Is a contractor who is later hired as a full time employee eligible for FMLA?
Thank you for your inquiry regarding FMLA eligibility for a person who worked on a contract basis for two months prior to beginning full time employment.
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As you are aware, one of the requirements for FMLA eligibility is that the employee has been employed for at least 1,250 hours of service during the 12-month period immediately preceding the commencement of the leave.
The question then is whether the hours the employee worked as a “contractor” count toward this 1,250 hour service requirement.
The FMLA regulations ( CFR 825.110 (c)(1)) help us out here by providing that “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. 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.”
Therefore, we must decide whether the worker would have been considered, for FLSA purposes, an employee or an independent contractor during the months of July and August. If he or she was an employee, then the hours count toward FMLA eligibility. If he or she was not an employee, then the hours do not count. This test is a fact-specific analysis that must be done on a case-by-case basis for each employee, so you will need to consider the specific role this worker held during the months of July and August and whether that work was done on an “employee” basis or an “independent contractor” basis.
The good news here is that the DOL Administrator has recently issued guidance on independent contractor vs. employee classification under the FLSA. However, the bad news is that this guidance points out that most workers are actually employees and that many workers believed to be “independent contractors” are often misclassified, as they do not fulfill the six-factor test. For more information on the guidance and the independent contractor test, please see this article on HR.BLR.com.
Therefore, unless you are certain that the role held by this employee for July and August would meet the independent contractor requirements, the best practice would be to err on the side of caution and include these hours as hours that he or she was “employed” toward the 1,250 hour service requirement.
We hope this information is helpful and we thank you for your inquiry.