Author: Jennifer Frank

On March 14, 2019, the United States Department of Labor (“DOL”) issued an opinion letter (FMLA2019-1-A) after being asked “whether an employer may delay designating paid leave as Family and Medical Leave Act (FMLA) leave or permit employees to expand their FMLA leave beyond the statutory 12-week entitlement.” On the first question, whether an employer may delay designation of FMLA leave, the DOL was of the opinion that an employer may not do so. As to the second question, whether an employer may expand FMLA leave beyond the statutory 12-week entitlement, the DOL was similarly of the opinion that an employer may not do so.

The Question to the DOL

In being asked to issue the opinion, the inquiring party represented to the DOL that some employers “voluntarily permit employees to exhaust some or all of the available paid sick (or other) leave prior to designating leave as FMLA-qualifying, even when the leave is clearly FMLA-qualifying.” The inquiring party represented that employers may be relying on 29 C.F.R. § 825.700, which states in relevant part that “an employer must observe any employee benefit or program that provides greater family and medical leave rights to employees than the rights provided by the FMLA.”

For obvious reasons, it makes sense that an employer would occasionally be approached by an employee who knows that they will need more than 12 weeks of total leave to attend to his or her serious health condition or that of their family member. Other employees may even have offered to donate leave time to this employee in order to allow him or her to take additional time off of work. And, some employers have policies or practices that go above and beyond the FMLA in order to assist employees dealing with difficult medical situations.

The Legal Issues

Under the FMLA, employees of covered employers (those employers employing 50 or more employees within 75 miles of an employee’s workplace) are eligible to take up to 12 weeks of unpaid leave per year for specified medical reasons for themselves or their qualified family members. An employer may require the employee (or the employee may elect) to “substitute” accrued paid leave to cover part of the unpaid FMLA entitlement period, in order to be compensated for that portion of the unpaid FMLA leave. In any event, the employer must properly designate FMLA time as such.

In order to designate FMLA time as FMLA time, an employer must give notice of the FMLA designation to the employee under 29 C.F.R. § 825.300(d)(1). This Designation Notice is required within five business days after the employer “has enough information to determine whether the leave is being taken for a FMLA-qualifying reason.” Importantly, under the regulations, failure to provide the required notice may constitute an interference with, restraint of, or denial of the employee’s FMLA rights.

Under 29 C.F.R. § 825.700, nothing prevents employers from adopting leave policies more generous than the floor of the FMLA. Further, for those small businesses that are not covered by the FMLA, there is nothing preventing employers from being more generous than the FMLA. That being said, an employer may not designate more than 12 weeks of leave as FMLA-protected.

The Opinion

As an initial matter, the DOL noted that an employer is prohibited from delaying designation of FMLA-qualifying leave as such. This is because once an employee communicates a need to take leave for an FMLA-qualifying reason, neither the employee nor the employer may decline FMLA protection for that leave. Even if the employee never specifically states that the leave is under the FMLA, if the employer is qualified—again, generally more than 50 employees in that geographic area—and the employer has knowledge of facts that indicates the leave is FMLA-qualifying, the employer must provide notice of FMLA designation to the employee within five business days.

Thus, even if the employee asks the employer to wait to start the clock under the FMLA, the employer is not allowed to do so. Once the employer knows that the leave will be FMLA-qualifying, the employer must designate the leave as FMLA leave.

As to the question of whether an employer may provide more than 12 weeks of FMLA leave, the DOL noted that aside from the military caregiver leave exception (which provides 26 weeks of FMLA leave), the FMLA provides for 12 weeks of unpaid leave. Employers are not prohibited from being more generous with their employees than required by the FMLA. However, being more generous does not make the additional leave covered by the FMLA or subject to the protections provided for therein. While the employer may continue to provide unpaid leave after the 12 weeks of FMLA leave have been exhausted, that leave is not deemed “FMLA leave” in the strict sense of FMLA entitlement.

Practical Application

For many South Dakota small businesses, the FMLA does not apply because there are simply not enough employees for the FMLA to be applicable. For those employers that are covered by the FMLA, according to the DOL, once an employee’s leave is FMLA-qualifying, it must be so designated. The opinion letter clearly leaves no wiggle room for an employer to avoid application of the FMLA, even if the employee prefers to delay or decline FMLA-leave designation. It is still acceptable for employers to be generous and to offer any additional leave beyond what the FMLA provides (such as non-FMLA medical leave), although such additional leave will not be considered actual FMLA leave. In addition, paid leave can be used to provide compensation during an otherwise unpaid FMLA leave (such as short-term disability), but such paid leave will run concurrently with the FMLA leave.

Keep in mind that DOL Opinion Letters do not have the same force and effect of law the way that a statute, regulation or court decision does. However, courts do turn to administrative agencies for help and guidance in interpreting the law. Therefore, South Dakota employers who are subject to compliance with the FMLA are well-advised to follow the guidance in this DOL opinion letter. Practical tips include training managers and supervisors on the FMLA rules, particularly since individual liability for violations exists. Also, employers need to ensure that their policies and procedures are up-to-date, consistent and regularly followed. In this way, South Dakota employers will be ensuring legal compliance, as well as fair treatment of all their employees.

On March 7, 2019, the U.S. Department of Labor (DOL) announced a Notice of Proposed Rulemaking to raise the minimum salary threshold for exempt employees to $35,308 annually ($679 per week), which is up from the 2004 standard currently in place of $23,660 annually ($455 per week). Exempt categories such as administrative, executive, professional, and outside sales and computer employees are often referred to as “white collar” exemptions. Employees in exempt categories must meet not only the minimum salary requirement, but must also be paid on a salary basis and meet the standard duties test of the applicable exemption. There have been no changes under the proposed rule to the “standard duties” test under the exemptions.

The DOL’s proposed rule will be subject to a 60-day public comment period before it eventually could make its way into a final form. It is expected that the final rule would become effective some time in early 2020.

The proposed rule raises the highly-compensated employee (HCE) exemption from $100,000 under the current rule to $147,414 per year, of which $679 must be paid weekly on a salary or fee basis. Under the proposed rule, employers would not be able to count non-discretionary bonuses in order to meet the required weekly salary requirement for HCEs.

In addition, the proposed rule would allow employers to count certain bonuses, incentive payments, and commissions paid on an annual or more frequent basis to be used to satisfy up to 10 percent (10%) of the employee’s overall salary to meet the new salary threshold of $35,308.

Employer Takeaway: While this proposed rule is not yet final, employers should begin taking steps in anticipation of the rule becoming effective at some point in the next year. For example, employers should review the salary ranges for exempt employees currently in place at their businesses, and consider adjusting salaries upwards if necessary to meet the new standard, or re-classify the worker as non-exempt and paid on an hourly basis if that becomes necessary. With careful planning, employers will be well-prepared for compliance should the change in the overtime rule become effective.

By now, everyone is aware of the #MeToo movement, which began in October 2017 as a backlash against sexual harassment and sexual assault in Hollywood and the entertainment industry. The Equal Employment Opportunity Commission (EEOC), created as part of the Civil Rights Act of 1964, is the federal agency responsible for interpreting and enforcing federal laws prohibiting employment discrimination. In the last 50 years, the EEOC has undertaken substantial efforts to bring attention to, and remediate, workplace discrimination and harassment. In addition to handling administrative charges of discrimination, the EEOC offers a host of resources to employers and small businesses, including workplace training through its Training Institute and low-cost (or no-cost) education and outreach programs.

In June of 2016, after an 18-month study, the EEOC Select Task Force on Sexual Harassment in the Workplace reported that workplace harassment “remains a persistent problem” and frequently goes unreported. The Task Force recommended a change in training, noting that “even effective training cannot occur in a vacuum – it must be part of a holistic culture of non-harassment that starts at the top.” In response to this report, the EEOC “ramped up its efforts” related to workplace harassment, which culminated in the release of an innovative new training program in the fall of 2017, just as #MeToo was gaining ground. The new program, “Respectful Workplaces,” teaches skills for employees and supervisors to promote and contribute to respect in the workplace.

A few months ago, the EEOC released preliminary FY 2018 sexual harassment data, which showed an increase in charges and in EEOC activity. The following are just a few examples of the increased activity:
Charges filed with the EEOC alleging sexual harassment increased by more than 12% from FY 2017 – this is the highest level of sexual harassment claims since FY 2012;
The EEOC filed 66 harassment lawsuits, 41 of which included allegations of sexual harassment. This shows a 50% increase in suits alleging sexual harassment over FY 2017;
Overall, the EEOC recovered almost $70 million for the victims of sexual harassment through litigation and enforcement, up from $47.5 million in FY 2017; and
Hits on the EEOC’s sexual harassment page of the Agency’s website more than doubled in the past year.

Practitioners representing employers have the opportunity to help organizations ensure compliance through well-drafted policies, improve workplace culture, and promote awareness of potentially problematic circumstances or behaviors. This can be done through proactive training, ongoing advice and counsel at early stages of an emerging problem, advising the client to provide multiple reporting procedures in the case of a complaint, and having an open-door policy where all employees feel supported in bringing their concerns forward. Employers who take proactive steps with the assistance of counsel are much less likely to have the EEOC knocking at their proverbial door.

Just announced, the new South Dakota Minimum Wage for 2019 is increasing 25 cents per hour. The new rate of $9.10 per hour is up from $8.85 in 2018. The new rate becomes effective on January 1, 2019.

South Dakota’s minimum wage is adjusted on an annual basis, increasing at the same rate as the cost of living as measured in the Consumer Price Index published by the United States Department of Labor. The amount of the increase will be rounded to the nearest five cents. The state minimum wage cannot decrease.

There is no state statute that requires a poster to be displayed regarding minimum wage. However, South Dakota’s State Department of Labor provides one as a courtesy to employers, and many employers do post this in their workplace at a location where employees can see it and other postings are made. See the link below.

South Dakota Minimum Wage Poster