New FMLA guidelines for corporate size

by on February 2, 2009 · 0 Comment POSTED IN: HR Info Center

FMLA law changes on corporate size and company eligibility

For years, we’ve told you that if you had fewer than a certain number of employees at your company or worksite, you were safe from lawsuits under various federal employment laws.

And for years, that was true. Now, though, in the wake of a U.S. Supreme Court ruling last year, things have changed. Federal courts have recently decided that even the smallest employers can be sued under laws like Title VII, COBRA and FMLA.

How can this be? Doesn’t Title VII say clearly that you must have at least 15 employees before you’re potentially liable?

And isn’t the floor 20 employees for COBRA, and 50 for FMLA?

WHAT HAS CHANGED

Yes. But the Supreme Court’s Arbaugh decision changed things by saying this: An employee whose employer’s workforce is under the legal floor isn’t barred from bringing a claim.

What the law does for employers is allow them to dispute the claim – and win – on the basis that they’re too small.

The trouble with this kind of protection, though, is that employers can inadvertently give it up if they make the wrong kind of move.

Two new cases show how a company can accidentally strip itself under FMLA guidelines of the size protection. These cases give HR an idea of what to watch out for – and avoid.

FMLA GUIDELINES FOR NUMBER OF EMPLOYEES

In Iowa, an employee sued because the employer refused him FMLA leave.

The employer argued that because it didn’t have 50 employees at his site, the site wasn’t covered under FMLA guidelines.

Not the point, the court said. The employer had distributed the same company handbook both to the employee’s site and to a larger site that was FMLA-covered.

And the handbook’s references to FMLA may have made it sound to employees at the smaller site that they were covered, too.

In the other case, in Michigan, an African-American employee sued her small employer because it had offered COBRA coverage to a white man but not to her. The court said her argument – that the company had given up its size protection – was legally sound.

Cite: Myers v. Tursso Co., No. C07-3016, N.D. Iowa, 7/13/07; Thomas v. Miller, No. 05-2404, 6th Cir., 6/27/07.

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