Payroll can be a complicated endeavor, and the more employees your company has, the more you have to track. When it comes to timekeeping and payroll, knowing the rules and remaining in compliance with federal regulations is a requirement. The Family and Medical Leave Act (FMLA) is one of the complex components to track in the payroll department, and your team needs to know the rules.
What Is FMLA?
FMLA requires employers with 50 or more employees to provide up to 12 weeks of unpaid and job-protected leave to eligible employees for the birth or adoption of a child or for the serious illness of the employee, spouse, child, or parent. To be eligible for FMLA, employees must have worked for the company for at least 12 months and accrued 1,250 hours or more during that time period. They must also work at a location that employs 50+ employees within a 75-mile radius.
Payroll Issue #1: Determining Leave
Employees who meet the requirements for FMLA coverage can take up to 12 weeks off within a 12-month period. The question for the payroll department and employer, then, is what constitutes the 12-month period. Is it a calendar year? A fiscal year? A rolling year? Once the time frame is determined, it’s payroll’s job to stay abreast of all worked hours, as well as paid and unpaid leave to ensure eligibility.
Payroll Issue #2: Bundling FMLA with Other Benefits
As it often happens in life, things don’t often occur within a vacuum. What if an employee starts out on sick leave and then realizes the illness is going to require a longer absence from work? Or what if FMLA leave overlaps with holiday pay? Depending on your company policy, you may require employees to exhaust their paid leave before moving into their covered FMLA leave. Most companies will want this time off to run concurrently so employees aren’t getting two weeks of sick (paid) leave followed by 12 weeks of FMLA (unpaid) leave, for instance. In the case of holiday pay, the employee must work during the week of the holiday to receive that pay, so that’s pretty straightforward.
If you have questions about FMLA coverage and how payroll is affected, the accounting specialists at Techeon can help. Contact us today to learn more.