Leave Management, Policy, and Compliance

Ask the Expert: A few years ago, we hired our 50th employee and updated the handbook to include FMLA. We just went down to 49 employees. Do we update the handbook again?

December 17, 2010

Determining whether an employer has 50 employees for purposes of the FMLA can be complex. As you are aware, under the FMLA regulations, 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 (29 C.F.R. 825.14). Based on this definition, the company cannot just look at the number of employees on the day leave is requested or commenced.

Also, 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.

The definition of “employ” for purposes of FMLA is taken from the Fair Labor Standards Act, Sec. 3(g), 29 U.S.C. 203(g). In general, the test of whether an individual is counted as an “employee” depends on whether there is a continuing employment relationship and whether the employee is being maintained on the payroll. Consider the following factors:

  • Employees on the payroll are assumed to be employed each working day of the calendar week. This means that an employee listed on the payroll who has not received any compensation for a calendar week still is counted for purposes of determining the 50-employee threshold.
  • Employees on paid or unpaid leave, such as a disciplinary suspension, a leave of absence, or a FMLA leave, are counted as long as the employer reasonably expects the person to return to work.
  • Part-time, seasonal, and temporary employees are counted as working for the entire week during any week in which they appear on the payroll.
  • Employees who are disabled and unable to work are counted only if there is a reasonable expectation that the employee later will return to work.
  • 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.
  • >Employees on temporary or permanent layoff status are not maintained on the payroll and are not counted.
  • Special workers, such as volunteer workers, are not employees for the purpose of counting the number of employees to meet the 50-employee minimum employee count or for the purpose of taking leave.
  • Independent contractors are not employees.

Based on the above analysis, your organization may still be covered by the FMLA. If it is not, and it does not intend to provide FMLA benefits, the employer should update its handbook so that employees are not under the impression that they are entitled to FMLA leave. Of course, the company could voluntarily undertake family and medical leave obligations, even if it is not required to do so. In that case, may not be necessary to update the handbook.