty job'' but is unable to return to the 
same or equivalent job, the employee may decline the employer's offer 
of a ``light duty job''. As a result the employee may lose workers' 
compensation payments, but is entitled to remain on unpaid FMLA leave 
until the 12-week entitlement is exhausted. As of the date workers' 
compensation benefits cease, the substitution provision becomes 
applicable and either the employee may elect or the employer may 
require the use of accrued paid leave. See also Secs. 825.210(f), 
825.216(d), 825.220(d), 825.307(a)(1) and 825.702(d) (1) and (2) 
regarding the relationship between workers' compensation absences and 
FMLA leave.
    (e) Paid vacation or personal leave, including leave earned or 
accrued under plans allowing ``paid time off,'' may be substituted, at 
either the employee's or the employer's option, for any qualified FMLA 
leave. No limitations may be placed by the employer on substitution of 
paid vacation or personal leave for these purposes.
    (f) If neither the employee nor the employer elects to substitute 
paid leave for unpaid FMLA leave under the above conditions and 
circumstances, the employee will remain entitled to all the paid leave 
which is earned or accrued under the terms of the employer's plan.
    (g) If an employee uses paid leave under circumstances which do not 
qualify as FMLA leave, the leave will not count against the 12 weeks of 
FMLA leave to which the employee is entitled. For example, paid sick 
leave used for a medical condition which is not a serious health 
condition does not count against the 12 weeks of FMLA leave 
entitlement.
    (h) When an employee or employer elects to substitute paid leave 
(of any type) for unpaid FMLA leave under circumstances permitted by 
these regulations, and the employer's procedural requirements for 
taking that kind of leave are less stringent than the requirements of 
FMLA (e.g., notice or certification requirements), only the less 
stringent requirements may be imposed. An employee who complies with an 
employer's less stringent leave plan requirements in such cases may not 
have leave for an FMLA purpose delayed or denied on the grounds that 
the employee has not complied with stricter requirements of FMLA. 
However, where accrued paid vacation or personal leave is substituted 
for unpaid FMLA leave for a serious health condition, an employee may 
be required to comply with any less stringent medical certification 
requirements of the employer's sick leave program. See 
Secs. 825.302(g), 825.305(e) and 825.306(c).
    (i) Section 7(o) of the Fair Labor Standards Act (FLSA) permits 
public employers under prescribed circumstances to substitute 
compensatory time off accrued at one and one-half hours for each 
overtime hour worked in lieu of paying cash to an employee when the 
employee works overtime hours as prescribed by the Act. There are 
limits to the amounts of hours of compensatory time an employee may 
accumulate depending upon whether the employee works in fire protection 
or law enforcement (480 hours) or elsewhere for a public agency (240 
hours). Compensatory time off is not a form of accrued paid leave that 
an employer may require the employee to substitute for unpaid FMLA 
leave. The employee may request to use his/her balance of compensatory 
time for an FMLA reason. If the employer permits the accrual to be used 
in compliance with regulations, 29 CFR 553.25, the absence which is 
paid from the employee's accrued compensatory time ``account'' may not 
be counted against the employee's FMLA leave entitlement.


Sec. 825.208   Under what circumstances may an employer designate 
leave, paid or unpaid, as FMLA leave and, as a result, count it against 
the employee's total FMLA leave entitlement?

    (a) In all circumstances, it is the employer's responsibility to 
designate leave, paid or unpaid, as FMLA-qualifying, and to give notice 
of the designation to the employee as provided in this section. In the 
case of intermittent leave or leave on a reduced schedule, only one 
such notice is required unless the circumstances regarding the leave 
have changed. The employer's designation decision must be based only on 
information received from the employee or the employee's spokesperson 
(e.g., if the employee is incapacitated, the employee's spouse, adult 
child, parent, doctor, etc., may provide notice to the employer of the 
need to take FMLA leave). In any circumstance where the employer does 
not have sufficient information about the reason for an employee's use 
of paid leave, the employer should inquire further of the employee or 
the spokesperson to ascertain whether the paid leave is potentially 
FMLA-qualifying.
    (1) An employee giving notice of the need for unpaid FMLA leave 
must explain the reasons for the needed leave so as to allow the 
employer to determine that the leave qualifies under the Act. If 
[[Page 2250]] the employee fails to explain the reasons, leave may be 
denied. In many cases, in explaining the reasons for a request to use 
paid leave, especially when the need for the leave was unexpected or 
unforeseen, an employee will provide sufficient information for the 
employer to designate the paid leave as FMLA leave. An employee using 
accrued paid leave, especially vacation or personal leave, may in some 
cases not spontaneously explain the reasons or their plans for using 
their accrued leave.
    (2) As noted in Sec. 825.302(c), an employee giving notice of the 
need for unpaid FMLA leave does not need to expressly assert rights 
under the Act or even mention the FMLA to meet his or her obligation to 
provide notice, though the employee would need to state a qualifying 
reason for the needed leave. An employee requesting or notifying the 
employer of an intent to use accrued paid leave, even if for a purpose 
covered by FMLA, would not need to assert such right either. However, 
if an employee requesting to use paid leave for an FMLA-qualifying 
purpose does not explain the reason for the leave--consistent with the 
employer's established policy or practice--and the employer denies the 
employee's request, the employee will need to provide sufficient 
information to establish an FMLA-qualifying reason for the needed leave 
so that the employer is aware of the employee's entitlement (i.e., that 
the leave may not be denied) and, then, may designate that the paid 
leave be appropriately counted against (substituted for) the employee's 
12-week entitlement. Similarly, an employee using accrued paid vacation 
leave who seeks an extension of unpaid leave for an FMLA-qualifying 
purpose will need to state the reason. If this is due to an event which 
occurred during the period of paid leave, the employer may count the 
leave used after the FMLA-qualifying event against the employee's 12-
week entitlement.
    (b)(1) Once the employer has acquired knowledge that the leave is 
being taken for an FMLA required reason, the employer must promptly 
(within two business days absent extenuating circumstances) notify the 
employee that the paid leave is designated and will be counted as FMLA 
leave. If there is a dispute between an employer and an employee as to 
whether paid leave qualifies as FMLA leave, it should be resolved 
through discussions between the employee and the employer. Such 
discussions and the decision must be documented.
    (2) The employer's notice to the employee that the leave has been 
designated as FMLA leave may be orally or in writing. If the notice is 
oral, it shall be confirmed in writing, no later than the following 
payday (unless the payday is less than one week after the oral notice, 
in which case the notice must be no later than the subsequent payday). 
The written notice may be in any form, including a notation on the 
employee's pay stub.
    (c) If the employer requires paid leave to be substituted for 
unpaid leave, or that paid leave taken under an existing leave plan be 
counted as FMLA leave, this decision must be made by the employer 
within two business days of the time the employee gives notice of the 
need for leave, or, where the employer does not initially have 
sufficient information to make a determination, when the employer 
determines that the leave qualifies as FMLA leave if this happens 
later. The employer's designation must be made before the leave starts, 
unless the employer does not have sufficient information as to the 
employee's reason for taking the leave until after the leave commenced. 
If the employer has the requisite knowledge to make a determination 
that the paid leave is for an FMLA reason at the time the employee 
either gives notice of the need for leave or commences leave and fails 
to designate the leave as FMLA leave (and so notify the employee in 
accordance with paragraph (b)), the employer may not designate leave as 
FMLA leave retroactively, and may designate only prospectively as of 
the date of notification to the employee of the designation. In such 
circumstances, the employee is subject to the full protections of the 
Act, but none of the absence preceding the notice to the employee of 
the designation may be counted against the employee's 12-week FMLA 
leave entitlement.
    (d) If the employer learns that leave is for an FMLA purpose after 
leave has begun, such as when an employee gives notice of the need for 
an extension of the paid leave with unpaid FMLA leave, the entire or 
some portion of the paid leave period may be retroactively counted as 
FMLA leave, to the extent that the leave period qualified as FMLA 
leave. For example, an employee is granted two weeks paid vacation 
leave for a skiing trip. In mid-week of the second week, the employee 
contacts the employer for an extension of leave as unpaid leave and 
advises that at the beginning of the second week of paid vacation leave 
the employee suffered a severe accident requiring hospitalization. The 
employer may notify the employee that both the extension and the second 
week of paid vacation leave (from the date of the injury) is designated 
as FMLA leave. On the other hand, when the employee takes sick leave 
that turns into a serious health condition (e.g., bronchitis that turns 
into bronchial pneumonia) and the employee gives notice of the need for 
an extension of leave, the entire period of the serious health 
condition may be counted as FMLA leave.
    (e) Employers may not designate leave as FMLA leave after the 
employee has returned to work with two exceptions:
    (1) If the employee was absent for an FMLA reason and the employer 
did not learn the reason for the absence until the employee's return 
(e.g., where the employee was absent for only a brief period), the 
employer may, upon the employee's return to work, promptly (within two 
business days of the employee's return to work) designate the leave 
retroactively with appropriate notice to the employee. If leave is 
taken for an FMLA reason and has not been so designated by the 
employer, but the employee desires that the leave be counted as FMLA 
leave, the employee must notify the employer within two business days 
of returning to work that the leave was for an FMLA reason. In the 
absence of such timely notification by the employee, the employee may 
not subsequently assert FMLA protections for the absence.
    (2) If the employer knows the reason for the leave but has not been 
able to confirm that the leave qualifies under FMLA, or where the 
employer has requested medical certification which has not yet been 
received or the parties are in the process of obtaining a second or 
third medical opinion, the employer should make a preliminary 
designation, and so notify the employee, at the time leave begins, or 
as soon as the reason for the leave becomes known. Upon receipt of the 
requisite information from the employee or of the medical certification 
which confirms the leave is for an FMLA reason, the preliminary 
designation becomes final. If the medical certifications fail to 
confirm that the reason for the absence was an FMLA reason, the 
employer must withdraw the designation (with written notice to the 
employee).


Sec. 825.209  Is an employee entitled to benefits while using FMLA 
leave?

    (a) During any FMLA leave, an employer must maintain the employee's 
coverage under any group health plan (as defined in the Internal 
Revenue Code of 1986 at 26 U.S.C. 5000(b)(1)) on the same conditions as 
coverage would have been provided if the employee had been continuously 
employed during the entire leave period. All employers covered by FMLA, 
including public [[Page 2251]] agencies, are subject to the Act's 
requirements to maintain health coverage. The definition of ``group 
health plan'' is set forth in Sec. 825.800. For purposes of FMLA, the 
term ``group health plan'' shall not include an insurance program 
providing health coverage under which employees purchase individual 
policies from insurers provided that:
    (1) no contributions are made by the employer;
    (2) participation in the program is completely voluntary for 
employees;
    (3) the sole functions of the employer with respect to the program 
are, without endorsing the program, to permit the insurer to publicize 
the program to employees, to collect premiums through payroll 
deductions and to remit them to the insurer;
    (4) the employer receives no consideration in the form of cash or 
otherwise in connection with the program, other than reasonable 
compensation, excluding any profit, for administrative services 
actually rendered in connection with payroll deduction; and,
    (5) the premium charged with respect to such coverage does not 
increase in the event the employment relationship terminates.
    (b) The same group health plan benefits provided to an employee 
prior to taking FMLA leave must be maintained during the FMLA leave. 
For example, if family member coverage is provided to an employee, 
family member coverage must be maintained during the FMLA leave. 
Similarly, benefit coverage during FMLA leave for medical care, 
surgical care, hospital care, dental care, eye care, mental health 
counseling, substance abuse treatment, etc., must be maintained during 
leave if provided in an employer's group health plan, including a 
supplement to a group health plan, whether or not provided through a 
flexible spending account or other component of a cafeteria plan.
    (c) If an employer provides a new health plan or benefits or 
changes health benefits or plans while an employee is on FMLA leave, 
the employee is entitled to the new or changed plan/benefits to the 
same extent as if the employee were not on leave. For example, if an 
employer changes a group health plan so that dental care becomes 
covered under the plan, an employee on FMLA leave must be given the 
same opportunity as other employees to receive (or obtain) the dental 
care coverage. Any other plan changes (e.g., in coverage, premiums, 
deductibles, etc.) which apply to all employees of the workforce would 
also apply to an employee on FMLA leave.
    (d) Notice of any opportunity to change plans or benefits must also 
be given to an employee on FMLA leave. If the group health plan permits 
an employee to change from single to family coverage upon the birth of 
a child or otherwise add new family members, such a change in benefits 
must be made available while an employee is on FMLA leave. If the 
employee requests the changed coverage it must be provided by the 
employer.
    (e) An employee may choose not to retain group health plan coverage 
during FMLA leave. However, when an employee returns from leave, the 
employee is entitled to be reinstated on the same terms as prior to 
taking the leave, including family or dependent coverages, without any 
qualifying period, physical examination, exclusion of pre- existing 
conditions, etc. See Sec. 825.212(b).
    (f) Except as required by the Consolidated Omnibus Budget 
Reconciliation Act of 1986 (COBRA) and for ``key'' employees (as 
discussed below), an employer's obligation to maintain health benefits 
during leave (and to restore the employee to the same or equivalent 
employment) under FMLA ceases if and when the employment relationship 
would have terminated if the employee had not taken FMLA leave (e.g., 
if the employee's position is eliminated as part of a nondiscriminatory 
reduction in force and the employee would not have been transferred to 
another position); an employee informs the employer of his or her 
intent not to return from leave (including before starting the leave if 
the employer is so informed before the leave starts); or the employee 
fails to return from leave or continues on leave after exhausting his 
or her FMLA leave entitlement in the 12-month period.
    (g) If a ``key employee'' (see Sec. 825.218) does not return from 
leave when notified by the employer that substantial or grievous 
economic injury will result from his or her reinstatement, the 
employee's entitlement to group health plan benefits continues unless 
and until the employee advises the employer that the employee does not 
desire restoration to employment at the end of the leave period, or 
FMLA leave entitlement is exhausted, or reinstatement is actually 
denied.
    (h) An employee's entitlement to benefits other than group health 
benefits during a period of FMLA leave (e.g., holiday pay) is to be 
determined by the employer's established policy for providing such 
benefits when the employee is on other forms of leave (paid or unpaid, 
as appropriate).


Sec. 825.210  How may employees on FMLA leave pay their share of group 
health benefit premiums?

    (a) Group health plan benefits must be maintained on the same basis 
as coverage would have been provided if the employee had been 
continuously employed during the FMLA leave period. Therefore, any 
share of group health plan premiums which had been paid by the employee 
prior to FMLA leave must continue to be paid by the employee during the 
FMLA leave period. If premiums are raised or lowered, the employee 
would be required to pay the new premium rates. Maintenance of health 
insurance policies which are not a part of the employer's group health 
plan, as described in Sec. 825.209(a)(1), are the sole responsibility 
of the employee. The employee and the insurer should make necessary 
arrangements for payment of premiums during periods of unpaid FMLA 
leave.
    (b) If the FMLA leave is substituted paid leave, the employee's 
share of premiums must be paid by the method normally used during any 
paid leave, presumably as a payroll deduction.
    (c) If FMLA leave is unpaid, the employer has a number of options 
for obtaining payment from the employee. The employer may require that 
payment be made to the employer or to the insurance carrier, but no 
additional charge may be added to the employee's premium payment for 
administrative expenses. The employer may require employees to pay 
their share of premium payments in any of the following ways:
    (1) Payment would be due at the same time as it would be made if by 
payroll deduction;
    (2) Payment would be due on the same schedule as payments are made 
under COBRA;
    (3) Payment would be prepaid pursuant to a cafeteria plan at the 
employee's option;
    (4) The employer's existing rules for payment by employees on 
``leave without pay'' would be followed, provided that such rules do 
not require prepayment (i.e., prior to the commencement of the leave) 
of the premiums that will become due during a period of unpaid FMLA 
leave or payment of higher premiums than if the employee had continued 
to work instead of taking leave; or,
    (5) Another system voluntarily agreed to between the employer and 
the employee, which may include prepayment of premiums (e.g., through 
increased payroll deductions when the need for the FMLA leave is 
foreseeable). [[Page 2252]] 
    (d) The employer must provide the employee with advance written 
notice of the terms and conditions under which these payments must be 
made. (See Sec. 825.301.)
    (e) An employer may not require more of an employee using FMLA 
leave than the employer requires of other employees on ``leave without 
pay.''
    (f) An employee who is receiving payments as a result of a workers' 
compensation injury must make arrangements with the employer for 
payment of group health plan benefits when simultaneously taking unpaid 
FMLA leave. See paragraph (c) of this section and Sec. 825.207(d)(1).


Sec. 825.211  What special health benefits maintenance rules apply to 
multi-employer health plans?

    (a) A multi-employer health plan is a plan to which more than one 
employer is required to contribute, and which is maintained pursuant to 
one or more collective bargaining agreements between employee 
organization(s) and the employers.
    (b) An employer under a multi-employer plan must continue to make 
contributions on behalf of an employee using FMLA leave as though the 
employee had been continuously employed, unless the plan contains an 
explicit FMLA provision for maintaining coverage such as through pooled 
contributions by all employers party to the plan.
    (c) During the duration of an employee's FMLA leave, coverage by 
the group health plan, and benefits provided pursuant to the plan, must 
be maintained at the level of coverage and benefits which were 
applicable to the employee at the time FMLA leave commenced.
    (d) An employee using FMLA leave cannot be required to use 
``banked'' hours or pay a greater premium than the employee would have 
been required to pay if the employee had been continuously employed.
    (e) As provided in Sec. 825.209(f) of this part, group health plan 
coverage must be maintained for an employee on FMLA leave until:
    (1) the employee's FMLA leave entitlement is exhausted;
    (2) the employer can show that the employee would have been laid 
off and the employment relationship terminated; or,
    (3) the employee provides unequivocal notice of intent not to 
return to work.


Sec. 825.212  What are the consequences of an employee's failure to 
make timely health plan premium payments?

    (a)(1) In the absence of an established employer policy providing a 
longer grace period, an employer's obligations to maintain health 
insurance coverage cease under FMLA if an employee's premium payment is 
more than 30 days late. In order to drop the coverage for an employee 
whose premium payment is late, the employer must provide written notice 
to the employee that the payment has not been received. Such notice 
must be mailed to the employee at least 15 days before coverage is to 
cease, advising that coverage will be dropped on a specified date at 
least 15 days after the date of the letter unless the payment has been 
received by that date. If the employer has established policies 
regarding other forms of unpaid leave that provide for the employer to 
cease coverage retroactively to the date the unpaid premium payment was 
due, the employer may drop the employee from coverage retroactively in 
accordance with that policy, provided the 15-day notice was given. In 
the absence of such a policy, coverage for the employee may be 
terminated at the end of the 30-day grace period, where the required 
15-day notice has been provided.
    (2) An employer has no obligation regarding the maintenance of a 
health insurance policy which is not a ``group health plan.'' See 
Sec. 825.209(a).
    (3) All other obligations of an employer under FMLA would continue; 
for example, the employer continues to have an obligation to reinstate 
an employee upon return from leave.
    (b) The employer may recover the employee's share of any premium 
payments missed by the employee for any FMLA leave period during which 
the employer maintains health coverage by paying the employee's share 
after the premium payment is missed.
    (c) If coverage lapses because an employee has not made required 
premium payments, upon the employee's return from FMLA leave the 
employer must still restore the employee to coverage/benefits 
equivalent to those the employee would have had if leave had not been 
taken and the premium payment(s) had not been missed, including family 
or dependent coverage. See Sec. 825.215(d)(1)-(5). In such case, an 
employee may not be required to meet any qualification requirements 
imposed by the plan, including any new preexisting condition waiting 
period, to wait for an open season, or to pass a medical examination to 
obtain reinstatement of coverage.


Sec. 825.213  May an employer recover costs it incurred for maintaining 
``group health plan'' or other non-health benefits coverage during FMLA 
leave?

    (a) In addition to the circumstances discussed in Sec. 825.212(b), 
an employer may recover its share of health plan premiums during a 
period of unpaid FMLA leave from an employee if the employee fails to 
return to work after the employee's FMLA leave entitlement has been 
exhausted or expires, unless the reason the employee does not return is 
due to:
    (1) The continuation, recurrence, or onset of a serious health 
condition of the employee or the employee's family member which would 
otherwise entitle the employee to leave under FMLA; or
    (2) Other circumstances beyond the employee's control. Examples of 
``other circumstances beyond the employee's control'' are necessarily 
broad. They include such situations as where a parent chooses to stay 
home with a newborn child who has a serious health condition; an 
employee's spouse is unexpectedly transferred to a job location more 
than 75 miles from the employee's worksite; a relative or individual 
other than an immediate family member has a serious health condition 
and the employee is needed to provide care; the employee is laid off 
while on leave; or, the employee is a ``key employee'' who decides not 
to return to work upon being notified of the employer's intention to 
deny restoration because of substantial and grievous economic injury to 
the employer's operations and is not reinstated by the employer. Other 
circumstances beyond the employee's control would not include a 
situation where an employee desires to remain with a parent in a 
distant city even though the parent no longer requires the employee's 
care, or a parent chooses not to return to work to stay home with a 
well, newborn child.
    (3) When an employee fails to return to work because of the 
continuation, recurrence, or onset of a serious health condition, 
thereby precluding the employer from recovering its (share of) health 
benefit premium payments made on the employee's behalf during a period 
of unpaid FMLA leave, the employer may require medical certification of 
the employee's or the family member's serious health condition. Such 
certification is not required unless requested by the employer. The 
employee is required to provide medical certification in a timely 
manner which, for purposes of this section, is within 30 days from the 
date of the employer's request. For purposes of medical certification, 
the employee [[Page 2253]] may use the optional DOL form developed for 
this purpose (see Sec. 825.306(a) and Appendix B of this part). If the 
employer requests medical certification and the employee does not 
provide such certification in a timely manner (within 30 days), or the 
reason for not returning to work does not meet the test of other 
circumstances beyond the employee's control, the employer may recover 
100% of the health benefit premiums it paid during the period of unpaid 
FMLA leave.
    (b) Under some circumstances an employer may elect to maintain 
other benefits, e.g., life insurance, disability insurance, etc., by 
paying the employee's (share of) premiums during periods of unpaid FMLA 
leave. For example, to ensure the employer can meet its 
responsibilities to provide equivalent benefits to the employee upon 
return from unpaid FMLA leave, it may be necessary that premiums be 
paid continuously to avoid a lapse of coverage. If the employer elects 
to maintain such benefits during the leave, at the conclusion of leave, 
the employer is entitled to recover only the costs incurred for paying 
the employee's share of any premiums whether or not the employee 
returns to work.
    (c) An employee who returns to work for at least 30 calendar days 
is considered to have ``returned'' to work. An employee who transfers 
directly from taking FMLA leave to retirement, or who retires during 
the first 30 days after the employee returns to work, is deemed to have 
returned to work.
    (d) When an employee elects or an employer requires paid leave to 
be substituted for FMLA leave, the employer may not recover its (share 
of) health insurance or other non-health benefit premiums for any 
period of FMLA leave covered by paid leave. Because paid leave provided 
under a plan covering temporary disabilities (including workers' 
compensation) is not unpaid, recovery of health insurance premiums does 
not apply to such paid leave.
    (e) The amount that self-insured employers may recover is limited 
to only the employer's share of allowable ``premiums'' as would be 
calculated under COBRA, excluding the 2 percent fee for administrative 
costs.
    (f) When an employee fails to return to work, any health and non-
health benefit premiums which this section of the regulations permits 
an employer to recover are a debt owed by the non-returning employee to 
the employer. The existence of this debt caused by the employee's 
failure to return to work does not alter the employer's 
responsibilities for health benefit coverage and, under a self-
insurance plan, payment of claims incurred during the period of FMLA 
leave. To the extent recovery is allowed, the employer may recover the 
costs through deduction from any sums due to the employee (e.g., unpaid 
wages, vacation pay, profit sharing, etc.), provided such deductions do 
not otherwise violate applicable Federal or State wage payment or other 
laws. Alternatively, the employer may initiate legal action against the 
employee to recover such costs.


Sec. 825.214  What are an employee's rights on returning to work from 
FMLA leave?

    (a) On return from FMLA leave, an employee is entitled to be 
returned to the same position the employee held when leave commenced, 
or to an equivalent position with equivalent benefits, pay, and other 
terms and conditions of employment. An employee is entitled to such 
reinstatement even if the employee has been replaced or his or her 
position has been restructured to accommodate the employee's absence. 
See also Sec. 825.106(f) for the obligations of joint employers.
    (b) If the employee is unable to perform an essential function of 
the position because of a physical or mental condition, including the 
continuation of a serious health condition, the employee has no right 
to restoration to another position under the FMLA. However, the 
employer's obligations may be governed by the Americans with 
Disabilities Act (ADA). See Sec. 825.702.


Sec. 825.215  What is an equivalent position?

    (a) An equivalent position is one that is virtually identical to 
the employee's former position in terms of pay, benefits and working 
conditions, including privileges, perquisites and status. It must 
involve the same or substantially similar duties and responsibilities, 
which must entail substantially equivalent skill, effort, 
responsibility, and authority.
    (b) If an employee is no longer qualified for the position because 
of the employee's inability to attend a necessary course, renew a 
license, fly a minimum number of hours, etc., as a result of the leave, 
the employee shall be given a reasonable opportunity to fulfill those 
conditions upon return to work.
    (c) Equivalent Pay. (1) An employee is entitled to any 
unconditional pay increases which may have occurred during the FMLA 
leave period, such as cost of living increases. Pay increases 
conditioned upon seniority, length of service, or work performed would 
not have to be granted unless it is the employer's policy or practice 
to do so with respect to other employees on ``leave without pay.'' In 
such case, any pay increase would be granted based on the employee's 
seniority, length of service, work performed, etc., excluding the 
period of unpaid FMLA leave. An employee is entitled to be restored to 
a position with the same or equivalent pay premiums, such as a shift 
differential. If an employee departed from a position averaging ten 
hours of overtime (and corresponding overtime pay) each week, an 
employee is ordinarily entitled to such a position on return from FMLA 
leave.
    (2) Many employers pay bonuses in different forms to employees for 
job-related performance such as for perfect attendance, safety (absence 
of injuries or accidents on the job) and exceeding production goals. 
Bonuses for perfect attendance and safety do not require performance by 
the employee but rather contemplate the absence of occurrences. To the 
extent an employee who takes FMLA leave had met all the requirements 
for either or both of these bonuses before FMLA leave began, the 
employee is entitled to continue this entitlement upon return from FMLA 
leave, that is, the employee may not be disqualified for the bonus(es) 
for the taking of FMLA leave. See Sec. 825.220 (b) and (c). A monthly 
production bonus, on the other hand does require performance by the 
employee. If the employee is on FMLA leave during any part of the 
period for which the bonus is computed, the employee is entitled to the 
same consideration for the bonus as other employees on paid or unpaid 
leave (as appropriate). See paragraph (d)(2) of this section.
    (d) Equivalent Benefits. ``Benefits'' include all benefits provided 
or made available to employees by an employer, including group life 
insurance, health insurance, disability insurance, sick leave, annual 
leave, educational benefits, and pensions, regardless of whether such 
benefits are provided by a practice or written policy of an employer 
through an employee benefit plan as defined in Section 3(3) of the 
Employee Retirement Income Security Act of 1974, 29 U.S.C. 1002(3).
    (1) At the end of an employee's FMLA leave, benefits must be 
resumed in the same manner and at the same levels as provided when the 
leave began, and subject to any changes in benefit levels that may have 
taken place during the period of FMLA leave affecting the entire 
workforce, unless otherwise elected by the employee. Upon return from 
FMLA leave, an employee cannot be required to requalify for any 
benefits the employee enjoyed before FMLA [[Page 2254]] leave began 
(including family or dependent coverages). For example, if an employee 
was covered by a life insurance policy before taking leave but is not 
covered or coverage lapses during the period of unpaid FMLA leave, the 
employee cannot be required to meet any qualifications, such as taking 
a physical examination, in order to requalify for life insurance upon 
return from leave. Accordingly, some employers may find it necessary to 
modify life insurance and other benefits programs in order to restore 
employees to equivalent benefits upon return from FMLA leave, make 
arrangements for continued payment of costs to maintain such benefits 
during unpaid FMLA leave, or pay these costs subject to recovery from 
the employee on return from leave. See Sec. 825.213(b).
    (2) An employee may, but is not entitled to, accrue any additional 
benefits or seniority during unpaid FMLA leave. Benefits accrued at the 
time leave began, however, (e.g., paid vacation, sick or personal leave 
to the extent not substituted for FMLA leave) must be available to an 
employee upon return from leave.
    (3) If, while on unpaid FMLA leave, an employee desires to continue 
life insurance, disability insurance, or other types of benefits for 
which he or she typically pays, the employer is required to follow 
established policies or practices for continuing such benefits for 
other instances of leave without pay. If the employer has no 
established policy, the employee and the employer are encouraged to 
agree upon arrangements before FMLA leave begins.
    (4) With respect to pension and other retirement plans, any period 
of unpaid FMLA leave shall not be treated as or counted toward a break 
in service for purposes of vesting and eligibility to participate. 
Also, if the plan requires an employee to be employed on a specific 
date in order to be credited with a year of service for vesting, 
contributions or participation purposes, an employee on unpaid FMLA 
leave on that date shall be deemed to have been employed on that date. 
However, unpaid FMLA leave periods need not be treated as credited 
service for purposes of benefit accrual, vesting and eligibility to 
participate.
    (5) Employees on unpaid FMLA leave are to be treated as if they 
continued to work for purposes of changes to benefit plans. They are 
entitled to changes in benefits plans, except those which may be 
dependent upon seniority or accrual during the leave period, 
immediately upon return from leave or to the same extent they would 
have qualified if no leave had been taken. For example if the benefit 
plan is predicated on a pre-established number of hours worked each 
year and the employee does not have sufficient hours as a result of 
taking unpaid FMLA leave, the benefit is lost. (In this regard, 
Sec. 825.209 addresses health benefits.)
    (e) Equivalent Terms and Conditions of Employment. An equivalent 
position must have substantially similar duties, conditions, 
responsibilities, privileges and status as the employee's original 
position.
    (1) The employee must be reinstated to the same or a geographically 
proximate worksite (i.e., one that does not involve a significant 
increase in commuting time or distance) from where the employee had 
previously been employed. If the employee's original worksite has been 
closed, the employee is entitled to the same rights as if the employee 
had not been on leave when the worksite closed. For example, if an 
employer transfers all employees from a closed worksite to a new 
worksite in a different city, the employee on leave is also entitled to 
transfer under the same conditions as if he or she had continued to be 
employed.
    (2) The employee is ordinarily entitled to return to the same shift 
or the same or an equivalent work schedule.
    (3) The employee must have the same or an equivalent opportunity 
for bonuses, profit-sharing, and other similar discretionary and non-
discretionary payments.
    (4) FMLA does not prohibit an employer from accommodating an 
employee's request to be restored to a different shift, schedule, or 
position which better suits the employee's personal needs on return 
from leave, or to offer a promotion to a better position. However, an 
employee cannot be induced by the employer to accept a different 
position against the employee's wishes.
    (f) The requirement that an employee be restored to the same or 
equivalent job with the same or equivalent pay, benefits, and terms and 
conditions of employment does not extend to de minimis or intangible, 
unmeasurable aspects of the job. However, restoration to a job slated 
for lay-off when the employee's original position is not would not meet 
the requirements of an equivalent position.


Sec. 825.216  Are there any limitations on an employer's obligation to 
reinstate an employee?

    (a) An employee has no greater right to reinstatement or to other 
benefits and conditions of employment than if the employee had been 
continuously employed during the FMLA leave period. An employer must be 
able to show that an employee would not otherwise have been employed at 
the time reinstatement is requested in order to deny restoration to 
employment. For example:
    (1) If an employee is laid off during the course of taking FMLA 
leave and employment is terminated, the employer's responsibility to 
continue FMLA leave, maintain group health plan benefits and restore 
the employee cease at the time the employee is laid off, provided the 
employer has no continuing obligations under a collective bargaining 
agreement or otherwise. An employer would have the burden of proving 
that an employee would have been laid off during the FMLA leave period 
and, therefore, would not be entitled to restoration.
    (2) If a shift has been eliminated, or overtime has been decreased, 
an employee would not be entitled to return to work that shift or the 
original overtime hours upon restoration. However, if a position on, 
for example, a night shift has been filled by another employee, the 
employee is entitled to return to the same shift on which employed 
before taking FMLA leave.
    (b) If an employee was hired for a specific term or only to perform 
work on a discrete project, the employer has no obligation to restore 
the employee if the employment term or project is over and the employer 
would not otherwise have continued to employ the employee. On the other 
hand, if an employee was hired to perform work on a contract, and after 
that contract period the contract was awarded to another contractor, 
the successor contractor may be required to restore the employee if it 
is a successor employer. See Sec. 825.107.
    (c) In addition to the circumstances explained above, an employer 
may deny job restoration to salaried eligible employees (``key 
employees,'' as defined in paragraph (c) of Sec. 825.217) if such 
denial is necessary to prevent substantial and grievous economic injury 
to the operations of the employer; or may delay restoration to an 
employee who fails to provide a fitness for duty certificate to return 
to work under the conditions described in Sec. 825.310.
    (d) If the employee has been on a workers' compensation absence 
during which FMLA leave has been taken concurrently, and after 12 weeks 
of FMLA leave the employee is unable to return to work, the employee no 
longer has the protections of FMLA and must look to the workers' 
compensation statute or ADA for any relief or protections. 
[[Page 2255]] 


Sec. 825.217  What is a ``key employee''?

    (a) A ``key employee'' is a salaried FMLA-eligible employee who is 
among the highest paid 10 percent of all the employees employed by the 
employer within 75 miles of the employee's worksite.
    (b) The term ``salaried'' means ``paid on a salary basis,'' as 
defined in 29 CFR 541.118. This is the Department of Labor regulation 
defining employees who may qualify as exempt from the minimum wage and 
overtime requirements of the FLSA as executive, administrative, and 
professional employees.
    (c) A ``key employee'' must be ``among the highest paid 10 
percent'' of all the employees--both salaried and non-salaried, 
eligible and ineligible--who are employed by the employer within 75 
miles of the worksite.
    (1) In determining which employees are among the highest paid 10 
percent, year-to-date earnings are divided by weeks worked by the 
employee (including weeks in which paid leave was taken). Earnings 
include wages, premium pay, incentive pay, and non-discretionary and 
discretionary bonuses. Earnings do not include incentives whose value 
is determined at some future date, e.g., stock options, or benefits or 
perquisites.
    (2) The determination of whether a salaried employee is among the 
highest paid 10 percent shall be made at the time the employee gives 
notice of the need for leave. No more than 10 percent of the employer's 
employees within 75 miles of the worksite may be ``key employees.''


Sec. 825.218  What does ``substantial and grievous economic injury'' 
mean?

    (a) In order to deny restoration to a key employee, an employer 
must determine that the restoration of the employee to employment will 
cause ``substantial and grievous economic injury'' to the operations of 
the employer, not whether the absence of the employee will cause such 
substantial and grievous injury.
    (b) An employer may take into account its ability to replace on a 
temporary basis (or temporarily do without) the employee on FMLA leave. 
If permanent replacement is unavoidable, the cost of then reinstating 
the employee can be considered in evaluating whether substantial and 
grievous economic injury will occur from restoration; in other words, 
the effect on the operations of the company of reinstating the employee 
in an equivalent position.
    (c) A precise test cannot be set for the level of hardship or 
injury to the employer which must be sustained. If the reinstatement of 
a ``key employee'' threatens the economic viability of the firm, that 
would constitute ``substantial and grievous economic injury.'' A lesser 
injury which causes substantial, long-term economic injury would also 
be sufficient. Minor inconveniences and costs that the employer would 
experience in the normal course of doing business would certainly not 
constitute ``substantial and grievous economic injury.''
    (d) FMLA's ``substantial and grievous economic injury'' standard is 
different from and more stringent than the ``undue hardship'' test 
under the ADA (see, also Sec. 825.702).


Sec. 825.219  What are the rights of a key employee?

    (a) An employer who believes that reinstatement may be denied to a 
key employee, must give written notice to the employee at the time the 
employee gives notice of the need for FMLA leave (or when FMLA leave 
commences, if earlier) that he or she qualifies as a key employee. At 
the same time, the employer must also fully inform the employee of the 
potential consequences with respect to reinstatement and maintenance of 
health benefits if the employer should determine that substantial and 
grievous economic injury to the employer's operations will result if 
the employee is reinstated from FMLA leave. If such notice cannot be 
given immediately because of the need to determine whether the employee 
is a key employee, it shall be given as soon as practicable after being 
notified of a need for leave (or the commencement of leave, if 
earlier). It is expected that in most circumstances there will be no 
desire that an employee be denied restoration after FMLA leave and, 
therefore, there would be no need to provide such notice. However, an 
employer who fails to provide such timely notice will lose its right to 
deny restoration even if substantial and grievous economic injury will 
result from reinstatement.
    (b) As soon as an employer makes a good faith determination, based 
on the facts available, that substantial and grievous economic injury 
to its operations will result if a key employee who has given notice of 
the need for FMLA leave or is using FMLA leave is reinstated, the 
employer shall notify the employee in writing of its determination, 
that it cannot deny FMLA leave, and that it intends to deny restoration 
to employment on completion of the FMLA leave. It is anticipated that 
an employer will ordinarily be able to give such notice prior to the 
employee starting leave. The employer must serve this notice either in 
person or by certified mail. This notice must explain the basis for the 
employer's finding that substantial and grievous economic injury will 
result, and, if leave has commenced, must provide the employee a 
reasonable time in which to return to work, taking into account the 
circumstances, such as the length of the leave and the urgency of the 
need for the employee to return.
    (c) If an employee on leave does not return to work in response to 
the employer's notification of intent to deny restoration, the employee 
continues to be entitled to maintenance of health benefits and the 
employer may not recover its cost of health benefit premiums. A key 
employee's rights under FMLA continue unless and until the employee 
either gives notice that he or she no longer wishes to return to work, 
or the employer actually denies reinstatement at the conclusion of the 
leave period.
    (d) After notice to an employee has been given that substantial and 
grievous economic injury will result if the employee is reinstated to 
employment, an employee is still entitled to request reinstatement at 
the end of the leave period even if the employee did not return to work 
in response to the employer's notice. The employer must then again 
determine whether there will be substantial and grievous economic 
injury from reinstatement, based on the facts at that time. If it is 
determined that substantial and grievous economic injury will result, 
the employer shall notify the employee in writing (in person or by 
certified mail) of the denial of restoration.


Sec. 825.220  How are employees protected who request leave or 
otherwise assert FMLA rights?

    (a) The FMLA prohibits interference with an employee's rights under 
the law, and with legal proceedings or inquiries relating to an 
employee's rights. More specifically, the law contains the following 
employee protections:
    (1) An employer is prohibited from interfering with, restraining, 
or denying the exercise of (or attempts to exercise) any rights 
provided by the Act.
    (2) An employer is prohibited from discharging or in any other way 
discriminating against any person (whether or not an employee) for 
opposing or complaining about any unlawful practice under the Act.
    (3) All persons (whether or not employers) are prohibited from 
discharging or in any other way discriminating against any person 
[[Page 2256]] (whether or not an employee) because that person has--
    (i) Filed any charge, or has instituted (or caused to be 
instituted) any proceeding under or related to this Act;
    (ii) Given, or is about to give, any information in connection with 
an inquiry or proceeding relating to a right under this Act;
    (iii) Testified, or is about to testify, in any inquiry or 
proceeding relating to a right under this Act.
    (b) Any violations of the Act or of these regulations constitute 
interfering with, restraining, or denying the exercise of rights 
provided by the Act. ``Interfering with'' the exercise of an employee's 
rights would include, for example, not only refusing to authorize FMLA 
leave, but discouraging an employee from using such leave. It would 
also include manipulation by a covered employer to avoid 
responsibilities under FMLA, for example:
    (1) transferring employees from one worksite to another for the 
purpose of reducing worksites, or to keep worksites, below the 50-
employee threshold for employee eligibility under the Act;
    (2) changing the essential functions of the job in order to 
preclude the taking of leave;
    (3) reducing hours available to work in order to avoid employee 
eligibility.
    (c) An employer is prohibited from discriminating against employees 
or prospective employees who have used FMLA leave. For example, if an 
employee on leave without pay would otherwise be entitled to full 
benefits (other than health benefits), the same benefits would be 
required to be provided to an employee on unpaid FMLA leave. By the 
same token, employers cannot use the taking of FMLA leave as a negative 
factor in employment actions, such as hiring, promotions or 
disciplinary actions; nor can FMLA leave be counted under ``no fault'' 
attendance policies.
    (d) Employees cannot waive, nor may employers induce employees to 
waive, their rights under FMLA. For example, employees (or their 
collective bargaining representatives) cannot ``trade off'' the right 
to take FMLA leave against some other benefit offered by the employer. 
This does not prevent an employee's voluntary and uncoerced acceptance 
(not as a condition of employment) of a ``light duty'' assignment while 
recovering from a serious health condition (see Sec. 825.702(d)). In 
such a circumstance the employee's right to restoration to the same or 
an equivalent position is available until 12 weeks have passed within 
the 12-month period, including all FMLA leave taken and the period of 
``light duty.''
    (e) Individuals, and not merely employees, are protected from 
retaliation for opposing (e.g., file a complaint about) any practice 
which is unlawful under the Act. They are similarly protected if they 
oppose any practice which they reasonably believe to be a violation of 
the Act or regulations.

Subpart C--How do Employees Learn of Their FMLA Rights and 
Obligations, and What Can an Employer Require of an Employee?


Sec. 825.300  What posting requirements does the Act place on 
employers?

    (a) Every employer covered by the FMLA is required to post and keep 
posted on its premises, in conspicuous places where employees are 
employed, whether or not it has any ``eligible'' employees, a notice 
explaining the Act's provisions and providing information concerning 
the procedures for filing complaints of violations of the Act with the 
Wage and Hour Division. The notice must be posted prominently where it 
can be readily seen by employees and applicants for employment. 
Employers may duplicate the text of the notice contained in Appendix C 
of this part, or copies of the required notice may be obtained from 
local offices of the Wage and Hour Division. The poster and the text 
must be large enough to be easily read and contain fully legible text.
    (b) An employer that willfully violates the posting requirement may 
be assessed a civil money penalty by the Wage and Hour Division not to 
exceed $100 for each separate offense. Furthermore, an employer that 
fails to post the required notice cannot take any adverse action 
against an employee, including denying FMLA leave, for failing to 
furnish the employer with advance notice of a need to take FMLA leave.
    (c) Where an employer's workforce is comprised of a significant 
portion of workers who are not literate in English, the employer shall 
be responsible for providing the notice in a language in which the 
employees are literate.


Sec. 825.301  What other notices to employees are required of employers 
under the FMLA?

    (a)(1) If an FMLA-covered employer has any eligible employees and 
has any written guidance to employees concerning employee benefits or 
leave rights, such as in an employee handbook, information concerning 
FMLA entitlements and employee obligations under the FMLA must be 
included in the handbook or other document. For example, if an employer 
provides an employee handbook to all employees that describes the 
employer's policies regarding leave, wages, attendance, and similar 
matters, the handbook must incorporate information on FMLA rights and 
responsibilities and the employer's policies regarding the FMLA. 
Informational publications describing the Act's provisions are 
available from local offices of the Wage and Hour Division and may be 
incorporated in such employer handbooks or written policies.
    (2) If such an employer does not have written policies, manuals, or 
handbooks describing employee benefits and leave provisions, the 
employer shall provide written guidance to an employee concerning all 
the employee's rights and obligations under the FMLA. This notice shall 
be provided to employees each time notice is given pursuant to 
paragraph (b), and in accordance with the provisions of that paragraph. 
Employers may duplicate and provide the employee a copy of the FMLA 
Fact Sheet available from the nearest office of the Wage and Hour 
Division to provide such guidance.
    (b)(1) The employer shall also provide the employee with written 
notice detailing the specific expectations and obligations of the 
employee and explaining any consequences of a failure to meet these 
obligations. The written notice must be provided to the employee in a 
language in which the employee is literate (see Sec. 825.300(c)). Such 
specific notice must include, as appropriate:
    (i) that the leave will be counted against the employee's annual 
FMLA leave entitlement (see Sec. 825.208);
    (ii) any requirements for the employee to furnish medical 
certification of a serious health condition and the consequences of 
failing to do so (see Sec. 825.305);
    (iii) the employee's right to substitute paid leave and whether the 
employer will require the substitution of paid leave, and the 
conditions related to any substitution;
    (iv) any requirement for the employee to make any premium payments 
to maintain health benefits and the arrangements for making such 
payments (see Sec. 825.210), and the possible consequences of failure 
to make such payments on a timely basis (i.e., the circumstances under 
which coverage may lapse);
    (v) any requirement for the employee to present a fitness-for-duty 
certificate to be restored to employment (see Sec. 825.309); 
[[Page 2257]] 
    (vi) the employee's status as a ``key employee'' and the potential 
consequence that restoration may be denied following FMLA leave, 
explaining the conditions required for such denial (see Sec. 825.218);
    (vii) the employee's right to restoration to the same or an 
equivalent job upon return from leave (see Secs. 825.214 and 825.604); 
and,
    (viii) the employee's potential liability for payment of health 
insurance premiums paid by the employer during the employee's unpaid 
FMLA leave if the employee fails to return to work after taking FMLA 
leave (see Sec. 825.213).
    (2) The specific notice may include other information--e.g., 
whether the employer will require periodic reports of the employee's 
status and intent to return to work, but is not required to do so. A 
prototype notice is contained in Appendix D of this part, or may be 
obtained from local offices of the Department of Labor's Wage and Hour 
Division, which employers may adapt for their use to meet these 
specific notice requirements.
    (c) Except as provided in this subparagraph, the written notice 
required by paragraph (b) (and by subparagraph (a)(2) where applicable) 
must be provided to the employee no less often than the first time in 
each six-month period that an employee gives notice of the need for 
FMLA leave (if FMLA leave is taken during the six-month period). The 
notice shall be given within a reasonable time after notice of the need 
for leave is given by the employee--within one or two business days if 
feasible. If leave has already begun, the notice should be mailed to 
the employee's address of record.
    (1) If the specific information provided by the notice changes with 
respect to a subsequent period of FMLA leave during the six-month 
period, the employer shall, within one or two business days of receipt 
of the employee's notice of need for leave, provide written notice 
referencing the prior notice and setting forth any of the information 
in subparagraph (b) which has changed. For example, if the initial 
leave period were paid leave and the subsequent leave period would be 
unpaid leave, the employer may need to give notice of the arrangements 
for making premium payments.
    (2)(i) Except as provided in subparagraph (ii), if the employer is 
requiring medical certification or a ``fitness-for-duty'' report, 
written notice of the requirement shall be given with respect to each 
employee notice of a need for leave.
    (ii) Subsequent written notification shall not be required if the 
initial notice in the six-months period and the employer handbook or 
other written documents (if any) describing the employer's leave 
policies, clearly provided that certification or a ``fitness-for-duty'' 
report would be required (e.g., by stating that certification would be 
required in all cases, by stating that certification would be required 
in all cases in which leave of more than a specified number of days is 
taken, or by stating that a ``fitness-for-duty'' report would be 
required in all cases for back injuries for employees in a certain 
occupation). Where subsequent written notice is not required, at least 
oral notice shall be provided. (See Sec. 825.305(a).)
    (d) Employers are also expected to responsively answer questions 
from employees concerning their rights and responsibilities under the 
FMLA.
    (e) Employers furnishing FMLA-required notices to sensory impaired 
individuals must also comply with all applicable requirements under 
Federal or State law.
    (f) If an employer fails to provide notice in accordance with the 
provisions of this section, the employer may not take action against an 
employee for failure to comply with any provision required to be set 
forth in the notice.


Sec. 825.302  What notice does an employee have to give an employer 
when the need for FMLA leave is foreseeable?

    (a) An employee must provide the employer at least 30 days advance 
notice before FMLA leave is to begin if the need for the leave is 
foreseeable based on an expected birth, placement for adoption or 
foster care, or planned medical treatment for a serious health 
condition of the employee or of a family member. If 30 days notice is 
not practicable, such as because of a lack of knowledge of 
approximately when leave will be required to begin, a change in 
circumstances, or a medical emergency, notice must be given as soon as 
practicable. For example, an employee's health condition may require 
leave to commence earlier than anticipated before the birth of a child. 
Similarly, little opportunity for notice may be given before placement 
for adoption. Whether the leave is to be continuous or is to be taken 
intermittently or on a reduced schedule basis, notice need only be 
given one time, but the employee shall advise the employer as soon as 
practicable if dates of scheduled leave change or are extended, or were 
initially unknown.
    (b) ``As soon as practicable'' means as soon as both possible and 
practical, taking into account all of the facts and circumstances in 
the individual case. For foreseeable leave where it is not possible to 
give as much as 30 days notice, ``as soon as practicable'' ordinarily 
would mean at least verbal notification to the employer within one or 
two business days of when the need for leave becomes known to the 
employee.
    (c) An employee shall provide at least verbal notice sufficient to 
make the employer aware that the employee needs FMLA-qualifying leave, 
and the anticipated timing and duration of the leave. The employee need 
not expressly assert rights under the FMLA or even mention the FMLA, 
but may only state that leave is needed for an expected birth or 
adoption, for example. The employer should inquire further of the 
employee if it is necessary to have more information about whether FMLA 
leave is being sought by the employee, and obtain the necessary details 
of the leave to be taken. In the case of medical conditions, the 
employer may find it necessary to inquire further to determine if the 
leave is because of a serious health condition and may request medical 
certification to support the need for such leave (see Sec. 825.305).
    (d) An employer may also require an employee to comply with the 
employer's usual and customary notice and procedural requirements for 
requesting leave. For example, an employer may require that written 
notice set forth the reasons for the requested leave, the anticipated 
duration of the leave, and the anticipated start of the leave. However, 
failure to follow such internal employer procedures will not permit an 
employer to disallow or delay an employee's taking FMLA leave if the 
employee gives timely verbal or other notice.
    (e) When planning medical treatment, the employee must consult with 
the employer and make a reasonable effort to schedule the leave so as 
not to disrupt unduly the employer's operations, subject to the 
approval of the health care provider. Employees are ordinarily expected 
to consult with their employers prior to the scheduling of treatment in 
order to work out a treatment schedule which best suits the needs of 
both the employer and the employee. If an employee who provides notice 
of the need to take FMLA leave on an intermittent basis for planned 
medical treatment neglects to consult with the employer to make a 
reasonable attempt to arrange the schedule of treatments so as not to 
unduly disrupt the employer's operations, the employer may initiate 
discussions with the employee and require the employee to attempt to 
make such arrangements, [[Page 2258]] subject to the approval of the 
health care provider.
    (f) In the case of intermittent leave or leave on a reduced leave 
schedule which is medically necessary, an employee shall advise the 
employer, upon request, of the reasons why the intermittent/reduced 
leave schedule is necessary and of the schedule for treatment, if 
applicable. The employee and employer shall attempt to work out a 
schedule which meets the employee's needs without unduly disrupting the 
employer's operations, subject to the approval of the health care 
provider.
    (g) An employer may waive employees' FMLA notice requirements. In 
addition, an employer may not require compliance with stricter FMLA 
notice requirements where the provisions of a collective bargaining 
agreement, State law, or applicable leave plan allow less advance 
notice to the employer. For example, if an employee (or employer) 
elects to substitute paid vacation leave for unpaid FMLA leave (see 
Sec. 825.207), and the employer's paid vacation leave plan imposes no 
prior notification requirements for taking such vacation leave, no 
advance notice may be required for the FMLA leave taken in these 
circumstances. On the other hand, FMLA notice requirements would apply 
to a period of unpaid FMLA leave, unless the employer imposes lesser 
notice requirements on employees taking leave without pay.


Sec. 825.303  What are the requirements for an employee to furnish 
notice to an employer where the need for FMLA leave is not foreseeable?

    (a) When the approximate timing of the need for leave is not 
foreseeable, an employee should give notice to the employer of the need 
for FMLA leave as soon as practicable under the facts and circumstances 
of the particular case. It is expected that an employee will give 
notice to the employer within no more than one or two working days of 
learning of the need for leave, except in extraordinary circumstances 
where such notice is not feasible. In the case of a medical emergency 
requiring leave because of an employee's own serious health condition 
or to care for a family member with a serious health condition, written 
advance notice pursuant to an employer's internal rules and procedures 
may not be required when FMLA leave is involved.
    (b) The employee should provide notice to the employer either in 
person or by telephone, telegraph, facsimile (``fax'') machine or other 
electronic means. Notice may be given by the employee's spokesperson 
(e.g., spouse, adult family member or other responsible party) if the 
employee is unable to do so personally. The employee need not expressly 
assert rights under the FMLA or even mention the FMLA, but may only 
state that leave is needed. The employer will be expected to obtain any 
additional required information through informal means. The employee or 
spokesperson will be expected to provide more information when it can 
readily be accomplished as a practical matter, taking into 
consideration the exigencies of the situation.


Sec. 825.304  What recourse do employers have if employees fail to 
provide the required notice?

    (a) An employer may waive employees' FMLA notice obligations or the 
employer's own internal rules on leave notice requirements.
    (b) If an employee fails to give 30 days notice for foreseeable 
leave with no reasonable excuse for the delay, the employer may delay 
the taking of FMLA leave until at least 30 days after the date the 
employee provides notice to the employer of the need for FMLA leave.
    (c) In all cases, in order for the onset of an employee's FMLA 
leave to be delayed due to lack of required notice, it must be clear 
that the employee had actual notice of the FMLA notice requirements. 
This condition would be satisfied by the employer's proper posting of 
the required notice at the worksite where the employee is employed. 
Furthermore, the need for leave and the approximate date leave would be 
taken must have been clearly foreseeable to the employee 30 days in 
advance of the leave. For example, knowledge that an employee would 
receive a telephone call about the availability of a child for adoption 
at some unknown point in the future would not be sufficient.


Sec. 825.305  When must an employee provide medical certification to 
support FMLA leave?

    (a) An employer may require that an employee's leave to care for 
the employee's seriously-ill spouse, son, daughter, or parent, or due 
to the employee's own serious health condition that makes the employee 
unable to perform one or more of the essential functions of the 
employee's position, be supported by a certification issued by the 
health care provider of the employee or the employee's ill family 
member. An employer must give notice of a requirement for medical 
certification each time a certification is required; such notice must 
be written notice whenever required by Sec. 825.301. An employer's oral 
request to an employee to furnish any subsequent medical certification 
is sufficient.
    (b) When the leave is foreseeable and at least 30 days notice has 
been provided, the employee should provide the medical certification 
before the leave begins. When this is not possible, the employee must 
provide the requested certification to the employer within the time 
frame requested by the employer (which must allow at least 15 calendar 
days after the employer's request), unless it is not practicable under 
the particular circumstances to do so despite the employee's diligent, 
good faith efforts.
    (c) In most cases, the employer should request that an employee 
furnish certification from a health care provider at the time the 
employee gives notice of the need for leave or within two business days 
thereafter, or, in the case of unforeseen leave, within two business 
days after the leave commences. The employer may request certification 
at some later date if the employer later has reason to question the 
appropriateness of the leave or its duration.
    (d) At the time the employer requests certification, the employer 
must also advise an employee of the anticipated consequences of an 
employee's failure to provide adequate certification. The employer 
shall advise an employee whenever the employer finds a certification 
incomplete, and provide the employee a reasonable opportunity to cure 
any such deficiency.
    (e) If the employer's sick or medical leave plan imposes medical 
certification requirements that are less stringent than the 
certification requirements of these regulations, and the employee or 
employer elects to substitute paid sick, vacation, personal or family 
leave for unpaid FMLA leave where authorized (see Sec. 825.207), only 
the employer's less stringent sick leave certification requirements may 
be imposed.


Sec. 825.306  How much information may be required in medical 
certifications of a serious health condition?

    (a) DOL has developed an optional form (Form WH-380, as revised) 
for employees' (or their family members') use in obtaining medical 
certification, including second and third opinions, from health care 
providers that meets FMLA's certification requirements. (See Appendix B 
to these regulations.) This optional form reflects certification 
requirements so as to permit the health care provider to furnish 
appropriate medical information within his or her knowledge. 
[[Page 2259]] 
    (b) Form WH-380, as revised, or another form containing the same 
basic information, may be used by the employer; however, no additional 
information may be required. In all instances the information on the 
form must relate only to the serious health condition for which the 
current need for leave exists. The form identifies the health care 
provider and type of medical practice (including pertinent 
specialization, if any), makes maximum use of checklist entries for 
ease in completing the form, and contains required entries for:
    (1) A certification as to which part of the definition of ``serious 
health condition'' (see Sec. 825.114), if any, applies to the patient's 
condition, and the medical facts which support the certification, 
including a brief statement as to how the medical facts meet the 
criteria of the definition.
    (2)(i) The approximate date the serious health condition commenced, 
and its probable duration, including the probable duration of the 
patient's present incapacity (defined to mean inability to work, attend 
school or perform other regular daily activities due to the serious 
health condition, treatment therefor, or recovery therefrom) if 
different.
    (ii) Whether it will be necessary for the employee to take leave 
intermittently or to work on a reduced leave schedule basis (i.e., 
part-time) as a result of the serious health condition (see 
Sec. 825.117 and Sec. 825.203), and if so, the probable duration of 
such schedule.
    (iii) If the condition is pregnancy or a chronic condition within 
the meaning of Sec. 825.114(a)(2)(iii), whether the patient is 
presently incapacitated and the likely duration and frequency of 
episodes of incapacity.
    (3)(i)(A) If additional treatments will be required for the 
condition, an estimate of the probable number of such treatments.
    (B) If the patient's incapacity will be intermittent, or will 
require a reduced leave schedule, an estimate of the probable number 
and interval between such treatments, actual or estimated dates of 
treatment if known, and period required for recovery if any.
    (ii) If any of the treatments referred to in subparagraph (i) will 
be provided by another provider of health services (e.g., physical 
therapist), the nature of the treatments.
    (iii) If a regimen of continuing treatment by the patient is 
required under the supervision of the health care provider, a general 
description of the regimen (see Sec. 825.114(b)).
    (4) If medical leave is required for the employee's absence from 
work because of the employee's own condition (including absences due to 
pregnancy or a chronic condition), whether the employee:
    (i) Is unable to perform work of any kind;
    (ii) Is unable to perform any one or more of the essential 
functions of the employee's position, including a statement of the 
essential functions the employee is unable to perform (see 
Sec. 825.115), based on either information provided on a statement from 
the employer of the essential functions of the position or, if not 
provided, discussion with the employee about the employee's job 
functions; or
    (iii) Must be absent from work for treatment.
    (5)(i) If leave is required to care for a family member of the 
employee with a serious health condition, whether the patient requires 
assistance for basic medical or personal needs or safety, or for 
transportation; or if not, whether the employee's presence to provide 
psychological comfort would be beneficial to the patient or assist in 
the patient's recovery. The employee is required to indicate on the 
form the care he or she will provide and an estimate of the time 
period.
    (ii) If the employee's family member will need care only 
intermittently or on a reduced leave schedule basis (i.e., part-time), 
the probable duration of the need.
    (c) If the employer's sick or medical leave plan requires less 
information to be furnished in medical certifications than the 
certification requirements of these regulations, and the employee or 
employer elects to substitute paid sick, vacation, personal or family 
leave for unpaid FMLA leave where authorized (see Sec. 825.207), only 
the employer's lesser sick leave certification requirements may be 
imposed.


Sec. 825.307  What may an employer do if it questions the adequacy of a 
medical certification?

    (a) If an employee submits a complete certification signed by the 
health care provider, the employer may not request additional 
information from the employee's health care provider. However, a health 
care provider representing the employer may contact the employee's 
health care provider, with the employee's permission, for purposes of 
clarification and authenticity of the medical certification.
    (1) If an employee is on FMLA leave running concurrently with a 
workers' compensation absence, and the provisions of the workers' 
compensation statute permit the employer or the employer's 
representative to have direct contact with the employee's workers' 
compensation health care provider, the employer may follow the workers' 
compensation provisions.
    (2) An employer who has reason to doubt the validity of a medical 
certification may require the employee to obtain a second opinion at 
the employer's expense. Pending receipt of the second (or third) 
medical opinion, the employee is provisionally entitled to the benefits 
of the Act, including maintenance of group health benefits. If the 
certifications do not ultimately establish the employee's entitlement 
to FMLA leave, the leave shall not be designated as FMLA leave and may 
be treated as paid or unpaid leave under the employer's established 
leave policies. The employer is permitted to designate the health care 
provider to furnish the second opinion, but the selected health care 
provider may not be employed on a regular basis by the employer. See 
also Sec. 825.305(a)(3).
    (b) The employer may not regularly contract with or otherwise 
regularly utilize the services of the health care provider furnishing 
the second opinion unless the employer is located in an area where 
access to health care is extremely limited (e.g., a rural area where no 
more than one or two doctors practice in the relevant specialty in the 
vicinity).
    (c) If the opinions of the employee's and the employer's designated 
health care providers differ, the employer may require the employee to 
obtain certification from a third health care provider, again at the 
employer's expense. This third opinion shall be final and binding. The 
third health care provider must be designated or approved jointly by 
the employer and the employee. The employer and the employee must each 
act in good faith to attempt to reach agreement on whom to select for 
the third opinion provider. If the employer does not attempt in good 
faith to reach agreement, the employer will be bound by the first 
certification. If the employee does not attempt in good faith to reach 
agreement, the employee will be bound by the second certification. For 
example, an employee who refuses to agree to see a doctor in the 
specialty in question may be failing to act in good faith. On the other 
hand, an employer that refuses to agree to any doctor on a list of 
specialists in the appropriate field provided by the employee and whom 
the employee has not previously consulted may be failing to act in good 
faith.
    (d) The employer is required to provide the employee with a copy of 
the second and third medical opinions, where applicable, upon request 
by the [[Page 2260]] employee. Requested copies are to be provided 
within two business days unless extenuating circumstances prevent such 
action.
    (e) If the employer requires the employee to obtain either a second 
or third opinion the employer must reimburse an employee or family 
member for any reasonable ``out of pocket'' travel expenses incurred to 
obtain the second and third medical opinions. The employer may not 
require the employee or family member to travel outside normal 
commuting distance for purposes of obtaining the second or third 
medical opinions except in very unusual circumstances.
    (f) In circumstances when the employee or a family member is 
visiting in another country, or a family member resides in another 
country, and a serious health condition develops, the employer shall 
accept a medical certification as well as second and third opinions 
from a health care provider who practices in that country.


Sec. 825.308  Under what circumstances may an employer request 
subsequent recertifications of medical conditions?

    (a) For pregnancy, chronic, or permanent/long-term conditions under 
continuing supervision of a health care provider (as defined in 
Sec. 825.114(a)(2)(ii), (iii) or (iv)), an employer may request 
recertification no more often than every 30 days and only in connection 
with an absence by the employee, unless:
    (1) Circumstances described by the previous certification have 
changed significantly (e.g., the duration or frequency of absences, the 
severity of the condition, complications); or
    (2) The employer receives information that casts doubt upon the 
employee's stated reason for the absence.
    (b)(1) If the minimum duration of the period of incapacity 
specified on a certification furnished by the health care provider is 
more than 30 days, the employer may not request recertification until 
that minimum duration has passed unless one of the conditions set forth 
in paragraph (c)(1), (2) or (3) of this section is met.
    (2) For FMLA leave taken intermittently or on a reduced leave 
schedule basis, the employer may not request recertification in less 
than the minimum period specified on the certification as necessary for 
such leave (including treatment) unless one of the conditions set forth 
in paragraph (c)(1), (2) or (3) of this section is met.
    (c) For circumstances not covered by paragraphs (a) or (b) of this 
section, an employer may request recertification at any reasonable 
interval, but not more often than every 30 days, unless:
    (1) The employee requests an extension of leave;
    (2) Circumstances described by the previous certification have 
changed significantly (e.g., the duration of the illness, the nature of 
the illness, complications); or
    (3) The employer receives information that casts doubt upon the 
continuing validity of the certification.
    (d) The employee must provide the requested recertification to the 
employer within the time frame requested by the employer (which must 
allow at least 15 calendar days after the employer's request), unless 
it is not practicable under the particular circumstances to do so 
despite the employee's diligent, good faith efforts.
    (e) Any recertification requested by the employer shall be at the 
employee's expense unless the employer provides otherwise. No second or 
third opinion on recertification may be required.


Sec. 825.309  What notice may an employer require regarding an 
employee's intent to return to work?

    (a) An employer may require an employee on FMLA leave to report 
periodically on the employee's status and intent to return to work. The 
employer's policy regarding such reports may not be discriminatory and 
must take into account all of the relevant facts and circumstances 
related to the individual employee's leave situation.
    (b) If an employee gives unequivocal notice of intent not to return 
to work, the employer's obligations under FMLA to maintain health 
benefits (subject to COBRA requirements) and to restore the employee 
cease. However, these obligations continue if an employee indicates he 
or she may be unable to return to work but expresses a continuing 
desire to do so.
    (c) It may be necessary for an employee to take more leave than 
originally anticipated. Conversely, an employee may discover after 
beginning leave that the circumstances have changed and the amount of 
leave originally anticipated is no longer necessary. An employee may 
not be required to take more FMLA leave than necessary to resolve the 
circumstance that precipitated the need for leave. In both of these 
situations, the employer may require that the employee provide the 
employer reasonable notice (i.e.,within two business days) of the 
changed circumstances where foreseeable. The employer may also obtain 
information on such changed circumstances through requested status 
reports.


Sec. 825.310  Under what circumstances may an employer require that an 
employee submit a medical certification that the employee is able (or 
unable) to return to work (i.e., a ``fitness-for-duty'' report)?

    (a) As a condition of restoring an employee whose FMLA leave was 
occasioned by the employee's own serious health condition that made the 
employee unable to perform the employee's job, an employer may have a 
uniformly-applied policy or practice that requires all similarly-
situated employees (i.e., same occupation, same serious health 
condition) who take leave for such conditions to obtain and present 
certification from the employee's health care provider that the 
employee is able to resume work.
    (b) If State or local law or the terms of a collective bargaining 
agreement govern an employee's return to work, those provisions shall 
be applied. Similarly, requirements under the Americans with 
Disabilities Act (ADA) that any return-to-work physical be job-related 
and consistent with business necessity apply. For example, an attorney 
could not be required to submit to a medical examination or inquiry 
just because her leg had been amputated. The essential functions of an 
attorney's job do not require use of both legs; therefore such an 
inquiry would not be job related. An employer may require a warehouse 
laborer, whose back impairment affects the ability to lift, to be 
examined by an orthopedist, but may not require this employee to submit 
to an HIV test where the test is not related to either the essential 
functions of his/her job or to his/her impairment.
    (c) An employer may seek fitness-for-duty certification only with 
regard to the particular health condition that caused the employee's 
need for FMLA leave. The certification itself need only be a simple 
statement of an employee's ability to return to work. A health care 
provider employed by the employer may contact the employee's health 
care provider with the employee's permission, for purposes of 
clarification of the employee's fitness to return to work. No 
additional information may be acquired, and clarification may be 
requested only for the serious health condition for which FMLA leave 
was taken. The employer may not delay the employee's return to work 
while contact with the health care provider is being made.
    (d) The cost of the certification shall be borne by the employee 
and the employee is not entitled to be paid for [[Page 2261]] the time 
or travel costs spent in acquiring the certification.
    (e) The notice that employers are required to give to each employee 
giving notice of the need for FMLA leave regarding their FMLA rights 
and obligations (see Sec. 825.301) shall advise the employee if the 
employer will require fitness-for-duty certification to return to work. 
If the employer has a handbook explaining employment policies and 
benefits, the handbook should explain the employer's general policy 
regarding any requirement for fitness-for-duty certification to return 
to work. Specific notice shall also be given to any employee from whom 
fitness-for-duty certification will be required either at the time 
notice of the need for leave is given or immediately after leave 
commences and the employer is advised of the medical circumstances 
requiring the leave, unless the employee's condition changes from one 
that did not previously require certification pursuant to the 
employer's practice or policy. No second or third fitness-for-duty 
certification may be required.
    (f) An employer may delay restoration to employment until an 
employee submits a required fitness-for-duty certification unless the 
employer has failed to provide the notices required in paragraph (c) of 
this section.
    (g) An employer is not entitled to certification of fitness to 
return to duty when the employee takes intermittent leave as described 
in Sec. 825.203.
    (h) When an employee is unable to return to work after FMLA leave 
because of the continuation, recurrence, or onset of the employee's or 
family member's serious health condition, thereby preventing the 
employer from recovering its share of health benefit premium payments 
made on the employee's behalf during a period of unpaid FMLA leave, the 
employer may require medical certification of the employee's or the 
family member's serious health condition. (See Sec. 825.213(a)(3).) The 
cost of the certification shall be borne by the employee and the 
employee is not entitled to be paid for the time or travel costs spent 
in acquiring the certification.


Sec. 825.311  What happens if an employee fails to satisfy the medical 
certification and/or recertification requirements?

    (a) In the case of foreseeable leave, an employer may delay the 
taking of FMLA leave to an employee who fails to provide timely 
certification after being requested by the employer to furnish such 
certification ( i.e., within 15 calendar days, if practicable), until 
the required certification is provided.
    (b) When the need for leave is not foreseeable, or in the case of 
recertification, an employee must provide certification (or 
recertification) within the time frame requested by the employer (which 
must allow at least 15 days after the employer's request) or as soon as 
reasonably possible under the particular facts and circumstances. In 
the case of a medical emergency, it may not be practicable for an 
employee to provide the required certification within 15 calendar days. 
If an employee fails to provide a medical certification within a 
reasonable time under the pertinent circumstances, the employer may 
delay the employee's continuation of FMLA leave. If the employee never 
produces the certification, the leave is not FMLA leave.
    (c) When requested by the employer pursuant to a uniformly applied 
policy for similarly-situated employees, the employee must provide 
medical certification at the time the employee seeks reinstatement at 
the end of FMLA leave taken for the employee's serious health 
condition, that the employee is fit for duty and able to return to work 
(see Sec. 825.310(a)) if the employer has provided the required notice 
(see Sec. 825.301(c); the employer may delay restoration until the 
certification is provided. In this situation, unless the employee 
provides either a fitness-for-duty certification or a new medical 
certification for a serious health condition at the time FMLA leave is 
concluded, the employee may be terminated. See also Sec. 825.213(a)(3).


Sec. 825.312  Under what circumstances may a covered employer refuse to 
provide FMLA leave or reinstatement to eligible employees?

    (a) If an employee fails to give timely advance notice when the 
need for FMLA leave is foreseeable, the employer may delay the taking 
of FMLA leave until 30 days after the date the employee provides notice 
to the employer of the need for FMLA leave. (See Sec. 825.302.)
    (b) If an employee fails to provide in a timely manner a requested 
medical certification to substantiate the need for FMLA leave due to a 
serious health condition, an employer may delay continuation of FMLA 
leave until an employee submits the certificate. (See Secs. 825.305 and 
825.310.) If the employee never produces the certification, the leave 
is not FMLA leave.
    (c) If an employee fails to provide a requested fitness-for-duty 
certification to return to work, an employer may delay restoration 
until the employee submits the certificate. (See Secs. 825.309 and 
825.310.)
    (d) An employee has no greater right to reinstatement or to other 
benefits and conditions of employment than if the employee had been 
continuously employed during the FMLA leave period. Thus, an employee's 
rights to continued leave, maintenance of health benefits, and 
restoration cease under FMLA if and when the employment relationship 
terminates (e.g., layoff), unless that relationship continues, for 
example, by the employee remaining on paid FMLA leave. If the employee 
is recalled or otherwise re-employed, an eligible employee is 
immediately entitled to further FMLA leave for an FMLA-qualifying 
reason. An employer must be able to show, when an employee requests 
restoration, that the employee would not otherwise have been employed 
if leave had not been taken in order to deny restoration to employment. 
(See Sec. 825.216.)
    (e) An employer may require an employee on FMLA leave to report 
periodically on the employee's status and intention to return to work. 
(See Sec. 825.309.) If an employee unequivocally advises the employer 
either before or during the taking of leave that the employee does not 
intend to return to work, and the employment relationship is 
terminated, the employee's entitlement to continued leave, maintenance 
of health benefits, and restoration ceases unless the employment 
relationship continues, for example, by the employee remaining on paid 
leave. An employee may not be required to take more leave than 
necessary to address the circumstances for which leave was taken. If 
the employee is able to return to work earlier than anticipated, the 
employee shall provide the employer two business days notice where 
feasible; the employer is required to restore the employee once such 
notice is given, or where such prior notice was not feasible.
    (f) An employer may deny restoration to employment, but not the 
taking of FMLA leave and the maintenance of health benefits, to an 
eligible employee only under the terms of the ``key employee'' 
exemption. Denial of reinstatement must be necessary to prevent 
``substantial and grievous economic injury'' to the employer's 
operations. The employer must notify the employee of the employee's 
status as a ``key employee'' and of the employer's intent to deny 
reinstatement on that basis when the employer makes these 
determinations. If leave has started, the employee must be given a 
reasonable [[Page 2262]] opportunity to return to work after being so 
notified. (See Sec. 825.220.)
    (g) An employee who fraudulently obtains FMLA leave from an 
employer is not protected by FMLA's job restoration or maintenance of 
health benefits provisions.
    (h) If the employer has a uniformly-applied policy governing 
outside or supplemental employment, such a policy may continue to apply 
to an employee while on FMLA leave. An employer which does not have 
such a policy may not deny benefits to which an employee is entitled 
under FMLA on this basis unless the FMLA leave was fraudulently 
obtained as in paragraph (g) of this section.

Subpart D--What Enforcement Mechanisms Does FMLA Provide?


Sec. 825.400  What can employees do who believe that their rights under 
FMLA have been violated?

    (a) The employee has the choice of:
    (1) Filing, or having another person file on his or her behalf, a 
complaint with the Secretary of Labor, or
    (2) Filing a private lawsuit pursuant to section 107 of FMLA.
    (b) If the employee files a private lawsuit, it must be filed 
within two years after the last action which the employee contends was 
in violation of the Act, or three years if the violation was willful.
    (c) If an employer has violated one or more provisions of FMLA, and 
if justified by the facts of a particular case, an employee may receive 
one or more of the following: wages, employment benefits, or other 
compensation denied or lost to such employee by reason of the 
violation; or, where no such tangible loss has occurred, such as when 
FMLA leave was unlawfully denied, any actual monetary loss sustained by 
the employee as a direct result of the violation, such as the cost of 
providing care, up to a sum equal to 12 weeks of wages for the 
employee. In addition, the employee may be entitled to interest on such 
sum, calculated at the prevailing rate. An amount equalling the 
preceding sums may also be awarded as liquidated damages unless such 
amount is reduced by the court because the violation was in good faith 
and the employer had reasonable grounds for believing the employer had 
not violated the Act. When appropriate, the employee may also obtain 
appropriate equitable relief, such as employment, reinstatement and 
promotion. When the employer is found in violation, the employee may 
recover a reasonable attorney's fee, reasonable expert witness fees, 
and other costs of the action from the employer in addition to any 
judgment awarded by the court.


Sec. 825.401  Where may an employee file a complaint of FMLA violations 
with the Federal government?

    (a) A complaint may be filed in person, by mail or by telephone, 
with the Wage and Hour Division, Employment Standards Administration, 
U.S. Department of Labor. A complaint may be filed at any local office 
of the Wage and Hour Division; the address and telephone number of 
local offices may be found in telephone directories.
    (b) A complaint filed with the Secretary of Labor should be filed 
within a reasonable time of when the employee discovers that his or her 
FMLA rights have been violated. In no event may a complaint be filed 
more than two years after the action which is alleged to be a violation 
of FMLA occurred, or three years in the case of a willful violation.
    (c) No particular form of complaint is required, except that a 
complaint must be reduced to writing and should include a full 
statement of the acts and/or omissions, with pertinent dates, which are 
believed to constitute the violation.


Sec. 825.402  How is an employer notified of a violation of the posting 
requirement?

    Section 825.300 describes the requirements for covered employers to 
post a notice for employees that explains the Act's provisions. If a 
representative of the Department of Labor determines that an employer 
has committed a willful violation of this posting requirement, and that 
the imposition of a civil money penalty for such violation is 
appropriate, the representative may issue and serve a notice of penalty 
on such employer in person or by certified mail. Where service by 
certified mail is not accepted, notice shall be deemed received on the 
date of attempted delivery. Where service is not accepted, the notice 
may be served by regular mail.


Sec. 825.403  How may an employer appeal the assessment of a penalty 
for willful violation of the posting requirement?

    (a) An employer may obtain a review of the assessment of penalty 
from the Wage and Hour Regional Administrator for the region in which 
the alleged violation(s) occurred. If the employer does not seek such a 
review or fails to do so in a timely manner, the notice of the penalty 
constitutes the final ruling of the Secretary of Labor.
    (b) To obtain review, an employer may file a petition with the Wage 
and Hour Regional Administrator for the region in which the alleged 
violations occurred. No particular form of petition for review is 
required, except that the petition must be in writing, should contain 
the legal and factual bases for the petition, and must be mailed to the 
Regional Administrator within 15 days of receipt of the notice of 
penalty. The employer may request an oral hearing which may be 
conducted by telephone.
    (c) The decision of the Regional Administrator constitutes the 
final order of the Secretary.


Sec. 825.404  What are the consequences of an employer not paying the 
penalty assessment after a final order is issued?

    The Regional Administrator may seek to recover the unpaid penalty 
pursuant to the Debt Collection Act (DCA), 31 U.S.C. 3711 et seq., and, 
in addition to seeking recovery of the unpaid final order, may seek 
interest and penalties as provided under the DCA. The final order may 
also be referred to the Solicitor of Labor for collection. The 
Secretary may file suit in any court of competent jurisdiction to 
recover the monies due as a result of the unpaid final order, interest, 
and penalties.

Subpart E--What Records Must Be Kept to Comply With the FMLA?


Sec. 825.500  What records must an employer keep to comply with the 
FMLA?

    (a) FMLA provides that covered employers shall make, keep, and 
preserve records pertaining to their obligations under the Act in 
accordance with the recordkeeping requirements of section 11(c) of the 
Fair Labor Standards Act (FLSA) and in accordance with these 
regulations. FMLA also restricts the authority of the Department of 
Labor to require any employer or plan, fund or program to submit books 
or records more than once during any 12-month period unless the 
Department has reasonable cause to believe a violation of the FMLA 
exists or the DOL is investigating a complaint. These regulations 
establish no requirement for the submission of any records unless 
specifically requested by a Departmental official.
    (b) Form of records. No particular order or form of records is 
required. These regulations establish no requirement that any employer 
revise its computerized payroll or personnel records systems to comply. 
However, employers must keep the records specified by these regulations 
for no less than three years and make them available for inspection, 
copying, and transcription by representatives of the Department of 
Labor upon request. The records may be maintained and preserved on 
microfilm or other basic source document of an automated data 
[[Page 2263]] processing memory provided that adequate projection or 
viewing equipment is available, that the reproductions are clear and 
identifiable by date or pay period, and that extensions or 
transcriptions of the information required herein can be and are made 
available upon request. Records kept in computer form must be made 
available for transcription or copying.
    (c) Items required. Covered employers who have eligible employees 
must maintain records that must disclose the following:
    (1) Basic payroll and identifying employee data, including name, 
address, and occupation; rate or basis of pay and terms of 
compensation; daily and weekly hours worked per pay period; additions 
to or deductions from wages; and total compensation paid.
    (2) Dates FMLA leave is taken by FMLA eligible employees (e.g., 
available from time records, requests for leave, etc., if so 
designated). Leave must be designated in records as FMLA leave; leave 
so designated may not include leave required under State law or an 
employer plan which is not also covered by FMLA.
    (3) If FMLA leave is taken by eligible employees in increments of 
less than one full day, the hours of the leave.
    (4) 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 as required under FMLA and these 
regulations (see Sec. 825.301(c)). Copies may be maintained in employee 
personnel files.
    (5) Any documents (including written and electronic records) 
describing employee benefits or employer policies and practices 
regarding the taking of paid and unpaid leaves.
    (6) Premium payments of employee benefits.
    (7) Records of any dispute between the employer and an eligible 
employee regarding designation of leave as FMLA leave, including any 
written statement from the employer or employee of the reasons for the 
designation and for the disagreement.
    (d) Covered employers with no eligible employees must maintain the 
records set forth in paragraph (c)(1) above.
    (e) Covered employers in a joint employment situation (see 
Sec. 825.106) must keep all the records required by paragraph (c) of 
this section with respect to any primary employees, and must keep the 
records required by paragraph (c)(1) with respect to any secondary 
employees.
    (f) If FMLA-eligible employees are not subject to FLSA's 
recordkeeping regulations for purposes of minimum wage or overtime 
compliance (i.e., not covered by or exempt from FLSA), an employer need 
not keep a record of actual hours worked (as otherwise required under 
FLSA, 29 CFR 516.2(a)(7)), provided that:
    (1) eligibility for FMLA leave is presumed for any employee who has 
been employed for at least 12 months; and
    (2) with respect to employees who take FMLA leave intermittently or 
on a reduced leave schedule, the employer and employee agree on the 
employee's normal schedule or average hours worked each week and reduce 
their agreement to a written record maintained in accordance with 
paragraph (b) of this section.
    (g) 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 in separate files/records from the usual 
personnel files, and if ADA is also applicable, such records shall be 
maintained in conformance with ADA confidentiality requirements (see 29 
CFR Sec. 1630.14(c)(1)), except that:
    (1) Supervisors and managers may be informed regarding necessary 
restrictions on the work or duties of an employee and necessary 
accommodations;
    (2) First aid and safety personnel may be informed (when 
appropriate) if the employee's physical or medical condition might 
require emergency treatment; and
    (3) Government officials investigating compliance with FMLA (or 
other pertinent law) shall be provided relevant information upon 
request.

Subpart F--What Special Rules Apply to Employees of Schools?


Sec. 825.600  To whom do the special rules apply?

    (a) Certain special rules apply to employees of ``local educational 
agencies,'' including public school boards and elementary and secondary 
schools under their jurisdiction, and private elementary and secondary 
schools. The special rules do not apply to other kinds of educational 
institutions, such as colleges and universities, trade schools, and 
preschools.
    (b) Educational institutions are covered by FMLA (and these special 
rules) and the Act's 50-employee coverage test does not apply. The 
usual requirements for employees to be ``eligible'' do apply, however, 
including employment at a worksite where at least 50 employees are 
employed within 75 miles. For example, employees of a rural school 
would not be eligible for FMLA leave if the school has fewer than 50 
employees and there are no other schools under the jurisdiction of the 
same employer (usually, a school board) within 75 miles.
    (c) The special rules affect the taking of intermittent leave or 
leave on a reduced leave schedule, or leave near the end of an academic 
term (semester), by instructional employees. ``Instructional 
employees'' are those whose principal function is to teach and instruct 
students in a class, a small group, or an individual setting. This term 
includes not only teachers, but also athletic coaches, driving 
instructors, and special education assistants such as signers for the 
hearing impaired. It does not include, and the special rules do not 
apply to, teacher assistants or aides who do not have as their 
principal job actual teaching or instructing, nor does it include 
auxiliary personnel such as counselors, psychologists, or curriculum 
specialists. It also does not include cafeteria workers, maintenance 
workers, or bus drivers.
    (d) Special rules which apply to restoration to an equivalent 
position apply to all employees of local educational agencies.


Sec. 825.601  What limitations apply to the taking of intermittent 
leave or leave on a reduced leave schedule?

    (a) Leave taken for a period that ends with the school year and 
begins the next semester is leave taken consecutively rather than 
intermittently. The period during the summer vacation when the employee 
would not have been required to report for duty is not counted against 
the employee's FMLA leave entitlement. An instructional employee who is 
on FMLA leave at the end of the school year must be provided with any 
benefits over the summer vacation that employees would normally receive 
if they had been working at the end of the school year.
    (1) If an eligible instructional employee needs intermittent leave 
or leave on a reduced leave schedule to care for a family member, or 
for the employee's own serious health condition, which is foreseeable 
based on planned medical treatment, and the employee would be on leave 
for more than 20 percent of the total number of working days over the 
period the leave would extend, the employer may require the employee to 
choose either to: [[Page 2264]] 
    (i) Take leave for a period or periods of a particular duration, 
not greater than the duration of the planned treatment; or
    (ii) Transfer temporarily to an available alternative position for 
which the employee is qualified, which has equivalent pay and benefits 
and which better accommodates recurring periods of leave than does the 
employee's regular position.
    (2) These rules apply only to a leave involving more than 20 
percent of the working days during the period over which the leave 
extends. For example, if an instructional employee who normally works 
five days each week needs to take two days of FMLA leave per week over 
a period of several weeks, the special rules would apply. Employees 
taking leave which constitutes 20 percent or less of the working days 
during the leave period would not be subject to transfer to an 
alternative position. ``Periods of a particular duration'' means a 
block, or blocks, of time beginning no earlier than the first day for 
which leave is needed and ending no later than the last day on which 
leave is needed, and may include one uninterrupted period of leave.
    (b) If an instructional employee does not give required notice of 
foreseeable FMLA leave (see Sec. 825.302) to be taken intermittently or 
on a reduced leave schedule, the employer may require the employee to 
take leave of a particular duration, or to transfer temporarily to an 
alternative position. Alternatively, the employer may require the 
employee to delay the taking of leave until the notice provision is 
met. See Sec. 825.207(h).


Sec. 825.602  What limitations apply to the taking of leave near the 
end of an academic term?

    (a) There are also different rules for instructional employees who 
begin leave more than five weeks before the end of a term, less than 
five weeks before the end of a term, and less than three weeks before 
the end of a term. Regular rules apply except in circumstances when:
    (1) An instructional employee begins leave more than five weeks 
before the end of a term. The employer may require the employee to 
continue taking leave until the end of the term if--
    (i) The leave will last at least three weeks, and
    (ii) The employee would return to work during the three-week period 
before the end of the term.
    (2) The employee begins leave for a purpose other than the 
employee's own serious health condition during the five-week period 
before the end of a term. The employer may require the employee to 
continue taking leave until the end of the term if--
    (i) The leave will last more than two weeks, and
    (ii) The employee would return to work during the two-week period 
before the end of the term.
    (3) The employee begins leave for a purpose other than the 
employee's own serious health condition during the three-week period 
before the end of a term, and the leave will last more than five 
working days. The employer may require the employee to continue taking 
leave until the end of the term.
    (b) For purposes of these provisions, ``academic term'' means the 
school semester, which typically ends near the end of the calendar year 
and the end of spring each school year. In no case may a school have 
more than two academic terms or semesters each year for purposes of 
FMLA. An example of leave falling within these provisions would be 
where an employee plans two weeks of leave to care for a family member 
which will begin three weeks before the end of the term. In that 
situation, the employer could require the employee to stay out on leave 
until the end of the term.


Sec. 825.603  Is all leave taken during ``periods of a particular 
duration'' counted against the FMLA leave entitlement?

     (a) If an employee chooses to take leave for ``periods of a 
particular duration'' in the case of intermittent or reduced schedule 
leave, the entire period of leave taken will count as FMLA leave.
     (b) In the case of an employee who is required to take leave until 
the end of an academic term, only the period of leave until the 
employee is ready and able to return to work shall be charged against 
the employee's FMLA leave entitlement. The employer has the option not 
to require the employee to stay on leave until the end of the school 
term. Therefore, any additional leave required by the employer to the 
end of the school term is not counted as FMLA leave; however, the 
employer shall be required to maintain the employee's group health 
insurance and restore the employee to the same or equivalent job 
including other benefits at the conclusion of the leave.


Sec. 825.604  What special rules apply to restoration to ``an 
equivalent position?''

    The determination of how an employee is to be restored to ``an 
equivalent position'' upon return from FMLA leave will be made on the 
basis of ``established school board policies and practices, private 
school policies and practices, and collective bargaining agreements.'' 
The ``established policies'' and collective bargaining agreements used 
as a basis for restoration must be in writing, must be made known to 
the employee prior to the taking of FMLA leave, and must clearly 
explain the employee's restoration rights upon return from leave. Any 
established policy which is used as the basis for restoration of an 
employee to ``an equivalent position'' must provide substantially the 
same protections as provided in the Act for reinstated employees. See 
Sec. 825.215. In other words, the policy or collective bargaining 
agreement must provide for restoration to an ``equivalent position'' 
with equivalent employment benefits, pay, and other terms and 
conditions of employment. For example, an employee may not be restored 
to a position requiring additional licensure or certification.

Subpart G--How Do Other Laws, Employer Practices, and Collective 
Bargaining Agreements Affect Employee Rights Under FMLA?


Sec. 825.700  What if an employer provides more generous benefits than 
required by FMLA?

    (a) An employer must observe any employment benefit program or plan 
that provides greater family or medical leave rights to employees than 
the rights established by the FMLA. Conversely, the rights established 
by the Act may not be diminished by any employment benefit program or 
plan. For example, a provision of a CBA which provides for 
reinstatement to a position that is not equivalent because of seniority 
(e.g., provides lesser pay) is superseded by FMLA. If an employer 
provides greater unpaid family leave rights than are afforded by FMLA, 
the employer is not required to extend additional rights afforded by 
FMLA, such as maintenance of health benefits (other than through 
COBRA), to the additional leave period not covered by FMLA. If an 
employee takes paid or unpaid leave and the employer does not designate 
the leave as FMLA leave, the leave taken does not count against an 
employee's FMLA entitlement.
    (b) Nothing in this Act prevents an employer from amending existing 
leave and employee benefit programs, provided they comply with FMLA. 
However, nothing in the Act is intended to discourage employers from 
adopting or retaining more generous leave policies.
    (c)(1) The Act does not apply to employees under a collective 
bargaining agreement (CBA) in effect on August 5, 1993, until February 
5, 1994, or the date the agreement terminates (i.e., its 
[[Page 2265]] expiration date), whichever is earlier. Thus, if the CBA 
contains family or medical leave benefits, whether greater or less than 
those under the Act, such benefits are not disturbed until the Act's 
provisions begin to apply to employees under that agreement. A CBA 
which provides no family or medical leave rights also continues in 
effect. For CBAs subject to the Railway Labor Act and other CBAs which 
do not have an expiration date for the general terms, but which may be 
reopened at specified times, e.g., to amend wages and benefits, the 
first time the agreement is amended after August 5, 1993, shall be 
considered the termination date of the CBA, and the effective date for 
FMLA.
    (2) As discussed in Sec. 825.102(b), the period prior to the Act's 
delayed effective date must be considered in determining employer 
coverage and employee eligibility for FMLA leave.


Sec. 825.701  Do State laws providing family and medical leave still 
apply?

    (a) Nothing in FMLA supersedes any provision of State or local law 
that provides greater family or medical leave rights than those 
provided by FMLA. The Department of Labor will not, however, enforce 
State family or medical leave laws, and States may not enforce the 
FMLA. Employees are not required to designate whether the leave they 
are taking is FMLA leave or leave under State law, and an employer must 
comply with the appropriate (applicable) provisions of both. An 
employer covered by one law and not the other has to comply only with 
the law under which it is covered. Similarly, an employee eligible 
under only one law must receive benefits in accordance with that law. 
If leave qualifies for FMLA leave and leave under State law, the leave 
used counts against the employee's entitlement under both laws. 
Examples of the interaction between FMLA and State laws include:
    (1) If State law provides 16 weeks of leave entitlement over two 
years, an employee would be entitled to take 16 weeks one year under 
State law and 12 weeks the next year under FMLA. Health benefits 
maintenance under FMLA would be applicable only to the first 12 weeks 
of leave entitlement each year. If the employee took 12 weeks the first 
year, the employee would be entitled to a maximum of 12 weeks the 
second year under FMLA (not 16 weeks). An employee would not be 
entitled to 28 weeks in one year.
    (2) If State law provides half-pay for employees temporarily 
disabled because of pregnancy for six weeks, the employee would be 
entitled to an additional six weeks of unpaid FMLA leave (or accrued 
paid leave).
    (3) A shorter notice period under State law must be allowed by the 
employer unless an employer has already provided, or the employee is 
requesting, more leave than required under State law.
    (4) If State law provides for only one medical certification, no 
additional certifications may be required by the employer unless the 
employer has already provided, or the employee is requesting, more 
leave than required under State law.
    (5) If State law provides six weeks of leave, which may include 
leave to care for a seriously-ill grandparent or a ``spouse 
equivalent,'' and leave was used for that purpose, the employee is 
still entitled to 12 weeks of FMLA leave, as the leave used was 
provided for a purpose not covered by FMLA. If FMLA leave is used first 
for a purpose also provided under State law, and State leave has 
thereby been exhausted, the employer would not be required to provide 
additional leave to care for the grandparent or ``spouse equivalent.''
    (6) If State law prohibits mandatory leave beyond the actual period 
of pregnancy disability, an instructional employee of an educational 
agency subject to special FMLA rules may not be required to remain on 
leave until the end of the academic term, as permitted by FMLA under 
certain circumstances. (See Subpart F of this part.)


Sec. 825.702  How does FMLA affect Federal and State anti-
discrimination laws?

    (a) Nothing in FMLA modifies or affects any Federal or State law 
prohibiting discrimination on the basis of race, religion, color, 
national origin, sex, age, or disability (e.g., Title VII of the Civil 
Rights Act of 1964, as amended by the Pregnancy Discrimination Act). 
FMLA's legislative history explains that FMLA is ``not intended to 
modify or affect the Rehabilitation Act of 1973, as amended, the 
regulations concerning employment which have been promulgated pursuant 
to that statute, or the Americans with Disabilities Act of 1990, or the 
regulations issued under that act. Thus, the leave provisions of the 
[FMLA] are wholly distinct from the reasonable accommodation 
obligations of employers covered under the [ADA], employers who receive 
Federal financial assistance, employers who contract with the Federal 
government, or the Federal government itself. The purpose of the FMLA 
is to make leave available to eligible employees and employers within 
its coverage, and not to limit already existing rights and 
protection.'' S. Rep. No. 3, 103d Cong., 1st Sess. 38 (1993). An 
employer must therefore provide leave under whichever statutory 
provision provides the greater rights to employees. When an employer 
violates both FMLA and a discrimination law, an employee may be able to 
recover under either or both statutes (double relief may not be awarded 
for the same loss; when remedies coincide a claimant may be allowed to 
utilize whichever avenue of relief is desired (Laffey v. Northwest 
Airlines, Inc., 567 F.2d 429, 445 (D.C. Cir. 1976), cert. denied, 434 
U.S. 1086 (1978))).
    (b) If an employee is a qualified individual with a disability 
within the meaning of the Americans with Disabilities Act (ADA), the 
employer must make reasonable accommodations, etc., barring undue 
hardship, in accordance with the ADA. At the same time, the employer 
must afford an employee his or her FMLA rights. ADA's ``disability'' 
and FMLA's ``serious health condition'' are different concepts, and 
must be analyzed separately. FMLA entitles eligible employees to 12 
weeks of leave in any 12-month period, whereas the ADA allows an 
indeterminate amount of leave, barring undue hardship, as a reasonable 
accommodation. FMLA requires employers to maintain employees' group 
health plan coverage during FMLA leave on the same conditions as 
coverage would have been provided if the employee had been continuously 
employed during the leave period, whereas ADA does not require 
maintenance of health insurance unless other employees receive health 
insurance during leave under the same circumstances.
    (c)(1) A reasonable accommodation under the ADA might be 
accomplished by providing an individual with a disability with a part-
time job with no health benefits, assuming the employer did not 
ordinarily provide health insurance for part-time employees. However, 
FMLA would permit an employee to work a reduced leave schedule until 
the equivalent of 12 workweeks of leave were used, with group health 
benefits maintained during this period. FMLA permits an employer to 
temporarily transfer an employee who is taking leave intermittently or 
on a reduced leave schedule to an alternative position, whereas the ADA 
allows an accommodation of reassignment to an equivalent, vacant 
position only if the employee cannot perform the essential functions of 
the employee's present position and an accommodation is not possible in 
the employee's present position, or an accommodation in the employee's 
present position would cause an undue [[Page 2266]] hardship. The 
examples in the following paragraphs of this section demonstrate how 
the two laws would interact with respect to a qualified individual with 
a disability.
    (2) A qualified individual with a disability who is also an 
``eligible employee'' entitled to FMLA leave requests 10 weeks of 
medical leave as a reasonable accommodation, which the employer grants 
because it is not an undue hardship. The employer advises the employee 
that the 10 weeks of leave is also being designated as FMLA leave and 
will count towards the employee's FMLA leave entitlement. This 
designation does not prevent the parties from also treating the leave 
as a reasonable accommodation and reinstating the employee into the 
same job, as required by the ADA, rather than an equivalent position 
under FMLA, if that is the greater right available to the employee. At 
the same time, the employee would be entitled under FMLA to have the 
employer maintain group health plan coverage during the leave, as that 
requirement provides the greater right to the employee.
    (3) If the same employee needed to work part-time (a reduced leave 
schedule) after returning to his or her same job, the employee would 
still be entitled under FMLA to have group health plan coverage 
maintained for the remainder of the two-week equivalent of FMLA leave 
entitlement, notwithstanding an employer policy that part-time 
employees do not receive health insurance. This employee would be 
entitled under the ADA to reasonable accommodations to enable the 
employee to perform the essential functions of the part-time position. 
In addition, because the employee is working a part-time schedule as a 
reasonable accommodation, the employee would be shielded from FMLA's 
provision for temporary assignment to a different alternative position. 
Once the employee has exhausted his or her remaining FMLA leave 
entitlement while working the reduced (part-time) schedule, if the 
employee is a qualified individual with a disability, and if the 
employee is unable to return to the same full-time position at that 
time, the employee might continue to work part-time as a reasonable 
accommodation, barring undue hardship; the employee would then be 
entitled to only those employment benefits ordinarily provided by the 
employer to part-time employees.
    (4) At the end of the FMLA leave entitlement, an employer is 
required under FMLA to reinstate the employee in the same or an 
equivalent position, with equivalent pay and benefits, to that which 
the employee held when leave commenced. The employer's FMLA obligations 
would be satisfied if the employer offered the employee an equivalent 
full-time position. If the employee were unable to perform the 
essential functions of that equivalent position even with reasonable 
accommodation, because of a disability, the ADA may require the 
employer to make a reasonable accommodation at that time by allowing 
the employee to work part-time or by reassigning the employee to a 
vacant position, barring undue hardship.
    (d)(1) If FMLA entitles an employee to leave, an employer may not, 
in lieu of FMLA leave entitlement, require an employee to take a job 
with a reasonable accommodation. However, ADA may require that an 
employer offer an employee the opportunity to take such a position. An 
employer may not change the essential functions of the job in order to 
deny FMLA leave. See Sec. 825.220(b).
    (2) An employee may be on a workers' compensation absence due to an 
on-the-job injury or illness which also qualifies as a serious health 
condition under FMLA. The workers' compensation absence and FMLA leave 
may run concurrently (subject to proper notice and designation by the 
employer). At some point the health care provider providing medical 
care pursuant to the workers' compensation injury may certify the 
employee is able to return to work in a ``light duty'' position. If the 
employer offers such a position, the employee is permitted but not 
required to accept the position (see Sec. 825.220(d)). As a result, the 
employee may no longer qualify for payments from the workers' 
compensation benefit plan, but the employee is entitled to continue on 
unpaid FMLA leave either until the employee is able to return to the 
same or equivalent job the employee left or until the 12-week FMLA 
leave entitlement is exhausted. See Sec. 825.207(d)(1). If the employee 
returning from the workers' compensation injury is a qualified 
individual with a disability, he or she will have rights under the ADA.
    (e) If an employer requires certifications of an employee's fitness 
for duty to return to work, as permitted by FMLA under a uniform 
policy, it must comply with the ADA requirement that a fitness for duty 
physical be job-related and consistent with business necessity.
    (f) Under Title VII of the Civil Rights Act of 1964, as amended by 
the Pregnancy Discrimination Act, an employer should provide the same 
benefits for women who are pregnant as the employer provides to other 
employees with short-term disabilities. Because Title VII does not 
require employees to be employed for a certain period of time to be 
protected, an employee employed for less than 12 months by the employer 
(and, therefore, not an ``eligible'' employee under FMLA) may not be 
denied maternity leave if the employer normally provides short-term 
disability benefits to employees with the same tenure who are 
experiencing other short-term disabilities.
    (g) For further information on Federal antidiscrimination laws, 
including Title VII and the ADA, individuals are encouraged to contact 
the nearest office of the U.S. Equal Employment Opportunity Commission.

Subpart H--Definitions


Sec. 825.800  Definitions.

    For purposes of this part:
    Act or FMLA means the Family and Medical Leave Act of 1993, Public 
Law 103-3 (February 5, 1993), 107 Stat. 6 (29 U.S.C. 2601 et seq.)
    ADA means the Americans With Disabilities Act (42 USC 12101 et 
seq.)
    Administrator means the Administrator of the Wage and Hour 
Division, Employment Standards Administration, U.S. Department of 
Labor, and includes any official of the Wage and Hour Division 
authorized to perform any of the functions of the Administrator under 
this part.
    COBRA means the continuation coverage requirements of Title X of 
the Consolidated Omnibus Budget Reconciliation Act of 1986, As Amended 
(Pub.L. 99-272, title X, section 10002; 100 Stat 227; 29 U.S.C. 1161-
1168).
    Commerce and industry or activity affecting commerce mean any 
activity, business, or industry in commerce or in which a labor dispute 
would hinder or obstruct commerce or the free flow of commerce, and 
include ``commerce'' and any ``industry affecting commerce'' as defined 
in sections 501(1) and 501(3) of the Labor Management Relations Act of 
1947, 29 U.S.C. 142(1) and (3).
    Continuing treatment means: A serious health condition involving 
continuing treatment by a health care provider includes any one or more 
of the following:
    (1) A period of incapacity (i.e., inability to work, attend school 
or perform other regular daily activities due to the serious health 
condition, treatment therefor, or recovery therefrom) of more than 
three consecutive calendar days, and any subsequent treatment or period 
of [[Page 2267]] incapacity relating to the same condition, that also 
involves:
    (i) Treatment two or more times by a health care provider, by a 
nurse or physician's assistant under direct supervision of a health 
care provider, or by a provider of health care services (e.g., physical 
therapist) under orders of, or on referral by, a health care provider; 
or
    (ii) Treatment by a health care provider on at least one occasion 
which results in a regimen of continuing treatment under the 
supervision of the health care provider.
    (2) Any period of incapacity due to pregnancy, or for prenatal 
care.
    (3) Any period of incapacity or treatment for such incapacity due 
to a chronic serious health condition. A chronic serious health 
condition is one which:
    (i) Requires periodic visits for treatment by a health care 
provider, or by a nurse or physician's assistant under direct 
supervision of a health care provider;
    (ii) Continues over an extended period of time (including recurring 
episodes of a single underlying condition); and
    (iii) May cause episodic rather than a continuing period of 
incapacity (e.g., asthma, diabetes, epilepsy, etc.).
    (4) A period of incapacity which is permanent or long-term due to a 
condition for which treatment may not be effective. The employee or 
family member must be under the continuing supervision of, but need not 
be receiving active treatment by, a health care provider. Examples 
include Alzheimer's, a severe stroke, or the terminal stages of a 
disease.
    (5) Any period of absence to receive multiple treatments (including 
any period of recovery therefrom) by a health care provider or by a 
provider of health care services under orders of, or on referral by, a 
health care provider, either for restorative surgery after an accident 
or other injury, or for a condition that would likely result in a 
period of incapacity of more than three consecutive calendar days in 
the absence of medical intervention or treatment, such as cancer 
(chemotherapy, radiation, etc.), severe arthritis (physical therapy), 
kidney disease (dialysis).
    Eligible employee means:
    (1) An employee who has been employed for a total of at least 12 
months by the employer on the date on which any FMLA leave is to 
commence; and
    (2) Who, on the date on which any FMLA leave is to commence, has 
been employed for at least 1,250 hours of service with such employer 
during the previous 12-month period; and
    (3) Who is employed in any State of the United States, the District 
of Columbia or any Territories or possession of the United States.
    (4) Excludes any Federal officer or employee covered under 
subchapter V of chapter 63 of title 5, United States Code; and
    (5) Excludes any employee of the U.S. Senate or the U.S. House of 
Representatives covered under title V of the FMLA; and
    (6) Excludes any employee who is employed at a worksite at which 
the employer employs fewer than 50 employees if the total number of 
employees employed by that employer within 75 miles of that worksite is 
also fewer than 50.
    (7) Excludes any employee employed in any country other than the 
United States or any Territory or possession of the United States.
    Employ means to suffer or permit to work.
    Employee has the meaning given the same term as defined in section 
3(e) of the Fair Labor Standards Act, 29 U.S.C. 203(e), as follows:
    (1) The term ``employee'' means any individual employed by an 
employer;
    (2) In the case of an individual employed by a public agency, 
``employee'' means--
    (i) Any individual employed by the Government of the United 
States--
    (A) As a civilian in the military departments (as defined in 
section 102 of Title 5, United States Code),
    (B) In any executive agency (as defined in section 105 of Title 5, 
United States Code), excluding any Federal officer or employee covered 
under subchapter V of chapter 63 of Title 5, United States Code,
    (C) In any unit of the legislative or judicial branch of the 
Government which has positions in the competitive service, excluding 
any employee of the U.S. Senate or U.S. House of Representatives who is 
covered under Title V of FMLA,
    (D) In a nonappropriated fund instrumentality under the 
jurisdiction of the Armed Forces, or
    (ii) Any individual employed by the United States Postal Service or 
the Postal Rate Commission; and
    (iii) Any individual employed by a State, political subdivision of 
a State, or an interstate governmental agency, other than such an 
individual--
    (A) Who is not subject to the civil service laws of the State, 
political subdivision, or agency which employs the employee; and
    (B) Who--
    (1) Holds a public elective office of that State, political 
subdivision, or agency,
    (2) Is selected by the holder of such an office to be a member of 
his personal staff,
    (3) Is appointed by such an officeholder to serve on a policymaking 
level,
    (4) Is an immediate adviser to such an officeholder with respect to 
the constitutional or legal powers of the office of such officeholder, 
or
    (5) Is an employee in the legislative branch or legislative body of 
that State, political subdivision, or agency and is not employed by the 
legislative library of such State, political subdivision, or agency.
    Employee employed in an instructional capacity. See Teacher.
    Employer means any person engaged in commerce or in an industry or 
activity affecting commerce who employs 50 or more employees for each 
working day during each of 20 or more calendar workweeks in the current 
or preceding calendar year, and includes--
    (1) Any person who acts, directly or indirectly, in the interest of 
an employer to any of the employees of such employer;
    (2) Any successor in interest of an employer; and
    (3) Any public agency.
    Employment benefits means all benefits provided or made available 
to employees by an employer, including group life insurance, health 
insurance, disability insurance, sick leave, annual leave, educational 
benefits, and pensions, regardless of whether such benefits are 
provided by a practice or written policy of an employer or through an 
``employee benefit plan'' as defined in section 3(3) of the Employee 
Retirement Income Security Act of 1974, 29 U.S.C. 1002(3). The term 
does not include non-employment related obligations paid by employees 
through voluntary deductions such as supplemental insurance coverage. 
(See Sec. 825.209(a)).
    FLSA means the Fair Labor Standards Act (29 U.S.C. 201 et seq.).
    Group health plan means any plan of, or contributed to by, an 
employer (including a self-insured plan) to provide health care 
(directly or otherwise) to the employer's employees, former employees, 
or the families of such employees or former employees. For purposes of 
FMLA the term ``group health plan'' shall not include an insurance 
program providing health coverage under which employees purchase 
individual policies from insurers provided that: [[Page 2268]] 
    (1) No contributions are made by the employer;
    (2) Participation in the program is completely voluntary for 
employees;
    (3) The sole functions of the employer with respect to the program 
are, without endorsing the program, to permit the insurer to publicize 
the program to employees, to collect premiums through payroll 
deductions and to remit them to the insurer;
    (4) The employer receives no consideration in the form of cash or 
otherwise in connection with the program, other than reasonable 
compensation, excluding any profit, for administrative services 
actually rendered in connection with payroll deduction; and,
    (5) the premium charged with respect to such coverage does not 
increase in the event the employment relationship terminates.
    Health care provider means:
    (1) A doctor of medicine or osteopathy who is authorized to 
practice medicine or surgery by the State in which the doctor 
practices; or
    (2) Podiatrists, dentists, clinical psychologists, optometrists, 
and chiropractors (limited to treatment consisting of manual 
manipulation of the spine to correct a subluxation as demonstrated by 
X-ray to exist) authorized to practice in the State and performing 
within the scope of their practice as defined under State law; and
    (3) Nurse practitioners, nurse-midwives and clinical social workers 
who are authorized to practice under State law and who are performing 
within the scope of their practice as defined under State law; and
    (4) Christian Science practitioners listed with the First Church of 
Christ, Scientist in Boston, Massachusetts.
    (5) Any health care provider from whom an employer or a group 
health plan's benefits manager will accept certification of the 
existence of a serious health condition to substantiate a claim for 
benefits.
    (6) A health care provider as defined above who practices in a 
country other than the United States, who is licensed to practice in 
accordance with the laws and regulations of that country.
    ``Incapable of self-care'' means that the individual requires 
active assistance or supervision to provide daily self-care in several 
of the ``activities of daily living'' (ADLs) or ``instrumental 
activities of daily living'' (IADLs). Activities of daily living 
include adaptive activities such as caring appropriately for one's 
grooming and hygiene, bathing, dressing and eating. Instrumental 
activities of daily living include cooking, cleaning, shopping, taking 
public transportation, paying bills, maintaining a residence, using 
telephones and directories, using a post office, etc.
    Instructional employee: See Teacher.
    Intermittent leave means leave taken in separate periods of time 
due to a single illness or injury, rather than for one continuous 
period of time, and may include leave of periods from an hour or more 
to several weeks. Examples of intermittent leave would include leave 
taken on an occasional basis for medical appointments, or leave taken 
several days at a time spread over a period of six months, such as for 
chemotherapy.
    Mental disability: See Physical or mental disability.
    Parent means the biological parent of an employee or an individual 
who stands or stood in loco parentis to an employee when the employee 
was a child.
    Person means an individual, partnership, association, corporation, 
business trust, legal representative, or any organized group of 
persons, and includes a public agency for purposes of this part.
    Physical or mental disability means a physical or mental impairment 
that substantially limits one or more of the major life activities of 
an individual. Regulations at 29 CFR Part 1630.2(h), (i), and (j), 
issued by the Equal Employment Opportunity Commission under the 
Americans with Disabilities Act (ADA), 42 U.S.C. 12101 et seq., define 
these terms.
    Public agency means the government of the United States; the 
government of a State or political subdivision thereof; any agency of 
the United States (including the United States Postal Service and 
Postal Rate Commission), a State, or a political subdivision of a 
State, or any interstate governmental agency. Under section 101(5)(B) 
of the Act, a public agency is considered to be a ``person'' engaged in 
commerce or in an industry or activity affecting commerce within the 
meaning of the Act.
    Reduced leave schedule means a leave schedule that reduces the 
usual number of hours per workweek, or hours per workday, of an 
employee.
    Secretary means the Secretary of Labor or authorized 
representative.
    Serious health condition entitling an employee to FMLA leave means:
    (1) an illness, injury, impairment, or physical or mental condition 
that involves:
    (i) Inpatient care (i.e., an overnight stay) in a hospital, 
hospice, or residential medical care facility, including any period of 
incapacity (for purposes of this section, defined to mean inability to 
work, attend school or perform other regular daily activities due to 
the serious health condition, treatment therefor, or recovery 
therefrom), or any subsequent treatment in connection with such 
inpatient care; or
    (ii) Continuing treatment by a health care provider. A serious 
health condition involving continuing treatment by a health care 
provider includes:
    (A) A period of incapacity (i.e., inability to work, attend school 
or perform other regular daily activities due to the serious health 
condition, treatment therefore, or recovery therefrom) of more than 
three consecutive calendar days, including any subsequent treatment or 
period of incapacity relating to the same condition, that also 
involves:
    (1) Treatment two or more times by a health care provider, by a 
nurse or physician's assistant under direct supervision of a health 
care provider, or by a provider of health care services (e.g., physical 
therapist) under orders of, or on referral by, a health care provider; 
or
    (2) Treatment by a health care provider on at least one occasion 
which results in a regimen of continuing treatment under the 
supervision of the health care provider.
    (B) Any period of incapacity due to pregnancy, or for prenatal 
care.
    (C) Any period of incapacity or treatment for such incapacity due 
to a chronic serious health condition. A chronic serious health 
condition is one which:
    (1) Requires periodic visits for treatment by a health care 
provider, or by a nurse or physician's assistant under direct 
supervision of a health care provider;
    (2) Continues over an extended period of time (including recurring 
episodes of a single underlying condition); and
    (3) May cause episodic rather than a continuing period of 
incapacity (e.g., asthma, diabetes, epilepsy, etc.).
    (D) A period of incapacity which is permanent or long-term due to a 
condition for which treatment may not be effective. The employee or 
family member must be under the continuing supervision of, but need not 
be receiving active treatment by, a health care provider. Examples 
include Alzheimer's, a severe stroke, or the terminal stages of a 
disease.
    (E) Any period of absence to receive multiple treatments (including 
any period of recovery therefrom) by a health care provider or by a 
provider of health care services under orders of, or on referral by, a 
health care provider, [[Page 2269]] either for restorative surgery 
after an accident or other injury, or for a condition that would likely 
result in a period of incapacity of more than three consecutive 
calendar days in the absence of medical intervention or treatment, such 
as cancer (chemotherapy, radiation, etc.), severe arthritis (physical 
therapy), kidney disease (dialysis).
    (2) Treatment for purposes of paragraph (1) of this definition 
includes (but is not limited to) examinations to determine if a serious 
health condition exists and evaluations of the condition. Treatment 
does not include routine physical examinations, eye examinations, or 
dental examinations. Under paragraph (1)(ii)(A)(2) of this definition, 
a regimen of continuing treatment includes, for example, a course of 
prescription medication (e.g., an antibiotic) or therapy requiring 
special equipment to resolve or alleviate the health condition (e.g., 
oxygen). A regimen of continuing treatment that includes the taking of 
over-the-counter medications such as aspirin, antihistamines, or 
salves; or bed-rest, drinking fluids, exercise, and other similar 
activities that can be initiated without a visit to a health care 
provider, is not, by itself, sufficient to constitute a regimen of 
continuing treatment for purposes of FMLA leave.
    (3) Conditions for which cosmetic treatments are administered (such 
as most treatments for acne or plastic surgery) are not ``serious 
health conditions'' unless inpatient hospital care is required or 
unless complications develop. Ordinarily, unless complications arise, 
the common cold, the flu, ear aches, upset stomach, ulcers, headaches 
other than migraine, routine dental or orthodontia problems, 
periodontal disease, etc., are examples of conditions that do not meet 
the definition of a serious health condition and do not qualify for 
FMLA leave. Restorative dental or plastic surgery after an injury or 
removal of cancerous growths are serious health conditions provided all 
the other conditions of this regulation are met. Mental illness 
resulting from stress or allergies may be serious health conditions, 
but only if all the conditions of this section are met.
    (4) Substance abuse may be a serious health condition if the 
conditions of this section are met. However, FMLA leave may only be 
taken for treatment for substance abuse by a health care provider or by 
a provider of health care services on referral by a health care 
provider. On the other hand, absence because of the employee's use of 
the substance, rather than for treatment, does not qualify for FMLA 
leave.
    (5) Absences attributable to incapacity under paragraphs (1)(ii) 
(B) or (C) of this definition qualify for FMLA leave even though the 
employee or the immediate family member does not receive treatment from 
a health care provider during the absence, and even if the absence does 
not last more than three days. For example, an employee with asthma may 
be unable to report for work due to the onset of an asthma attack or 
because the employee's health care provider has advised the employee to 
stay home when the pollen count exceeds a certain level. An employee 
who is pregnant may be unable to report to work because of severe 
morning sickness.
    Son or daughter means a biological, adopted, or foster child, a 
stepchild, a legal ward, or a child of a person standing in loco 
parentis, who is under 18 years of age or 18 years of age or older and 
incapable of self-care because of a mental or physical disability.
    Spouse means a husband or wife as defined or recognized under State 
law for purposes of marriage in the State where the employee resides, 
including common law marriage in States where it is recognized.
    State means any State of the United States or the District of 
Columbia or any Territory or possession of the United States.
    Teacher (or employee employed in an instructional capacity, or 
instructional employee) means an employee employed principally in an 
instructional capacity by an educational agency or school whose 
principal function is to teach and instruct students in a class, a 
small group, or an individual setting, and includes athletic coaches, 
driving instructors, and special education assistants such as signers 
for the hearing impaired. The term does not include teacher assistants 
or aides who do not have as their principal function actual teaching or 
instructing, nor auxiliary personnel such as counselors, psychologists, 
curriculum specialists, cafeteria workers, maintenance workers, bus 
drivers, or other primarily noninstructional employees.

Appendix A to Part 825--Index

     The citations listed in this Appendix are to sections in 29 CFR 
Part 825.

1,250 hours of service 825.110, 825.800
12 workweeks of leave 825.200, 825.202, 825.205
12-month period 825.110, 825.200, 825.201, 825.202, 825.500, 825.800
20 or more calendar workweeks 825.104(a), 825.105, 825.108(d), 
825.800
50 or more employees 825.102, 825.105, 825.106(f), 825.108(d), 
825.109(e), 825.111(d), 825.600(b)
 75 miles of worksite/radius 825.108(d), 825.109(e), 825.110, 
825.111, 825.202(b), 825.213(a), 825.217, 825.600(b), 825.800
Academic term 825.600(c), 825.602, 825.603, 825.701(a)
Adoption 825.100(a), 825.101(a), 825.112, 825.200(a), 825.201, 
825.202(a), 825.203, 825.207(b), 825.302, 825.304(c)
Alternative position 825.117, 825.204, 825.601
Americans with Disabilities Act 825.113(c), 825.115, 825.204(b), 
825.215(b), 825.310(b), 825.702(b), 825.800 as soon as practicable 
825.219(a), 825.302, 825.303
Birth/birth of a child 825.100(a), 825.101(a), 825.103(c), 825.112, 
825.200(a), 825.201, 825.202, 825.203, 825.207, 825.209(d), 
825.302(a), 825.302(c)
Certification requirements 825.207(g), 825.305, 825.306, 825.310, 
825.311
Christian science practitioners 825.118(b), 825.800
COBRA 825.209(f), 825.210(c), 825.213(d), 825.309(b), 825.700(a), 
825.800
Collective bargaining agreements 825.102(a), 825.211(a), 825.604, 
825.700
Commerce 825.104, 825.800
Complaint 825.220, 825.400, 825.401, 825.500(a)
Continuing treatment by a health care provider 825.114, 825.800
Definitions 825.800
Designate paid leave as FMLA 825.208
Disability insurance 825.213(f), 825.215(d)
Discharging 825.106(f), 825.220
Discriminating 825.106(f), 825.220
Educational institutions 825.111(c), 825.600
Effective date 825.102, 825.103, 825.110(e), 825.700(c)
Eligible employee 825.100, 825.110, 825.111, 825.112, 825.200, 
825.202, 825.206(b), 825.207, 825.216(c), 825.217, 825.312, 
825.600(b), 825.601, 825.800
Employer 825.104, 825.105, 825.106, 825.107, 825.108, 825.109, 
825.111, 825.800
Enforcement 825.400-825.404
Equivalent benefits 825.213(f), 825.214, 825.215(d)
Equivalent pay 825.100(c), 825.117, 825.204(c), 825.215, 825.601(a), 
825.702(c)
Eequivalent position 825.100(c), 825.214, 825.215, 825.218(b), 
825.604, 825.702(c)
Farm Credit Administration 825.109(b)
Fitness for duty 825.216(c), 825.310, 825.702(e)
Foster care 825.100(a), 825.112, 825.200(a), 825.201, 825.202(a), 
825.203(a), 825.207(b), 825.302(a)
Government Printing Office 825.109(d)
Group health plan 825.209, 825.213, 825.800
Health benefits 825.100(b), 825.106(e), 825.209, 825.210, 825.211, 
825.212, 825.215(d), 825.219, 825.220(c), 825.301(c), 825.309, 
825.312, 825.603, 825.700, 825.702(c)
Health care provider 825.100(d), 825.114, 825.115, 825.118, 825.302, 
825.305, 825.306, 825.307, 825.310(a), 825.800
Health plan premiums 825.210, 825.213(a)
Husband and wife 825.202
In loco parentis 825.113, 825.800
Incapable of self-care 825.113(c), 825.800 [[Page 2270]] 
Industry affecting commerce 825.104, 825.800
Instructional employee 825.601, 825.602, 825.604, 825.701(f), 
825.800
Integrated employer 825.104(c)
Intermittent leave 825.116(c), 825.117, 825.203, 825.302(f), 
825.600(c), 825.601, 825.800
Joint employment 825.104(c), 825.105, 825.106
Key employee 825.209(g), 825.213(a), 825.217, 825.218, 825.219, 
825.301(c), 825.312(f)
Library of Congress 825.109(b), 825.800
Life insurance 825.213(f), 825.215(d), 825.800
Maintain health benefits 825.209, 825.212, 825.215(d), 825.301(c), 
825.309, 825.603
Medical certification 825.116, 825.213(a), 825.301(c), 825.302(c), 
825.305, 825.306, 825.307, 825.308, 825.310, 825.311, 825.312(b), 
825.701(d)
Medical necessity 825.114(d), 825.117, 825.306(d)
Multi-employer health plans 825.211
Needed to care for 825.100(a), 825.114(d), 825.116, 825.207(c)
Not foreseeable 825.303, 825.311(b)
Notice 825.100(d), 825.103(b), 825.110(d), 825.200(d), 825.207(g), 
825.208(a), 825.208(c), 825.209(d), 825.210(e), 825.219(a), 
825.219(b), 825.220(c), 825.300, 825.301(c), 825.302, 825.303, 
825.304, 825.309, 825.310(c), 825.310(d), 825.312(a), 825.402, 
825.403(b), 825.601(b), 825.701(a)
Notice requirements 825.110(d), 825.301(c), 825.302(g), 825.304(a), 
825.304(e), 825.601(b)
Paid leave 825.100(a), 825.207, 825.208, 825.210, 825.213(c), 
825.217(c), 825.219(c), 825.301(c), 825.304(d), 825.700(a), 
825.701(a)
Parent 825.100(a), 825.101(a), 825.112, 825.113, 825.116(a), 
825.200(a), 825.202(a), 825.207(b), 825.213(a), 825.305(a), 
825.306(d), 825.800
Physical or mental disability 825.113(c), 825.114, 825.215(b), 
825.500(e), 825.800
Placement of a child 825.100(a), 825.201, 825.203(a), 825.207(b)
Postal Rate Commission 825.109(b), 825.800
Posting requirement 825.300, 825.402
Premium payments 825.100(b), 825.210, 825.212, 825.213(f), 
825.301(c), 825.308(d), 825.500(c)
Private employer 825.105, 825.108(b)
Public agency 825.104(a), 825.108, 825.109, 825.800
Recertification 825.301(c), 825.308
Records 825.110(c), 825.206(a), 825.500
Reduced leave schedule 825.111(d), 825.114(d), 825.116(c), 825.117, 
825.203, 825.205, 825.302(f), 825.306(d), 825.500(c), 825.601, 
825.702(c), 825.800
Restoration 825.100(d), 825.106(e), 825.209(g), 825.213(a), 825.216, 
825.218, 825.219, 825.301(c), 825.311(c), 825.312
Returning to work 825.214
Right to reinstatement 825.100(c), 825.209(g), 825.214(b), 
825.216(a), 825.219, 825.301(c), 825.311(c), 825.312, 825.400, 
825.700
Secondary employer 825.106(f)
Serious health condition 825.100, 825.101(a), 825.112(a), 825.114, 
825.116(a), 825.200(a), 825.202(a), 825.203, 825.204(a), 825.206(b), 
825.207, 825.213, 825.215(b), 825.301(c), 825.302, 825.303, 825.305, 
825.306, 825.308(d), 825.310(a), 825.311(c), 825.312(b), 825.601(a), 
825.602(a), 825.800
Son or daughter 825.112(a), 825.113(c), 825.202(a), 825.800
Spouse 825.100(a), 825.101(a), 825.112(a), 825.113(a), 825.200(a), 
825.202, 825.213(a), 825.303(b), 825.305(a), 825.306(d), 825.701(a), 
825.800
State laws 825.701
Substantial and grievous economic injury 825.213(a), 825.216(c), 
825.218, 825.219, 825.312(f)
Successor in interest 825.104(a), 825.107, 825.800
Teacher(s) 825.110(c), 825.600(c), 825.800
U.S. Tax Court 825.109(b)
Unpaid leave 825.100, 825.101(a), 825.105(b), 825.206, 825.208, 
825.601(b)
Waive rights 825.220(d)
Workers' compensation 825.207(d)(1), 825.210(f), 825.216(d), 
825.307(a)(1), 825.720(d)(1)
Worksite 825.108(d), 825.110(a), 825.111, 825.213(a), 825.214(e), 
825.217, 825.220(b), 825.304(c), 825.800

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Appendix B to Part 825--Certification of Physician or Practitioner 
(Optional Form WH-380)

      
      
      
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Appendix C to Part 825--Notice to Employees of Rights under FMLA 
(WH Publication 1420)

      
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Appendix D to Part 825--Prototype Notice: Employer Response to 
Employee Request for Family and Medical Leave (Form WH-381)

      
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Appendix E to Part 825--IRS Notice Discussing Relationship Between 
FMLA and COBRA

      
      
      
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[FR Doc. 94-32342 Filed 12-30-94; 3:44 pm]
BILLING CODE 4510-27-P