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Sure, `Unpaid Leave' Sounds Simple, But...


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SURE, `UNPAID LEAVE' SOUNDS SIMPLE, BUT...

When Joseph Clague asked for a leave after the birth of his second child, he says his boss at Portland General Electric Co. "just laughed." Two and a half years later, in March, 1988, the service inspector was expecting his third kid and asked again. By that time, Oregon had a law granting up to 12 weeks of unpaid parental leave to employees in companies with more than 25 workers. Clague wanted 10 weeks off. But instead of forgoing his paycheck, he wanted to substitute two weeks of paid vacation, three floating holidays, and 7 1/2 weeks of accrued sick leave for the unpaid time. PGE agreed to the leave and the vacation time, but nixed the sick days because Clague "wasn't sick," says John R. Faust, a lawyer for PGE.

Clague took the 10-week leave anyway, depleting his savings and going into debt. But that's not all: He also complained to the state Bureau of Labor & Industries. The agency ruled that employees may indeed use accrued sick leave as parental leave and awardedClague $7,862 in back sick pay and damages. PGE appealed, and the case is now pending before the Oregon Supreme Court. Parental leave, says Clague, "becomes just a luxury of middle- and upper-level people if you aren't able to use your paid leave." Says Faust: "Substituting paid time for unpaid leave adds a cost that the law didn't intend."

TEST CASES. Is the nation ready for the federal Family & Medical Leave Act (FMLA)? When the law takes effect on Aug. 5, mandating unpaid leave for child care and other family and personal needs, employers and workers will have to resolve contentious issues similar to those PGE is still dealing with. Can employees substitute accrued sick days for unpaid leave? Just what constitutes an "equivalent" job when a leavetaker returns and his or her own job is taken? What sort of employee illnesses are "serious" enough to justify a leave? "It's more complicated than people would think," says LeAnna Ware, bureau director of the Equal Rights Div. at the Wisconsin Industry, Labor & Human Relations Dept.

Corporate America isn't starting from scratch: There are already some test cases from the 35 or so states that now grant parental, family, or medical leave to employees. The federal law tracks many of the states' requirements; where they conflict, the FMLA lets employees pick the most generous provisions between state and federal laws.

But that won't make implementation any easier. Figuring out which law applies will be difficult enough. And the complaints brought under state laws represent complex human-resources issues that defy simple solutions. "It's not until you start factoring all these things together that you get a big headache for employers," says Carol Sladek, a benefits consultant with Hewitt Associates in Lincolnshire, Ill.

Compared to the state laws, which many workers remain unaware of, the FMLA has less of a recognition problem. Twice vetoed by President Bush, it provides up to 12 weeks of unpaid leave for a child's birth, adoption, or foster-care arrival. Leaves may also be taken to care for a spouse, parent, or child with a "serious health condition," or when an employee is too sick to work.

The law applies to employees who have worked an average of 25 hours a week in the past 12 months for the same company and to employers with 50 or more employees. Employers must provide health benefits during the leave and must give returning employees their prior job or an equivalent one in terms of salary and other conditions.

UNEQUIVALENCE. A Wisconsin suit points out just how tough such a requirement can be for employers. After Elizabeth Marquardt returned from maternity leave on Dec. 12, 1988, she discovered that her Milwaukee-based employer, Kelley Co., had eliminated her job as credit manager during a restructuring. Marquardt's new job involved supervising one employee instead of four workers and, unlike the old position, included about 25% clerical work. She resigned the next day.

Kelley says that the reassignment was intended to sidestep Marquardt's long-standing communication problems with customers. But even though the new job went with the same pay, the same benefits, and the same office as before, a Wisconsin appeals court ruled that the jobs were not equivalent because Marquardt's "authority and responsibility were greatly reduced in the new position." The court ordered a hearing to determine back pay, and the parties settled recently for an undisclosed amount.

In anticipation of the FMLA, large employers are adapting existing policies to the new rules. Companies that already operate in states with similar laws, such as Prudential Insurance Co., say that the transition will be straightforward.The FMLA will mean big changes, though, for smaller companies such as 300-employee Pacer Systems Inc. in Billerica, Mass. It had offered up to six months' leave, but only to employees who themselves fell sick or gave birth. "For us, the big difference will be having to give job protection and benefits to people who are not sick," says Roberta Steinberg, vice-president of human resources. Still, Steinberg says the most expensive part of the new law will be the time she has had to pour into preparation. For employees such as JoeClague in Oregon, such efforts are worth it: They get to spend time with their families when it matters most.THE NEW FAMILY LEAVE LAW

COVERAGE

The federal Family & Medical Leave Act covers employers with at least 50

employees. Eligible employees must have worked about 25 hours a week for one

year.

DURATION

The law provides up to 12 weeks unpaid leave after birth or adoption. Leave may

be taken to care for a sick spouse, child, or parent, or when an employee is

too ill to work.

PROTECTIONS

Employers must offer health benefits during the leave and give returning

workers the same or "equivalent" jobs in terms of pay, responsibilities, and

other conditions.

Michele Galen in New York, with bureau reports


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