Employer qualifying for FMLA?
Redbudpt
55 Posts
Hello, I am currently researching to find out if our company is eligible to provide FMLA leave to employees. The company has 50 employees and we are approaching the 20 week mark. My question is this: Three of our "employees" that are on payroll are the owners/partners of the company. In my "2008 Mandated Benefits Compliance Guide" it states that " Under the FMLA's definition of employee, persons who are partners in a business are not counted as employees even if their names appear on the payroll. However, equity owners (e.g. stockholders) may be considered employees in the corporation and, as such, if their names appear on the payroll, they are included in the count onf employees and may be eligible for leave." I have not been able to find information within the FMLA regulations to back up this statement. If anyone could point me in the right direction I would greatly appreciate it. This one statment makes the difference of us qualifying for FMLA within a few weeks or a few months.
Comments
I have been reading up on this too, since we are also getting close. I have not found anything to confirm that statement. The best place to go is back to the Regulations. Start at 29 CFR 825.104: http://www.dol.gov/dol/allcfr/ESA/Title_29/Part_825/29CFR825.104.htm Read through section 104 and 105.
I don't see any exceptions for owners/partners.....your choice after you read through those sections of the Regulations is to call the DOL/EBSA to get a confirmation. I would trust that more than a Compliance Guide put out by someone other than the DOL!
However, once again I am not finding that backed up in the actual regulations themselves anywhere....AND DOL opinion letters are fact specific as even they noted here. It seems to depend on how much the owner/partner is a true employee....
Personally, we err on the side of caution at our company, so we count owner/partners who are on payroll. Currently, there are none, but there have been in the past.
One might read "[...] in general, whether an individual is a true owner or partner as opposed to an employee depends on whether he or she acts independently and participates in management or instead is subject to the control of the organization[.]" to indicate that the majority owner, if there is such a single individual, is not included but the other ones are since they are subject to the will of the organization, embodied in the single majority owner. If you had 4 owners with equal share, no one of them is necessarily subject to the organization in the same sense as is if one of them owned 51% and the others had any variation of splits on the remaining minority stake. That would, at most, discount one person, the majority owner.
However, none of that may merit further discussion or research. If you anticipate continued to growth and you are almost there now, then there's not likely to be a whole lot saved by putting FMLA off. Or, more specifically and in terms your CFO will understand, the time you use, and the time of your attorney that you use, trying to answer this question with high precision will cost more than if someone actually uses an average amount of FMLA time that they weren't entitled to under the tightest scrutiny of the law that you can make. You also may find that you cannot resolve this question clearly, which means that you cannot have confidence when you deny FMLA. Trying to get it exactly right invites the possibility that someone in your small Company will need it and not get it only a week or two before someone else needs it and gets it, which can lead to a lawsuit challenging exactly when you were required to implement.
I agree with HRforME that your best bet is to call the DOL or call an employment law attorney who wont give you an unresearched answer. The DOL will try to give yuo the best answer they can but they often aren't very dilligent about collecting the information they need to give you a good answer. Their answer also isn't in writing unless you specifically go through the process of getting an opinion letter, in which you will have to state enough facts for them to give you a solid answer.