Out of Sight, Out of Mind: The Remote Worker and the FMLA’s 50/75 Rule
Navigating the Family and Medical Leave Act (FMLA) in the COVID era, including the pandemic-related amendments, has felt like a minefield for many employers. Now that the surge of COVID-related uses of FMLA leave has largely passed, a new aspect of statutory compliance is emerging as a hot-button issue: treatment of remote workers under the FMLA.
The FMLA provides eligible employees with up to 12 weeks of protected, unpaid leave per year for qualifying family or medical reasons. In order to be eligible for FMLA coverage, four elements must be met:
- The employer is a covered employer under the Act, meaning it has at least 50 employees for at least 20 weeks in the current or previous year;
- The employee must have worked for the employer for at least 12 months, not necessarily consecutively;
- The employee must have worked at least 1250 hours in the last 12-month period; and
- The employee must be employed at a worksite where the employer employs at least 50 employees within a 75-mile radius.
Many employers do not pay much consideration to the last element, also known as the “50/75 Rule,” likely because the first element requires 50 employees and in the majority of instances those 50 employees are by default going to work within a 75-mile of the employer’s office. However, in the COVID era and beyond, more and more employees are permitted to work remotely on a full-time basis, and employers are hiring remote employees all over the country, regardless of the location of the employer’s physical office or operations.
The FMLA itself does not address remote workers, but the Department of Labor’s regulations specify that an employee’s personal residence is not a worksite for employees who work at home by telecommuting. 29 C.F.R. § 825.111(a)(2). Further, “[f]or employees with no fixed worksite … the worksite is the site to which they are assigned as their home base, from which their work is assigned, or to which they report.” Id.
In many instances, the remote employee’s home base, worksite from which their work is assigned, and worksite to which they report are one and the same—a single location such as a main office. For example, suppose a new data processing company has 100 employees and one physical office, located in Pennsylvania from which all management employees operate on-site. The company’s low-level data entry employees work remotely, and the company has been rapidly hiring employees nationally without regard to their state of residence. If a remote data entry employee in California seeks FMLA leave, the Company must determine her eligibility. Does the Company employ 50 employees within 75 miles of the office, which is the employee’s home base, the location from which her work is assigned, and to which she reports? If 20 employees work in the office, 10 more work remotely nearby in Pennsylvania, and 70 work remotely throughout the country, more than 75 miles away from the Office, then the 50/75 Rule has not been met, and the employee is not eligible for FMLA coverage.
Things get much more complicated, however, if the employer has multiple locations or if supervisors themselves work remotely. When passing the FMLA, the Senate indicated that the term “worksite” was intended to be interpreted in the same manner as the term “single site of employment” under the Worker Adjustment and Retraining Notification Act (WARN) and its regulations. See Sen. Rep. No. 103-3 at 23 (1993). So, when a remote employee’s worksite is not obvious, we look to case law interpreting the WARN Act to determine what it means for a worksite to be the site: (1) to which the employee is assigned as their home base; (2) from which their work is assigned; or (3) to which they report.
The Third Circuit provided a clear interpretation in Ciarlante v. Brown & Williamson Tobacco Corp., 143 F.3d 139 (3d Cir. 1998). Per Ciarlante, a remote employee’s “home base” must be, at a minimum, a location at which the employee would be physically present at some point during a typical business trip. It refers to the physical base of the employee, rather than to the physical base of the employer’s operations. A remote employee’s “assigning site” is the source of the day-to-day instructions given to the employee. It is not determined by the location of centralized payroll or other centralized managerial or personnel functions. Instead, it is the location of the workers who are ultimately responsible for creating work tasks—the source of instructions, rather than a mere conduit location through which instructions are passed to the employee. Finally, a remote employee’s “reporting site” is the location of the personnel who are primarily responsible for reviewing reports and other information sent by the employee to assess performance, record tasks completion, etc.
Needless to say, determining a remote employee’s worksite for purposes of analyzing FMLA eligibility under the 50/75 Rule is fact-intensive and case-specific. Employers who are particularly at risk of incorrectly applying the 50/75 Rule or granting FMLA leave to employees who are not actually eligible are: (1) employers with over 50 employees, all of whom work on-site, but are spread out over multiple locations that may not be within 75 miles of one another; and (2) employers with few physical locations but many remote employees who live in multiple states. The Third Circuit has not yet analyzed the 50/75 Rule for remote workers in the current era of now-standard employment of remote employees. The U.S. District Court for the Eastern District of Pennsylvania analyzed the issue back in 2013, but in the context of a remote employee’s transfer to another position and reporting location around the time of her requested FMLA leave. O’Donnell v. Passport Health Communs., 2013 U.S. Dist. LEXIS 51432, 2013 WL 1482621 (E.D. Pa. Apr. 10, 2013). Therefore, employers in this jurisdiction are left largely without guidance from controlling case law as to the legal worksite of remote employees under the FMLA.
It is more than just best practice for employers to get up to speed on the FMLA’s 50/75 Rule application to remote workers—their legal defense of any potential claim depends on it. In a claim for FMLA violation (typically either interference or retaliation), employers may assert the defense of good faith, which means the act or omission that allegedly violated the FMLA was done in good faith and that the employer had reasonable grounds for believing the act or omission was not a violation of the FMLA. See 29 U.S.C. § 2617(a). The FMLA does not define “good faith,” so courts look to the Fair Labor Standards Act for its interpretation of this phrase. Under this interpretation, good faith requires a duty to investigate potential liability and more than reliance on ignorance.
One recent case in another jurisdiction underscored just how substantial the burden is on employers to successfully invoke the good faith defense. See Landgrave v. ForTec Med., Inc., 581 F. Supp. 3d 804 (W.D. Tex. 2022). In January of 2022, a District Court in the Fifth Circuit granted an FMLA-leave-seeking plaintiff’s partial motion for summary judgment to deny her employer’s affirmative defense of good faith. The plaintiff was a remote employee, and the employer had denied her request for FMLA leave, deeming her ineligible under the 50/75 Rule based on their interpretation of the plaintiff’s worksite. Despite this denial, the plaintiff took a leave of absence from work to care for her ailing mother. As she had no available leave to use, her employer deemed her to have voluntarily resigned her position when she failed to report to work by a date certain. The plaintiff claimed that the employer failed to investigate the FMLA’s applicability to remote workers before ending her employment.
The employer’s Human Resources Manager testified that she had no knowledge of the FMLA’s treatment of remote workers and that she did not seek legal counsel regarding FMLA eligibility. She did review the employee handbook’s requirements of FMLA eligibility, which mentioned a requirement of 50 “employees in the work or reported-to location” to reach the decision that the plaintiff did not qualify for FMLA protection. However, the court agreed with the plaintiff that this investigation into FMLA eligibility was insufficient to constitute “good faith” on the part of the employer. Specifically, the court stated that referring to an employee handbook for guidance on how to assess FMLA eligibility of a remote employee does not relieve an employer of its duty to investigate the employee’s rights where the handbook does not address the treatment of remote workers.
Employers should consult legal counsel any time a remote employee seeks FMLA leave to determine if the 50/75 Rule is met. In turn, counsel should specifically inform their employer clients of the 50/75 Rule and ensure that the 50/75 Rule is represented in company policies or handbooks concerning FMLA eligibility for remote workers specifically. Additionally, employers should keep a regularly-updated list of the cities and states in which all remote employees live, to more quickly calculate the number of employees within 75 miles of a particular worksite.
Alexandra Farone is an associate in the Litigation and Employment and Labor groups of Babst Calland. Ms. Farone’s employment and labor practice involves representing corporate clients, municipalities, and individuals on all facets of employment law, including restrictive covenants, discrimination claims, human resources counseling, grievances, and labor contract negotiations. Please contact her at 412-394-6521 or email@example.com.
Janet Meub is senior counsel in the Litigation and Employment and Labor groups of Babst Calland. Ms. Meub has significant experience in the areas of employment and labor law, professional liability defense, insurance coverage and bad faith litigation, toxic tort litigation, nursing home negligence, and medical malpractice defense. She has a diversified practice that includes defending employers, healthcare providers, law enforcement and other professionals, and non-profits, at all levels of civil litigation through trial. Contact her at 412-394-6506 or firstname.lastname@example.org.
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Reprinted with permission from the November 17, 2022 edition of The Legal Intelligencer© 2022 ALM Media Properties, LLC. All rights reserved.