Focus on Revised FMLA Regulations: How Breaks in Service Affect Eligibility

As promised, I will be reporting on the specific revisions to the FMLA Regulations in individual blogs over the next few weeks in the hopes of getting everyone "up to speed" prior to the January 16, 2009 effective date.

With layoffs in the news, I thought that it would be an appropriate time to discuss breaks in service and their impact on FMLA eligibility.

Employees must have been employed with their employer for at least twelve months to be eligible for FMLA leave. Under the existing FMLA Regulations, the 12 months need not be consecutive, but there is no guidance in the current Regulations as to how long an employer is required to "look back" when the employee has had a break in service.

The Revised Regulations provide that, although the 12 months still need not be consecutive, employment prior to a continuous break in service of seven years or more does not need to be counted. In the proposed Regulations, the Department of Labor (DOL) had proposed a five year break-in-service period. However, the DOL received comments that any cap on the break in service was contrary to the admittedly ambiguous language of the Regulations, and that women who take extended leaves from the workforce to care for children or ill family members might be particularly adversely affected by the change. In extending the permissible gap to seven years, the DOL expressed its belief that it strikes an appropriate balance between the interests of employers, many of whom retain records for seven years, and employees.

There are two exceptions to the cap in the Revised Regulations for breaks in service resulting from an employee's fulfillment of National Guard or Reserve military service obligations, and breaks where a written agreement exists concerning the employer's intention to rehire the employee after the break in service.

The Revised Regulation also provides that employers may recognize employment prior to a continuous break in service of more than seven years when determining whether an employee has met the 12-month requirement. However, if the employer does so, it must do so uniformly with respect to all employees with similar breaks in service.

This new development means that employers will need to evaluate their record-keeping practices to ensure that they retain records of employment for all employees for at least seven years. Given that there is a two year statute of limitations on FMLA claims, and a three year statute of limitations when the claim is premised upon a willful violation, employers would be prudent to maintain records of the duration of their former employees' employment for ten years.

Please see my November 21, 2008 blog for a link to the full text of the Revised Regulations. The new Regulation concerning breaks in service can be found at Section 825.110 (eligible employee) of the Revised Regulations.