The FMLA is full of traps for companies who use staffing agency workers, both for staff augmentation and temp-to-hire. Here are a few of the most common mistakes and how to avoid them:
1. Mistake: Not counting staffing agency time as service time, when determining whether the worker has worked for 12 months.
Tip: Staffing agency time counts. Add staffing agency time plus regular employee time to determine whether the worker has 12 months of service time. Accumulate all time worked during the past seven years.
Explanation: One of the FMLA eligibility requirements is that the worker has worked for the employer for 12 months. Time worked through a staffing agency counts toward the 12 months, even if there was a break in service. Once a worker is hired as an employee, all time worked for the benefit of the company during the previous seven years is accumulated and is counted toward the 12 months total.
It doesn’t matter if the work was performed through a staffing agency, and it doesn’t matter if there was a break in service between when the worker was employed through the staffing agency and when the worker is hired as a regular employee, so long as the break in service is less than seven years.
2. Mistake: Not counting time worked for the staffing agency when determining if the worker worked 1250 hours during the preceding 12 months.
Tip: Accumulate staffing agency hours and regular employee hours to determine whether the individual worked 1250 hours during the 12 months preceding the leave request.
Explanation: To be eligible for FMLA coverage, an employee must have worked for the employer for at least 1250 hours during the 12 months immediately preceding the leave request. Hours worked through a staffing agency count toward this 1250-hour threshhold.
3. Mistake: Failing to consider whether staffing agency workers count toward the 50-employee coverage threshhold.
Tip: The rules here are complicated, but staffing agency workers (including temp-to-hire) might count, depending on how long they have been placed at your company’s site.
Explanation: Regardless of the 12-month and 1250-hour requirements, an employee is still not eligible for FMLA coverage unless the employer employed at least 50 workers within a 75-mile radius. Workers employed through a staffing agency might count. This gets complicated but is explained in DOL Fact Sheet 28N and 29 CFR 825.111.
In general, for this calculation, a staffing agency worker counts toward the 50-employee threshhold only if the worker has been physically placed at the company’s site for at least one year. Staffing agency workers placed at the site for less than one year do not count.(Instead, these workers count toward the staffing agency’s 50-employee count.)
A strategy of dumping temps to avoid the 50-employee threshhold will not necessarily avoid coverage. The 50-employee threshhold is not determined with a snapshot. Instead, the threshhold is met if the employer employed 50 employees during 20 or more workweeks in the current or preceding calendar year. This calculation can get complicated, and there are additional nuances. But don’t ignore long-term temps or long-term staffing agency workers. They might count.
If they count and if they bring the total number of employees to 50 or more, all of the company’s regular employees are FMLA-eligible as well, assuming the other eligibility requirements are met.
4. Mistake: Declining to take back a staffing agency worker who is returning from FMLA leave.
Tip: The FMLA’s job restoration requirement applies to both the staffing agency and the company where the worker was placed, if the company is still using the same staffing agency.
Explanation: Companies using staffing agencies often reserve the right to reject an assigned worker at any time for any reason. A company might not want to re-integrate a staffing agency worker who missed 12 weeks because of an FMLA leave. The worker may have missed important developments, and the company may decide it makes better business sense to maintain the staffing configuration that was put into place during the previous 12 weeks, when a staffing worker was out on FMLA leave. This makes business sense, but it could violate the FMLA.
The FMLA’s job restoration requirement applies both to the staffing agency and to the company using the worker’s services. When a staffing agency worker who was assigned to a company returns from FMLA leave, that worker has the right to be restored to the same or an equivalent position. Business convenience does not override this requirement.
Failure to restore the worker could also be considered a violation of the FMLA’s prohibitions against retaliation for using FMLA leave and against interference with the worker’s exercise of FMLA rights.
Final Thoughts: The FMLA and its regulations are lengthy and complicated. The DOL generally applies an Economic Realities Test to determine Who Is My Employee?, but the DOL cautions in its FMLA Fact Sheets that, at least for FMLA purposes, it generally considers staffing agency workers to be joint employees of the company where they are assigned.