labor lawAdivision of labor law center

The National Defense Authorization Act of 2008 went into effect immediately. Under this act family members of soldiers are eligible to take expanded FMLA (Family Medical and Leave Act) leave for up to 26 weeks.

The law provides parents, spouses, sons and daughters of injured soldiers to take the expanded FMLA leave to care for wounded active military and deployed National Guard and Reserve personnel. Aunts, uncles and cousins, as “next of kin” may also be allowed expanded FMLA in some cases.

The new law not only expands the traditional FMLA from 12 weeks to 26 weeks, but also expands how the leave can be charged. Spouses, parents, sons and daughters can also take expanded FMLA to stand in for a family member when he or she goes on active duty, or is informed of imminent deployment. This provision not only allows the family member to care for any ill person under that soldier’s charge, but also to care for healthy children.

The U. S. Department of Labor is working to finalize the regulations of the expanded FMLA, and will publish the results when complete. The process, however, may take several weeks, so in the interim, the Labor Department expects employers to comply with the new leave policy to the best of their ability.

The interim regulations do allow employers to count any paid leave to the 26 weeks of unpaid FMLA, but only if the employee is informed in advance.

A bill with a similar provision for expanded FMLA was vetoed on December 28, 2008 by President George W. Bush. His veto of the bill, however, was not related to the expanded leave. Instead, President Bush stated the bill was vetoed because he believed it would “risk imposing financially devastating hardship on Iraq that will unacceptably interfere with the political and economic progress everyone agrees is critically important to bringing our troops home.”

That statement opened the door to allow the expanded FMLA to be attached to another bill, and to gain its recent passage.

The recent passage of the National Defense Authorization Act of 2008 (NDAA) expands the parameters of the Family Medical and Leave Act (FMLA), enacted in 1993.

The NDAA of 2008 is the first major expansion of the FMLA since it was originally enacted. At that time, no law existed that guaranteed leave for an employee to deal with serious health issues. Companies viewed the requests for leave due to medical reasons on a case by case basis, according to individual company policy. Often if an employee missed more than a couple of weeks because of major surgery, or recovering from a heart attack, that employee got fired.

The effect of the FMLA was groundbreaking. For the first time a federal law required companies to grant unpaid, job-protected leave for a worker facing serious health issues. The worker could use up to 12 weeks of leave to care for his or her illness, or for those of a parent, a spouse, or a child. In addition, FMLA allowed leave for childbirth, for the adoption of a child, and for newly fostering a child under the age of 18.

When the employee returned to work, he or she still had a job. Usually, the worker is given the same job. If the same job isn’t available, though, the company must provide the worker with a position with comparable benefits, pay and working conditions.

Currently no federal or state law exists requiring this leave to be paid. Some companies can count paid leave such as sick leave toward the 12 weeks of FMLA, but only if the employee is informed–in writing–prior to take leave.

Several states have enacted laws to expand their FMLA. Mississippi amended the definition of family member to include in-laws and grandparents. Other states increased benefits and/or extended the amount of leave available beyond 12 weeks.

How the new NDAA 2008 will affect any of the existing rules isn’t’ clear, yet. The U. S. Department of Labor is currently scrambling to define the regulations. Once those are spelled out, the Labor Department will publish the results.

The U.S. Department of Labor recently announced two actions to recover benefits for workers in Mississippi and California, under federal law.

Most employees never think twice about employee benefit plans, but they should. In 2006, the U.S. Department of Labor recovered more than $2.6 billion in employee benefit funds that had been misappropriated by employers. These included funds for employee pension plans, healthcare funds and profit-sharing accounts.

In the most recent case, the DOL recovered $3.5 million in five union employee pension funds that had been misappropriated by the plan trustees. The retirement, health, scholarship, apprenticeship, and vacation and holiday funds cover more than 2,000 participants employed throughout northern California.

The settlement also orders the sale of the Konocti Harbor Resort and Spa on Clear Lake. The Kelseyville, California resort hotel was apparently renovated and operated with funds diverted from the union pension plans.  The DOL charges that the union “imprudently spent millions” to build and maintain facilities at Konocti, despite the resort’s continued losses. In addition, the union profited from the interest of a $6 million loan that it made to itself.

“Workers’ retirement dreams, health and other benefits were jeopardized by the gross mismanagement of their benefit plans,” said Secretary of Labor Elaine L. Chao. “This legal action puts the benefit plans under new, independent management and restores at least $3.5 million to the pension plan.”

The plan administrators were removed from five employee benefit plans sponsored by Local 38 of the United Association of Plumbers, Pipefitters and Journeymen of San Francisco. The trustees were permanently barred from serving as fiduciaries or service providers on any employee benefit account, ever again.

 The suit filed by the DOL alleges violations of the Employee Retirement Income Security Act (ERISA) by current and former trustees. The trustees include Lawrence J. Mazzola, Sr., the business manager and financial secretary-treasurer of Local 38. Other trustees who were removed include, William Fazande, Larry Lee, James Shugrue, Bohon Kazarian, Tom Irvine, Robert E. Buckley, Art Rud, Ron Fahy, and Robert Nurisso.  Frank Sullivan, plan administrator, was also banned for life from controlling any more employee benefit accounts.

In a surprise move, the court retained Lawrence J. Mazzola Jr. and Robert E. Buckley Jr., two trustees who have been on the board for less time.

Under the settlement, a court-appointed independent administrator will oversee the union employee benefit plans and implement financial controls to prevent future misuse of the assets. A second court-appointed trustee has independent and exclusive authority over the resort sale and, until it is sold, management and operation of the property.

In the future, all assets of the pension plan must be managed by professional investment managers under the oversight of an investment monitor.

In a second case, the DOL obtained a settlement requiring the Mississippi State Medical Association, or MSMA of Ridgeland, Mississippi, to reimburse participants and beneficiaries for unpaid health claims. The claims resulted from the termination of the MSMA Benefit Plan and Trust.

Ironically, MSMA was established in the 1980s to provide healthcare for physicians, their employees and families. Prior to its collapse in January 2004, the plan had more than 1,800 participants.

“The mismanagement of this benefits plan left workers and their families on the hook for unpaid medical bills,” said U.S. Secretary of Labor Elaine L. Chao. “The department’s legal action will ensure that the plan sponsor meets its responsibility by paying the medical bills of these workers and their families.”

The judgment appoints Receivership Management Inc. as an independent fiduciary to manage the distribution of plan assets. The judgment also removes MSMA as a fiduciary to the health plan and protects participants from creditors’ claims by medical providers. Finally, MSMA is enjoined from providing health, disability or other welfare benefits through any self-funded arrangement in the future and may be liable for a civil penalty.

The Labor Department’s lawsuit alleged that MSMA knew the plan was under funded, did not take steps to remedy the situation and failed to inform participants of the unsound financial condition. As a result, the plan had more than $5 million in outstanding claims when it was terminated.

The Mississippi FMLA is there for the times when family lives are under stress – either good stress or bad – and need full attention. It provides up to 12 weeks of unpaid leave for circumstances like:

• The birth or adoption of a child.
• Bringing a foster child into your home.
• When a member of your immediate family has a serious health problem.

When the stresses of family life become overwhelming, you may need to take some time off to focus on the situation at home. Whether it’s the good news of a newborn, or the difficult news of a serious illness in the family, it may require some extended time off. There is a program available to protect your job if that happens.

All private employers with 50 or more workers must abide by the Mississippi FMLA law. Public employees and schoolteachers are covered despite staff size.

Unpaid leave raises complications around medical coverage. Normally, your workplace coverage would be paid for by payroll deductions. But when you’re on unpaid leave, where does that premium money come from? The answer is, your employer is likely to consider it an advance on a future paycheck. When you return, you’ll find the cost of your medical coverage premium appearing as a deduction from your wages. You and your employer should sit down and sign an agreement to avoid misunderstandings that could arise as a result of this legal issue.

The Mississippi FMLA poster needs to be displayed at all jobsites throughout the state.

There are some responsibilities that must be fulfilled by you or your employer if you’re using, or plan to make use of, the FMLA. For example, your employer should provide immediate notice in writing to you explaining the status of your leave and letting you know how and when to keep in touch with your place of business in so you can be certain of maintaining your position. In turn, you’re obliged to respond to those written instructions to stay in good stead with your employer. 

If you are a worker covered by a group health insurance plan, and suffer from some kind of mental illness, then you no longer have to suffer in silence due to lack of funds.

There are over 150 million workers in the United States who are covered by group health insurance plans who will be pleased to learn of the Mental Parity Health Act and what it means to them.

This affects many workers, including those covered by Mississippi employee benefit plans.

The Mental Health Parity Act, or MHPA was signed into law by the president, and has been extended through December 31, 2007. It has taken 5 amendments to extend the expiration date of the original Mental Health Parity Act from September 31, 2001.

But what does the Mental Health Parity Act mean to workers?

Well, if you are covered by any group health insurance plan, it means that the plan must cover mental illness in the same way that it covers other medical conditions and treatments.

This means that whereas in the past there was often a huge discrepancy between the monetary limit on mental health conditions and other medical conditions, including surgery, this is no longer legal.

The discrepancy has been, in the past, $90,000 or more, with some plans setting limits for medical treatments at $100,000 or more and limits for mental health related treatments at $5,000 to $10,000 or even lower.

It is now illegal for group health insurance plans to do this.

Workers who need treatment for mental health related conditions can use cover for a diverse range of treatments. These may include a visit to any licensed therapist, drug and alcohol rehab for dependency and stays in the mental health wing of a hospital.

You may have to stay in hospital for a length of time for depression, schizophrenia or other mental health conditions. This can also include post-traumatic stress disorder.

New employers in the state of Mississippi, you most likely will have to participate in that state’s unemployment insurance system too. The way it works with the Mississippi Department of Employment Security, or the MDES, is that new employers are liable to pay unemployment insurance if they match the proper employer status, if they have bought or acquired another company that was already liable for unemployment insurance taxes, or if they voluntarily decide to be liable for the taxes.

What I meant before when I said that a new employer could be liable if “they match the proper employer status” was that liability for unemployment insurance tax is determined by how much you are paying out to your employees, and what type of employees they are. For instance, even for domestic workers—such as nannies, baby sitters, house cleaners—you could be considered a liable employer if you pay them more than $1000 in a quarter.

When it comes to agricultural companies, you could be a liable employer if you pay more than $20,000 in wages in a calendar quarter or have 10 or more workers on your pay roll in some portion of a day during 20 different weeks in the year. Nonprofits even have to pay unemployment insurance taxes if they have more than four workers employed on some portion of a day in 20 or more different weeks out of the year.

For your standard for-profit business, which I am suspecting most of you are, the liability levels come at the payment of more than $1500 of wages in a quarter, or one worker employed during the course of a day in at least 20 weeks out of the year.

Just registering with the Mississippi Department of Employment Security to determine your level of liability for unemployment insurance taxes is just one of the steps that a new employer must do in the state. Don’t forget that you also need a unemployment insurance benefits poster for each and every one of your work sites.