Family Leave: We’re a Small Company—Are We Covered by FMLA?

We are a small California business with 14 employees. We are not supposed to be subject to FMLA, but our lawyer says we are. This is because we have FMLA eligibility information included in our handbook. But the eligibility clause clearly states that “employees who work at a location where the Company employs fewer than 50 persons within a 75 mile radius are not eligible.” We have never had more than 14 employees in our 5-year history. Are we really subject to FMLA? —Masako

Our HR Management & Compliance Report: How To Comply with California and Federal Leave Laws, covers everything you need to know to stay in compliance with both state and federal law in one of the trickiest areas of compliance for even the most experienced HR professional. Learn the rules for pregnancy and parental leaves, medical exams and certifications, intermittent leaves, required notices, and more.

Our editors looked into this one.

FMLA—the federal Family and Medical Leave Act—covers “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.” Thus, an employer that has had no more than 14 employees at any time probably would not be covered by the FMLA.

But there are several caveats to this that may or may not apply in your situation:

1. An employer can be an “integrated employer” or a “joint employer” with another company (such as a corporation that has an ownership interest in another corporation). If that is the case, the employees of both companies would be counted together to determine whether either company meets the threshold for FMLA coverage. Detailed information for determining whether a company is an integrated or joint employer is at the DOL website.
2. If an employer promises FMLA-like rights to its employees via an employee handbook, that could create a contractual obligation on the part of the employer to actually provide such leave, even if FMLA does not apply. However, whether a contract is created would depend on the terms of the particular employee handbook. Employers should be very careful when drafting handbooks to include leave (or other) rights only when the employer is legally bound to provide such leave or has undertaken a careful consideration of whether it wants to create such leave rights when it isn’t already legally bound to do so.