Dear Addi P.,
We're employing more and more contingent workers, and I want to make sure our time-tracking methods keep up so we don't fall on the wrong side of FMLA rules. Can you help me with some best practices?
— Tracking in Tucson
Great question! Record keeping is one of the most important aspects of FMLA compliance, and adding temporary employees to the mix can complicate that task. As I mentioned in my earlier post, not all contingent workers are eligible for FMLA leave. Individuals who truly meet the criteria to be considered independent contractors are not covered by the FMLA.
Assuming they are working for a business that is covered by the FMLA, workers who are temporary employees are covered by the FMLA once they meet the eligibility requirements. You also need to remember that if a worker starts out working for your company as a temporary employee, and you later hire that person as a regular employee, the time they worked for you as a temporary employee must be included when considering whether they have met the FMLA's eligibility requirements.
Here are three features to consider when tracking the work and leave schedules of your employees, including temporary employees who are or may become eligible.
Comprehensive Data Collection
Whatever FMLA tracking system you choose should allow for the easy collection and updating of the wide range of data needed for FMLA compliance. For each FMLA-eligible employee, including temporary employees, the U.S. Department of Labor (DOL) requires employers to record the following information:
- Name, address and occupation
- Basis and terms of compensation
- Daily and weekly hours worked for each pay period
- Any additions to or reductions from pay
- Total compensation
Employers also must list the dates on which employees take FMLA leave (and the hours of leave they used, if the time is in increments of less than a day). Other mandated data includes copies of FMLA notices exchanged between employer and employee, documents explaining the company's leave policy, health care premiums paid for employees and records of any disputes over the designation of time off as FMLA leave.
If you hired contingent workers through an agency that is their primary employer, the agency is responsible for the bulk of FMLA tracking, but the DOL still requires you to maintain basic payroll and identifying data pertaining to those employees.
Although you don't have to show your employee records to the DOL unless you receive a specific request, you are required to retain them for at least three years.
Appropriate Method for Calculating Leave
According to the Electronic Code of Federal Regulations, there are several options for calculating the amount of FMLA leave to which an employee is entitled when they request time off. The differences lie in how you choose to define the 12-month period in which they receive their 12-week leave allowance.
You may base your determination on one of four measurements:
- The calendar year
- A fixed 12-month leave year
- A 12-month period looking forward from the date of the employee's first FMLA leave
- A rolling 12-month period measured backward from the date the employee uses any leave (also known as the "look-back" method)
Streamlined Leave Management
Managing employee leave, especially for temporary and other employees who may have variable work schedules, can be complex and time-consuming. An inefficient leave-management system can lead to a loss of productivity, reduced employee morale, and lower-quality work.
Consider whether an outsourced HR solution that can be integrated with your payroll system might ease the burden of company managers trying to keep up with contingent leave schedules. Federal regulations place no restrictions on the format you choose for keeping FMLA-related data. Electronic records are perfectly acceptable, and when they are collected and stored using a well-designed software solution, they can facilitate effective FMLA tracking.
Addi P. is a digital character who represents the human expertise of ADP. The questions and challenges come from professionals who manage people at companies of all sizes. The advice comes from ADP experts who have a deep understanding of the issues and a passion for helping leaders create a better workplace. If you have a challenge you'd like to pose for Addi P., complete this simple form.
The information provided here is for general informational purposes only and not legal, insurance, financial or tax advice. The information and services ADP provides should not be deemed a substitute for the advice of a professional who can better address your specific concern and situation. Any information provided here is by nature subject to revision and may not be the most current information available on the subject matter discussed.