Temporary Workers and the FMLA: What You Don’t Know Can Hurt You
October 25, 2016

By Laurie E. Meyer

Temporary Workers and the FMLA

As most employers know, the federal Family and Medical Leave Act (FMLA) entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Employers covered under the FMLA include public agencies, state, local and federal employers, and private sector employers who employ 50 or more employees for at least 20 workweeks in the current or preceding calendar year. Further, to be eligible for FMLA leave, an employee must have (1) worked for the employer for 12 months (which need not be consecutive), (2) worked 1,250 hours in the previous 12-month period, and (3) worked at a location where at least 50 employees are employed at the location or within 75 miles of the location.

But when and how do these rules apply when temporary workers from a temporary staffing agency are used by the employer? For instance:

  • Are “temps” included in the 50-employee count to determine if the employer is “covered” by the FMLA?
  • Does an employer that uses temporary workers provided by a staffing or leasing agency have any FMLA obligations to those temporary workers?
  • What happens when a temporary worker is hired on by the employer? Do months and hours worked as a “temp” count toward the individual eligibility requirements (12 months and 1,250 hours)?

What may come as a surprise to many employers is that the answers to all of these questions is yes.

Employers and Staffing Agencies are “Joint Employers” for Purposes of the FMLA

When an employer obtains temporary workers through a staffing agency or leases employees from another source, it is typically considered a “joint employer” of those workers for many employment purposes. For example, if the employer discriminates against a temporary worker, it may be liable under state and federal discrimination laws. Joint employer liability for temporary workers is also an issue in the FMLA context since it can affect questions of eligibility for leave as well as questions surrounding what obligations the employer may have to provide leave or restore a temporary worker to his or her position. Failure to fully understand these obligations may expose an unwary employer to unanticipated and significant liability.

The Department of Labor’s regulation pertaining to the concept of joint employment provides:

“A determination of whether or not a joint employment relationship exists is not determined by the application of any single criterion, but rather the entire relationship is to be viewed in its totality. For example, joint employment will ordinarily be found to exist when a temporary placement agency supplies employees to a second employer.” 29 C.F.R. 825.106(b)(1) (emphasis added).

The Department of Labor and federal courts have applied this principle both to questions of FMLA eligibility and to questions surrounding liability for interference with FMLA leave and job restoration rights.

Counting Employees

Because a “client employer” that uses temporary workers is a “joint employer” of those workers, the employer must include temporary employees when determining whether it employs 50 or more employees within a 75-mile radius of a worksite. For example, if an employer—at the same location or within 75 miles of each other—utilizes 10 temporary workers through a staffing agency and directly employs 40 employees, that employer is covered under the FMLA.

“Primary” versus “Secondary” Employer Obligations

According to the Department of Labor regulations, the staffing company is usually the “primary employer” and the client is usually the “secondary employer.” The staffing company, as the primary employer, must give all required notices to its employees, provide FMLA leave, and, if applicable, maintain the employee’s health benefits. The secondary employer becomes responsible for these FMLA obligations only if and when the worker becomes an employee of the secondary employer permanently.

FMLA Job Restoration Rights for Temporary Help?

What about job restoration rights? If a temporary worker takes FMLA leave through the staffing agency, must the client employer accept the worker back when he or she returns from leave? The answer to that question is, maybe. Assuming the temporary worker meets the FMLA’s eligibility criteria, and assuming that both the staffing company and the client employer employ at least 50 employees as described above, both will have FMLA responsibilities toward temporary employees. The staffing agency, as the “primary” employer, bears the main responsibility for both providing FMLA leave and restoring the employee to work upon the expiration of leave. As the “secondary” employer, the client company holds a conditional responsibility only for accepting the returning employee if it continues to use an employee from that agency and if the agency chooses to return the employee to his or her assignment with the employer. The client, as the secondary employer, may not interfere with a temporary employee’s attempt to exercise FMLA rights or discharge or discriminate against any workers for opposing practices prohibited by the FMLA.

These principles were applied by the Fifth Circuit Court of Appeals in Cuellar v. Keppel Amfels LLC, a case where the plaintiff became pregnant more than a year after accepting an assignment with Keppel Amfels (“Keppel”) through a temporary staffing agency (Perma-Temp). She requested and received FMLA leave from Perma-Temp (the “primary” employer) for the birth of her baby. After her maternity leave, she sought reinstatement at Keppel (the “secondary” employer), but Perma-Temp had assigned another temporary employee to work at Keppel in her place, and Perma-Temp did not request Keppel to reinstate her. After Keppel denied Cuellar's request for reinstatement, she sued Keppel for violation of the FMLA. Dismissing the lawsuit, the court explained that Perma-Temp was the primary employer, and that only the primary employer is responsible for providing FMLA leave to a temporary employee like Cuellar and restoring her to the job. A secondary employer like Keppel is only responsible for accepting a temporary employee back from FMLA leave if it continued to use the services of a temporary employee from the temporary agency and the temporary agency chooses to place the employee returning from leave with the employer again. Because Perma-Temp did not request Keppel to reinstate Cuellar, Keppel had no obligation under the FMLA to reinstate her after her FMLA leave.

Conversely, Keppel might have been subject to FMLA liability if Perma-Temp had attempted to return Cuellar to her previous assignment upon return from leave, but Keppel had refused to accept her in favor of another agency worker. Thus, as a practical matter, employers that use temporary or leased employees should direct such workers who request FMLA leave to the staffing agency, and should not refuse to return the employee to the assignment when he or she returns from leave unless it would have ended the assignment regardless of the FMLA leave.

The “Temp to Perm” situation: All time worked counts!

Applying the joint employer principle noted above, courts have confirmed that the time spent working as a temporary worker before becoming a permanent employee counts toward the FMLA 12-month and 1,250 hour eligibility requirements, regardless of whether the employment arrangement involves a professional staffing firm or leasing agency or if the temporary employee is directly employed and is on an employer’s payroll. For example, in Mackey v. Unity Health System, a federal district court in New York ruled that "for FMLA eligibility purposes, an employee's term of employment begins once assigned by the temporary agency, rather than when hired as a permanent employee." The time worked need not be consecutive, but any break in service lasting seven years or longer does not count toward the 12-month eligibility requirement.

Davis & Kuelthau attorneys are available to assist you in reviewing your FMLA compliance and other medical leave questions, and to provide insight into any potential risks of liability. If you have any questions regarding this article, please contact your Davis & Kuelthau attorney or the author, Laurie E. Meyer, at 414.225.1419 / laurie.meyer@dkattorneys.com.

 

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