Don’t Overlook Leave Laws Impact on New Remote Workforce

by Prof. Robert Bloink and Prof. William H. Byrnes

A wealth of federal and state relief was available to workers during the height of the COVID-19 pandemic. Now that federal paid leave laws have expired, pre-pandemic state and federal laws are once again becoming much more relevant. For many employers, that’s created a difficult situation because those laws didn’t necessarily account for the widespread availability of remote work programs that we’re seeing today. Some workers expect to continue working remotely on a permanent basis—many in states and localities far removed from their employer’s primary place of business. Small business clients who are grappling with this new work order need to understand which state, local and federal leave laws they’re required to comply with to prevent problems down the line.

FMLA Leave Laws

The Family and Medical Leave Act (FMLA) is a federal law that provides workers with 12 weeks of unpaid, job-protected time off work each year. Employers are not required to pay the employee during the period of leave, but are required to maintain their group health benefits.

Not all employers are subject to the FMLA—and not all employees qualify for leave. To qualify for leave under Department of Labor (DOL) rules, an employee must (1) work for a covered employer, (2) have a valid qualifying reason for taking leave, (3) have at least 12 months of service with the employer and (4) have worked at least 1,250 hours over the past 12-month period.

To be a “covered employer”, the employer must employ 50 or more employees within a 75-mile radius. Those employees must have worked for 20 or more workweeks in the current or prior calendar year. More specifically, to qualify for leave, the employee must have worked at a “worksite” where the employer has at least 50 employees within 75 miles.

The “worksite” is defined as the office from which the employee’s assignments are made and where the employer reports.

In today’s remote world, the employee’s boss may also be working from a remote location. That leaves many businesses to wonder whether the employee will be treated as “reporting” to a main office or to the location of the employee’s assigning boss. The DOL has yet to offer guidance on these scenarios.

State and Local Leave Laws

Most states and localities have implemented their own leave laws in recent months. Some of those laws required paid time off while others mirror the federal unpaid leave law.

For example, Massachusetts has a paid family medical leave law (the PFML). All workers in the state of Massachusetts are covered by the law if they’ve earned at least $5,400 in the previous 12 months. However, employers are required to withhold a tax from the employee’s paycheck to fund the paid leave.

New Jersey’s Family Leave Act (NJFLA) impacts all employers with at least 30 employees—regardless of where those employees are located. Those employers are required to provide up to 12 years off if someone in the employee’s family requires care (but does not apply if the employee becomes sick or disabled). While the employer doesn’t have to contribute to the program, it does have to withhold contributions from the employee’s paycheck.

Need-to-Know Information for Employers

Employers who decide to continue permanent remote work arrangements should be advised of the need to pay close attention to where their employees choose to work. In some states, it’s the employer who may be required to withhold funds from the employee’s paycheck to provide for state-level benefits—even if the employer’s only connection to the state is the fact that the remote employer works there.

Employers may also be required to comply with state and local leave laws even if they don’t maintain an office in those locations. That means that some employees may be entitled to state-level leave even after they’ve exhausted their FMLA leave.

The bottom line? Small business clients who permit remote work may be required to comply with a variety of unfamiliar leave laws and should make sure they’re familiar with those laws before it becomes an issue. Those employers should have policies and procedures in place for remote workers and the state-level employment and tax issues that these programs generate.

Conclusion

Widespread remote work may be a relatively new phenomenon—but it likely isn’t going away any time soon. The DOL and federal agencies may step in to provide guidance, so small business clients should continue to pay close attention for more clarity in the future.