The Family and Medical Leave Act of 1993, 7876-8001 [E8-2062]

Agencies

• Employment Standards Administration
• Wage and Hour Division
• DEPARTMENT OF LABOR

[Federal Register Volume 73, Number 28 (Monday, February 11, 2008)]
[Proposed Rules]
[Pages 7876-8001]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-2062]



[[Page 7875]]

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Part IV





Department of Labor





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Employment Standards Adminstration



Wage and Hour Division



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29 CFR Part 825



The Family and Medical Leave Act of 1993; Proposed Rule

Federal Register / Vol. 73, No. 28 / Monday, February 11, 2008 / 
Proposed Rules

[[Page 7876]]


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DEPARTMENT OF LABOR

Employment Standards Administration

Wage and Hour Division

29 CFR Part 825

RIN 1215-AB35


The Family and Medical Leave Act of 1993

AGENCY: Employment Standards Administration, Wage and Hour Division, 
Department of Labor.

ACTION: Notice of proposed rulemaking; request for comments.

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SUMMARY: The Department of Labor's Employment Standards Administration/
Wage and Hour Division proposes to revise certain regulations 
implementing the Family and Medical Leave Act of 1993 (``FMLA''), the 
law that provides eligible workers with important rights to job 
protection for absences due to the birth or adoption of a child or for 
a serious health condition of the worker or a qualifying family member. 
The proposed changes are based on the Department's experience of nearly 
fifteen years administering the law, two previous Department of Labor 
studies of the FMLA in 1996 and 2001, several U.S. Supreme Court and 
lower court rulings, and the public comments received in response to a 
Request for Information (``RFI'') published in the Federal Register in 
December 2006 requesting information about experiences with the FMLA 
and comments on the effectiveness of these regulations.
    The Department is also seeking public comment on issues to be 
addressed in final regulations regarding military family leave. Section 
585(a) of the National Defense Authorization Act for FY 2008 amends the 
FMLA to provide leave to eligible employees of covered employers to 
care for injured servicemembers and because of any qualifying exigency 
arising out of the fact that a covered family member is on active duty 
or has been notified of an impending call to active duty status in 
support of a contingency operation (collectively referred to herein as 
military family leave). The provisions of this amendment providing FMLA 
leave to care for a covered servicemember became effective on January 
28, 2008, when the law was enacted. The provisions of this amendment 
providing for FMLA leave due to a qualifying exigency arising out of a 
covered family member's active duty (or call to active duty) status are 
not effective until the Secretary of Labor issues regulations defining 
``qualifying exigencies.'' Because of the need to issue regulations 
under the military family leave provisions of the amendment as soon as 
possible, the Department is including in this Notice a description of 
the relevant military family leave statutory provisions, a discussion 
of issues the Department has identified, and a series of questions 
seeking comment on subjects and issues that may be considered in the 
final regulations.

DATES: Comments must be received on or before April 11, 2008.

ADDRESSES: You may submit comments, identified by RIN 1215-AB35, by 
either one of the following methods:
     Electronic comments, through the Federal eRulemaking 
Portal: https://www.regulations.gov. Follow the instructions for 
submitting comments.
     Mail: Address all written submissions to Richard M. 
Brennan, Senior Regulatory Officer, Wage and Hour Division, Employment 
Standards Administration, U.S. Department of Labor, Room S-3502, 200 
Constitution Avenue, N.W., Washington, DC 20210.
    Instructions: Please submit one copy of your comments by only one 
method. All submissions must include the agency name and Regulatory 
Information Number (RIN) identified above for this rulemaking. Please 
be advised that comments received will be posted without change to 
https://www.regulations.gov, including any personal information 
provided. Because we continue to experience delays in receiving mail in 
the Washington, DC area, commenters are strongly encouraged to transmit 
their comments electronically via the Federal eRulemaking Portal at 
https://www.regulations.gov or to submit them by mail early. For 
additional information on submitting comments and the rulemaking 
process, see the ``Public Participation'' heading of the SUPPLEMENTARY 
INFORMATION section of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to the Federal eRulemaking Portal at https://
www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Richard M. Brennan, Senior Regulatory 
Officer, Wage and Hour Division, Employment Standards Administration, 
U.S. Department of Labor, Room S-3502, 200 Constitution Avenue, NW., 
Washington, DC 20210; telephone: (202) 693-0066 (this is not a toll 
free number). Copies of this proposed rule may be obtained in 
alternative formats (Large Print, Braille, Audio Tape or Disc), upon 
request, by calling (202) 693-0675. TTY/TDD callers may dial toll-free 
1-877-889-5627 to obtain information or request materials in 
alternative formats.
    Questions of interpretation and/or enforcement of the agency's 
current regulations may be directed to the nearest Wage and Hour 
Division District Office. Locate the nearest office by calling the Wage 
and Hour Division's toll-free help line at (866) 4US-WAGE ((866) 487-
9243) between 8 a.m. and 5 p.m. in your local time zone, or log onto 
the Wage and Hour Division's Web site for a nationwide listing of Wage 
and Hour District and Area Offices at: https://www.dol.gov/esa/contacts/
whd/america2.htm.

SUPPLEMENTARY INFORMATION:

I. Electronic Access and Filing Comments

    Public Participation: This notice of proposed rulemaking is 
available through the Federal Register and the https://
www.regulations.gov Web site. You may also access this document via the 
Wage and Hour Division's home page at https://www.wagehour.dol.gov. To 
comment electronically on Federal rulemakings, go to the Federal 
eRulemaking Portal at https://www.regulations.gov, which will allow you 
to find, review, and submit comments on Federal documents that are open 
for comment and published in the Federal Register. Please identify all 
comments submitted in electronic form by the RIN docket number (1215-
AB35). Because of delays in receiving mail in the Washington, DC area, 
commenters should transmit their comments electronically via the 
Federal eRulemaking Portal at https://www.regulations.gov, or submit 
them by mail early to ensure timely receipt prior to the close of the 
comment period. Submit one copy of your comments by only one method.

II. Background

A. What the Law Provides

    The Family and Medical Leave Act of 1993, Public Law 103-3, 107 
Stat. 6 (29 U.S.C. 2601 et. seq.) (``FMLA'' or ``Act'') was enacted on 
February 5, 1993, and became effective for most covered employers on 
August 5, 1993. The FMLA entitles eligible employees of covered 
employers to take up to a total of twelve weeks of unpaid leave during 
a twelve month period for the birth of a child; for the placement of a 
child for adoption or foster care; to care for a newborn or newly-
placed child; to care for a spouse, parent, son or daughter with a 
serious health condition; or when the employee is unable to work due to 
the employee's own serious health

[[Page 7877]]

condition. See 29 U.S.C. 2612. The twelve weeks of leave may be taken 
in a block, or, under certain circumstances, intermittently or on a 
reduced leave schedule. Id.
    Employers covered by the law must maintain for the employee any 
preexisting group health coverage during the leave period under the 
same conditions coverage would have been provided if the employee had 
not taken leave and, once the leave period has concluded, reinstate the 
employee to the same or an equivalent job with equivalent employment 
benefits, pay, and other terms and conditions of employment. See 29 
U.S.C. 2614.
    If an employee believes that his or her FMLA rights have been 
violated, the employee may file a complaint with the Department of 
Labor (``Department'' or ``DOL'') or file a private lawsuit in Federal 
or State court. If the employer has violated an employee's FMLA rights, 
the employee is entitled to reimbursement for any monetary loss 
incurred, equitable relief as appropriate, interest, attorneys' fees, 
expert witness fees, and court costs. Liquidated damages also may be 
awarded. See, 29 U.S.C. 2617.
    Title I of the FMLA applies to private sector employers of fifty or 
more employees, public agencies and certain Federal employers and 
entities, such as the U.S. Postal Service and Postal Rate Commission. 
Title II applies to civil service employees covered by the annual and 
sick leave system established under 5 U.S.C. Chapter 63, plus certain 
employees covered by other Federal leave systems. Title III established 
a temporary Commission on Leave to conduct a study and report on 
existing and proposed policies on leave and the costs, benefits, and 
impact on productivity of such policies. Title IV contains 
miscellaneous provisions, including rules governing the effect of the 
FMLA on more generous leave policies, other laws, and existing 
employment benefits. Title V originally extended leave provisions to 
certain employees of the U.S. Senate and House of Representatives, but 
such coverage was repealed and replaced by the Congressional 
Accountability Act of 1995, 2 U.S.C. 1301.

B. Who the Law Covers

    The FMLA generally covers employers with 50 or more employees, and 
employees must have worked for the employer for 12 months and for 1,250 
hours of service during the previous year to be eligible for FMLA 
leave. Based on 2005 data, the latest year for which data are 
available, the Department estimates that:
     There were an estimated 95.8 million workers in 
establishments covered by the FMLA regulations,
     There were approximately 77.1 million workers in covered 
establishments who met the FMLA's requirements for eligibility, and
     About 7.0 million covered and eligible workers took FMLA 
leave in 2005.
     About 1.7 million covered and eligible employees who took 
FMLA leave took at least some of it intermittently--and may have taken 
that intermittent leave multiple times over the course of the year.

C. Implementing Regulations

    The FMLA required the Department to issue regulations to implement 
Title I and Title IV of the FMLA within 120 days of enactment, or by 
June 5, 1993, with an effective date of August 5, 1993. Given this 
short implementation period, the Department published a notice of 
proposed rulemaking in the Federal Register on March 10, 1993 (58 FR 
13394), inviting comments until March 31, 1993, on a variety of 
questions and issues. The Department received a total of 393 comments 
at that time from a wide variety of stakeholders, including employers, 
trade and professional associations, advocacy organizations, labor 
unions, State and local governments, law firms, employee benefit firms, 
academic institutions, financial institutions, medical institutions, 
Members of Congress, and others.
    After considering these comments, the Department issued an interim 
final rule on June 4, 1993 (58 FR 31794) that became effective on 
August 5, 1993. The Department also invited further public comment on 
the interim regulations through September 3, 1993, later extended to 
December 3, 1993 (58 FR 45433). During this comment period, the 
Department received more than 900 substantive and editorial comments on 
the interim regulations, from a wide variety of stakeholders.
    Based on this second round of public comments, the Department 
published final regulations to implement the FMLA on January 6, 1995 
(60 FR 2180). The regulations were amended on February 3, 1995 (60 FR 
6658) and on March 30, 1995 (60 FR 16382) to make minor technical 
corrections. The final regulations went into effect on April 6, 1995.

D. Legal Challenges

The Ragsdale Decision
    Since the enactment of the FMLA, hundreds of reported Federal cases 
have addressed the Act and/or implementing regulations. The most 
significant court decision on the validity of the regulations is that 
of the United States Supreme Court in Ragsdale v. Wolverine World Wide, 
Inc., 535 U.S. 81 (2002). In its first case involving the FMLA, the 
Court ruled in March 2002 that the penalty provision in 29 CFR 
825.700(a), which states ``[i]f an employee takes * * * leave and the 
employer does not designate the leave as FMLA leave, the leave taken 
does not count against an employee's FMLA entitlement[,]'' was invalid 
because in some circumstances it required employers to provide leave to 
employees beyond the 12-week statutory entitlement. ``The FMLA 
guaranteed [Plaintiff] 12-not 42-weeks of leave[.]'' Ragsdale, 535 U.S. 
at 96. While the Supreme Court did not invalidate the notice and 
designation provisions in the regulations, it made clear that any 
categorical penalty for a violation of such requirements set forth in 
the regulations would exceed the Department's statutory authority. Id. 
at 91-96.
Other Challenges to ``Categorical Penalty'' Provisions
    As the Department explained in its December 2006 RFI \1\ and the 
subsequent 2007 Report on the RFI comments,\2\ Ragsdale is not the only 
court decision addressing penalty provisions contained in the 
regulations. Another provision of the regulations, Sec.  825.110(d), 
requires an employer to notify an employee prior to the employee 
commencing leave as to whether or not the employee is eligible for FMLA 
leave. If the employer fails to provide the employee with such 
information or the information is not accurate, the regulation bars the 
employer from challenging eligibility at a later date, even if the 
employee is not eligible for FMLA leave according to the statutory 
requirements. The majority of courts addressing this notice provision 
have found it to be invalid, even prior to the Ragsdale decision. See, 
e.g., Woodford v. Cmty. Action of Greene County, Inc., 268 F.3d 51, 57 
(2d Cir. 2001) (``The regulation exceeds agency rulemaking powers by 
making eligible under the FMLA employees who do not meet the statute's 
clear eligibility requirements.''); Brungart v. BellSouth Telecomm., 
Inc., 231 F.3d 791, 796-97 (11th Cir. 2000) (``There is no ambiguity in 
the statute concerning eligibility for family medical leave, no gap to 
be

[[Page 7878]]

filled.''); Dormeyer v. Comerica Bank-Illinois, 223 F.3d 579, 582 (7th 
Cir. 2000) (the regulation tries ``to change the Act'' because it makes 
eligible employees who, under the language of the statute, are 
ineligible for family leave; ``The statutory test is perfectly clear 
and covers the issue. The right of family leave is conferred only on 
employees who have worked at least 1,250 hours in the previous 12 
months'').
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    \1\See 71 FR 69504, 69505 (Dec. 1, 2006).
    \2\See ``Family and Medical Leave Act Regulations: A Report on 
the Department of Labor's request for Information,'' 72 FR 35550, 
35560 (June 28, 2007).
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Legal Challenges to the Definition of Serious Health Condition
    Other regulatory provisions have been challenged as well. In 
particular, challenges to the regulatory section defining the term 
``serious health condition'' as a condition causing a period of 
incapacity of more than three consecutive calendar days and continuing 
treatment, 29 CFR 825.114(a)(2)(i), has received significant attention. 
See, e.g., Miller v. AT&T Corp., 250 F.3d 820 (4th Cir. 2001); Thorson 
v. Gemini, Inc., 205 F.3d 370 (8th Cir. 2000).
    As the Department explained in its December 2006 RFI \3\ and 
subsequent Report on the RFI,\4\ the Department itself has struggled 
with this definition. After the Act's passage, the Department 
promulgated Sec.  825.114(c), which states that ``[o]rdinarily, unless 
complications arise, the common cold, the flu, ear aches, upset 
stomach, minor ulcers, headaches other than migraine, routine dental or 
orthodontia problems, periodontal disease, etc., are examples of 
conditions that do not meet the definition of a serious health 
condition and do not qualify for FMLA leave.'' This regulatory language 
was intended to reflect the legislative history of the FMLA and 
expresses the Congressional intent that minor, short-term illnesses for 
which treatment and recovery are very brief would be covered by 
employers' sick leave programs and not by the FMLA. See H.R. Rep. No. 
103-8, at 40 (1993); S. Rep. No. 103-3, at 28-29 (1993). Consequently, 
in an early response about the proper handling of an employee's request 
for leave due to the common cold, the Department responded by stating 
``[t]he fact that an employee is incapacitated for more than three 
days, has been treated by a health care provider on at least one 
occasion which has resulted in a regimen of continuing treatment 
prescribed by the health care provider does not convert minor illnesses 
such as the common cold into serious health conditions in the ordinary 
case (absent complications).'' Wage and Hour Opinion Letter FMLA-57 
(Apr. 7, 1995). More than a year and a half later, however, the 
Department reversed its interpretation, stating that Wage and Hour 
Opinion Letter FMLA-57 ``expresses an incorrect view, being 
inconsistent with the Department's established interpretation of 
qualifying `serious health conditions' under the FMLA regulations.'' 
Wage and Hour Opinion Letter FMLA-86 (Dec. 12, 1996). The Department 
further stated that such minor illnesses ordinarily would not be 
expected to last more than three days, but if they do meet the 
regulatory criteria for a serious health condition under Sec.  
825.114(a), they qualify for FMLA leave. The Department received 
significant commentary about its changing interpretations of the 
definition of serious health condition in response to its RFI. See 
Chapter III of the Department's 2007 Report on the RFI comments (72 FR 
at 35563).
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    \3\See 71 FR at 69506.
    \4\See 72 FR at 35563.
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Other Legal Challenges
    Many other legal issues have arisen over the nearly thirteen years 
the final regulations have been in effect. For example, litigation has 
ensued under Sec. Sec.  825.302-.303 as to what constitutes sufficient 
employee notice to trigger an employer's obligations under the FMLA. 
See, e.g., Sarnowski v. Air Brook Limousine, Inc.,--F.3d ,--2007 WL 
4323259 (3rd Cir. 2007) (employee with chronic heart problems who 
informed employer of need for continuing medical monitoring and 
possible surgery provided sufficient notice); Spangler v. Fed. Home 
Loan Bank of Des Moines, 278 F.3d 847 (8th Cir. 2002) (employee who had 
made employer aware that she had problems with depression gave 
sufficient notice when she called in and indicated she was out because 
of ``depression again'').
    Among other cases, the Tenth Circuit Court of Appeals considered 
the definition of ``worksite'' for determining whether an employee 
seeking FMLA leave was employed at a worksite where 50 or more 
employees were employed by the employer within 75 miles. Section 
825.111(a)(3) states that when an employee is jointly employed by two 
or more employers, the employee's worksite is the primary employer's 
office from which the employee has been assigned or to which the 
employee reports. In Harbert v. Healthcare Services Group, Inc., 391 
F.3d 1140 (10th Cir. 2004), the Court of Appeals invalidated Sec.  
825.111(a)(3), insofar as it is applied to the situation of an employee 
with a long-term fixed worksite at a facility of the secondary 
employer. The First Circuit Court of Appeals looked at a different 
eligibility criterion, the requirement that the employee has been 
employed by the employer for at least 12 months, and addressed whether 
an employee who had a break in service may count previous periods of 
employment with the same employer toward satisfying the 12-month 
employment requirement (29 U.S.C. 2611(2)(A)(i); 29 CFR 825.110(a)(1) 
and (b)). See Rucker v. Lee Holding Co., 471 F.3d 6 (1st Cir. 2006) (a 
complete break in service of a period of five years does not prevent 
the employee from counting previous employment to meet the 12-month 
employment requirement). Another regulation that has been the subject 
of litigation is Sec.  825.220(d), which in part discusses the impact 
of a light duty work assignment on an employee's FMLA rights. Further, 
most recently, the Fourth Circuit Court of Appeals ruled in Taylor v. 
Progress Energy, 493 F.3d 454 (4th Cir. 2007), petition for cert. 
filed, 76 U.S.L.W. 3226 (U.S. Oct. 22, 2007) (No. 07-539), that other 
language in Sec.  825.220(d) prevents an employee and employer from 
independently settling past claims for FMLA violations without the 
approval of the Department or a court.

E. Prior Studies and Reports

    Title III of the FMLA established a temporary Commission on Leave 
to conduct a study and report on existing and proposed policies on 
leave and the costs, benefits, and impact on productivity of such 
policies. The Commission surveyed workers and employers in 1995 and 
issued a report published by the Department in 1996, ``A Workable 
Balance: Report to Congress on Family and Medical Leave Policies.'' \5\ 
In 1999, the Department contracted with Westat, Inc.,\6\ to update the 
employee and establishment surveys conducted in 1995. The Department 
published that report, ``Balancing the Needs of Families and Employers: 
Family and Medical Leave Surveys, 2000 Update'' in January 2001.\7\
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    \5\ See https://www.dol.gov/esa/whd/fmla/fmla/1995Report/
Family.htm.
    \6\ Westat is a statistical survey research organization serving 
agencies of the U.S. Government, as well as businesses, foundations, 
and State and local governments.
    \7\See https://www.dol.gov/esa/whd/fmla/fmla/toc.htm.
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F. Request for Information

    On December 1, 2006, the Department published a Request for 
Information (RFI) in the Federal Register (71 FR 69504).
    The RFI asked the public to comment on its experiences with, and

[[Page 7879]]

observations of, the Department's administration of the law and the 
effectiveness of the FMLA regulations. The RFI's questions and subject 
areas were derived from a series of stakeholder meetings the Department 
conducted in 2002-2003, a number of rulings of the U.S. Supreme Court 
and other Federal courts as discussed above, the Department's own 
experience administering the law, information from Congressional 
hearings, and public comments filed with the Office of Management and 
Budget (OMB) as described by OMB in three annual reports to Congress on 
the FMLA's costs and benefits.\8\ More than 15,000 comments were 
received from workers, family members, employers, academics, and other 
interested parties.\9\ This input ranged from personal accounts, legal 
reviews, industry and academic studies, and surveys to recommendations 
for regulatory and statutory changes to address particular areas of 
concern. The Department published its Report on the comments received 
in response to the Department's RFI in June 2007 (see 72 FR 35550 (June 
28, 2007)).
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    \8\ These OMB reports may be found at the following Web sites: 
2001 report at: https://www.whitehouse.gov/omb/inforeg/
costbenefitreport.pdf; 2002 report at: https://www.whitehouse.gov/
omb/inforeg/2002_report_to_congress.pdf; and 2004 report at: 
https://www.whitehouse.gov/omb/inforeg/2004_cb_final.pdf.
    \9\ All comments are available for viewing via the public docket 
of the Wage and Hour Division of the Employment Standards 
Administration, U.S. Department of Labor, 200 Constitution Avenue, 
NW., Washington, DC 20210. Many comments are also available on 
https://www.regulations.gov.
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G. Stakeholder Meeting

    The Department also conducted a stakeholder meeting regarding the 
medical certification process on September 6, 2007. This meeting 
included representatives from employee organizations, employer 
organizations, and the health care provider community.

H. Other Statutory and Regulatory Developments

    As discussed in the RFI and the Report on the RFI, in addition to 
developments in the courts, several important legislative and 
regulatory developments have occurred that either directly or 
indirectly impact the FMLA regulations. In 1996, Congress enacted the 
Health Insurance Portability and Accountability Act (HIPAA), Public Law 
104-191, which addresses in part the privacy of individually 
identifiable health information. On December 28, 2000, and as amended 
on August 14, 2002, the Department of Health and Human Services issued 
regulations that provide standards for the privacy of individually 
identifiable health information, codified at 45 CFR Parts 160 and 164 
(``HIPAA Privacy Rule''). These standards apply to ``covered 
entities,'' defined as a health plan, a health care clearinghouse, or a 
health care provider who transmits any health information in electronic 
form in connection with a transaction as defined in the privacy 
regulations.\10\
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    \10\See 45 CFR 160.102(a) and 45 CFR 160.03.
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    The HIPAA Privacy Rule has had an impact on the FMLA's medical 
certification process in a number of ways. For example, the FMLA 
provides employers with the right to obtain medical information to 
determine that a requested leave qualifies as FMLA leave, and the 
employee is required to assure that this information, if requested, is 
provided to the employer to be entitled to FMLA leave for a serious 
health condition. If an employee does not do this, the absence does not 
qualify for FMLA leave.\11\ While these rules are fairly 
straightforward, recent enforcement experience reveals that there is 
confusion with regard to the interaction of the HIPAA Privacy Rule and 
FMLA. For example, some employees incorrectly believe that the HIPAA 
Privacy Rule prevents employers from requiring FMLA certification. See 
discussion of Sec. Sec.  825.306-.308 for further discussion of the 
impact of the HIPAA Privacy Rule on the medical certification process.
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    \11\See Wage and Hour Opinion Letter FMLA2005-2-A (Sept. 14, 
2005).
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    Similarly, since the final FMLA regulations were implemented in 
1995, the Equal Employment Opportunity Commission (EEOC), the agency 
responsible for enforcing the Americans with Disabilities Act (ADA), 
has issued guidance with regard to the privacy of employee medical 
information. See, e.g., Enforcement Guidance: Disability-Related 
Inquiries and Medical Examinations of Employees Under the Americans 
with Disabilities Act (ADA) (EEOC 2000). The FMLA looks to the ADA for 
guidance on privacy of employee medical information.\12\
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    \12\See 29 CFR 825.500(g).
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III. Proposed Changes to the FMLA Regulations

    The following is a section-by-section discussion of the proposed 
revisions. Where a change is proposed to a regulatory section, that 
section is discussed below. However, even if a section is not 
discussed, there may be minor editorial changes or corrections that did 
not warrant discussion. The titles to each section of the existing 
regulations are in the form of a question. The proposal would reword 
each question into the more common format of a descriptive title and 
the Department invites comments on whether this change is helpful. In 
addition, several sections have been restructured and reorganized to 
improve the accessibility of the information (e.g., guidance on leave 
for pregnancy and birth of a child is addressed in one consolidated 
section; an employer's notice obligations are combined in one section).

Section 825.102 (Effective date of the Act)

    The proposal deletes this section, which discussed when the Act 
became effective, because it is no longer needed. The section number 
itself is reserved to avoid extensive renumbering of other sections in 
the regulations.

Section 825.103 (How the Act affects leave in progress on, or taken 
before, the effective date of the Act)

    The proposal deletes and reserves this section, which discussed how 
the Act affected leave in progress on, or taken before, the Act's 
effective date, because it is no longer needed.

Section 825.106 (Joint employer coverage)

    Sections 825.106 and 825.111(a)(3) of the existing regulations 
govern employer coverage and employee eligibility in the case of joint 
employment and set forth the responsibilities of the primary and 
secondary employers. Under Sec.  825.106(d), employees jointly employed 
by two employers must be counted by both employers in determining 
employer coverage and employee eligibility. Thus, for example, an 
employer who jointly employs 15 workers from a leasing or temporary 
help agency and 40 permanent workers is covered by the FMLA. Likewise, 
if an employer with 15 permanent workers jointly employs 40 workers 
from a leasing company that employer is also covered by the FMLA.
    Although job restoration is the primary responsibility of the 
primary employer, the secondary employer is responsible for accepting 
the employee returning from FMLA leave if the secondary employer 
continues to utilize an employee from the temporary or leasing agency 
and the agency chooses to place the employee with that secondary 
employer. The secondary employer is also responsible for compliance 
with the prohibited acts provisions with respect to its

[[Page 7880]]

temporary/leased employees, and thus may not interfere with an 
employee's attempt to exercise rights under the Act, or discharge or 
discriminate against an employee for opposing a practice that is 
unlawful under FMLA. See the existing Sec.  825.106(e).
    In Wage and Hour Opinion Letter FMLA-111 (Sept. 11, 2000), the 
Department considered the application of the FMLA regulations' ``joint 
employment'' test in current Sec.  825.106 to a ``Professional Employer 
Organization'' (PEO). The PEO in question had a contract with the 
client company under which it appeared to enter into an employer-
employee relationship with the client's employees (who were leased back 
to the client and continued to work at the client's worksite pursuant 
to the terms of the contract). The PEO in this case assumed substantial 
employer rights, responsibilities and risks, including the 
responsibility for personnel management, health benefits, workers' 
compensation claims, payroll, payroll tax compliance, and unemployment 
insurance claims. Moreover, the PEO in this case had the right to hire, 
fire, assign, and direct and control the employees.
    Based on the facts described in the incoming letter, the Opinion 
Letter concluded that the PEO was in a joint employment relationship 
with its client companies for these reasons:

    1. The PEO was a separately owned and distinct entity under 
contract with the client to lease employees for the purpose of 
handling ``critical human resource responsibilities and employer 
risks for the client.''
    2. The PEO was acting directly in the interest of the client in 
assuming human resource responsibilities.
    3. The PEO appeared to also share control of the leased 
employees consistent with the client's responsibility for its 
product or service.

    The Opinion Letter stated that ``it would appear that'' the PEO is 
the ``primary employer'' for those employees ``leased'' under contract 
with the client. Thus, under existing Sec.  825.106, the PEO would be 
responsible for giving required FMLA notices to its employees, 
providing FMLA leave, maintaining group health insurance benefits 
during the leave, and restoring the employee to the same or equivalent 
job upon return from leave. The ``secondary employer'' (i.e., the 
client company) would be responsible for accepting the employee 
returning from FMLA leave if the PEO chose to place the employee with 
the client company. The Opinion Letter concluded that the client 
company, as the ``secondary employer,'' whether a covered employer or 
not under the FMLA, was prohibited from interfering with a ``leased'' 
employee's attempt to exercise rights under the Act, or discharging or 
discriminating against an employee for opposing a practice that is 
unlawful under the Act.
    While no specific questions concerning PEOs were contained in the 
RFI, the Department did seek information on ``any issues that may arise 
when an employee is jointly employed by two or more employers'' (71 FR 
at 69509). In response to the RFI, a number of stakeholders commented 
that it is not correct to consider PEOs (sometimes called ``HR 
Outsourcing Vendors'') to be joint employers with their client 
companies and explained the differences between a temporary staffing 
agency and a PEO. ``A temporary staffing agency is a labor supplier. It 
supplies employees to a client while a PEO is a service provider 
providing services to existing employees of a company.'' See comments 
by Jackson-Lewis. Unlike a temporary staffing agency, a PEO does not 
have the ability to place an employee returning from FMLA leave with a 
different client employer. Id.
    The AFL-CIO commented that PEOs engage in a practice known as 
``payrolling,'' in which the client employers transfer the payroll and 
related responsibilities for some or all of their employees to the PEO, 
and that typically, the PEO also makes payments on behalf of the client 
employer into State workers' compensation and unemployment insurance 
funds, but the PEO does not provide placement services. In contrast 
with temporary staffing agencies, the AFL-CIO commented, PEOs do not 
match people to jobs.
    The law firm of Littler Mendelson advised that ``Employee leasing 
arrangements''--like those involving temporary services firms and other 
staffing companies--refer to arrangements in which the staffing firm 
places its own employees at a customer's place of business to perform 
services for the recipient's enterprise. The PEO, in contrast, assumes 
certain administrative functions for its clients such as payroll and 
benefits coverage and administration (including workers' compensation 
insurance and health insurance). The PEO typically has no direct 
responsibility over the employees of its clients including ``hiring, 
training, supervision, evaluation, discipline or discharge, among other 
critical employer functions.''
    The law firm of Fulbright & Jaworski commented that PEO 
responsibilities vary by organization and contract, but that most are 
not involved in the day-to-day operations of their client's business 
and do not exercise the right to hire, fire, supervise or manage daily 
activities of employees. The firm urged the Department to clarify that 
opinion letter FMLA-111 (Sept. 11, 2000) is about an atypical PEO that 
actually exercised control over the client's employees.
    The Department proposes to amend Sec.  825.106(b) to clarify that 
PEOs that contract with client employers merely to perform 
administrative functions, including payroll, benefits, regulatory 
paperwork, and updating employment policies, are not joint employers 
with their clients, provided they merely perform such administrative 
functions. On the other hand, if in a particular fact situation a PEO 
has the right to hire, fire, assign, or direct and control the 
employees, or benefits from the work that the employees perform, such a 
PEO would be a joint employer with the client company.
    Some of the comments concerning PEOs suggest confusion over how to 
count employees jointly employed for purposes of employer coverage 
(``over 50 workers'') and employee eligibility (``over 50 employees 
within 75 miles''). Some of these comments suggest that all of the 
employees of both the primary and secondary employers (and even those 
of other secondary employers) must be combined and counted together for 
purposes of these two tests. However, under the existing Sec.  
825.106(d) only those employees who are jointly employed by the primary 
and each of the secondary employers are included in the employee counts 
of both firms. The home office employees of the primary employer and 
the employees placed with other secondary employers are not included, 
for example, in the employee counts for each secondary employer.
    For the reasons discussed above, existing paragraph (b) of Sec.  
825.106 is proposed to be changed to paragraph (b)(1) and a new 
paragraph (b)(2) is proposed to be added to clarify how the joint 
employment rules apply to PEOs. Under the proposal, PEOs that contract 
with client employers merely to perform administrative functions--
including payroll, benefits, regulatory paperwork, and updating 
employment policies--are not joint employers with their clients, 
provided: (1) They do not have the right to exercise control over the 
activities of the client's employees, and do not have the right to 
hire, fire or supervise them, or determine their rates of pay, and (2) 
do not benefit from the work that the employees perform. On the other 
hand,

[[Page 7881]]

if in a particular fact situation a PEO has the right to hire, fire, 
assign, or direct and control the employees, or benefits from the work 
that the employees perform, such a PEO would be a joint employer with 
the client employer. The proposal also includes a cross-reference in 
paragraph (d) to proposed Sec.  825.111(a)(3), which, as discussed 
below, would change the determination of the ``worksite'' for purposes 
of employee eligibility with respect to employees who are placed by a 
primary employer at the worksite of a secondary employer for more than 
12 months.

Section 825.108 (Public agency coverage)

    This section addresses what constitutes a ``public agency'' for 
purposes of coverage under the Act. Under the current regulations, the 
dispositive test for determining whether a public agency is a separate 
and distinct entity (and therefore a separate employer for determining 
employee eligibility) or simply is part of another public agency is the 
U.S. Bureau of the Census' ``Census of Governments.'' See U.S. Census 
Bureau, 2002 Census of Governments, Volume 1, Number 1, Government 
Organization, GC02(1)-1, U.S. Government Printing Office, Washington, 
DC 20002 \13\ (https://www.census.gov/prod/2003pubs/gc021x1.pdf). In 
contrast, regulations issued under the Fair Labor Standards Act (FLSA) 
use this test merely as one factor in determining what constitutes a 
separate public agency for its purposes. See 29 CFR 553.102. The 
Department proposes no changes to this section. Because the FMLA 
definition of ``public agency'' refers to the definition under the FLSA 
(29 U.S.C. 203(x)), however, the Department seeks public comment on 
whether this test in the FMLA regulations should be amended to conform 
with the test in the FLSA regulations.
---------------------------------------------------------------------------

    \13\ The Census of Governments is taken at five-year intervals.
---------------------------------------------------------------------------

Section 825.109 (Federal agency coverage)

    This section of the existing regulations identifies the Federal 
agencies that are covered by the Department of Labor's FMLA 
regulations. Shortly after these regulations were promulgated, Congress 
enacted the Congressional Accountability Act of 1995, 2 U.S.C. 1301 
(CAA), which in part amended the FMLA by repealing Title V of the FMLA 
pertaining to Congressional employees. See Section 504(b), Public Law 
104-1. As a result, Congressional employees are now covered by the CAA 
as administered by the Office of Compliance created by the CAA.
    Section 202(c) of the CAA also specifically provided that the 
General Accounting Office (now named the Government Accountability 
Office) (GAO) and Library of Congress (LOC) are subject to Title I of 
the FMLA. For those agencies, the FMLA is administered by the 
Comptroller General and the Librarian of Congress, respectively. See 29 
U.S.C. 2611(4)(A)(iv) and 2617(f).
    The CAA also called for a study of how the FMLA is administered for 
the Government Printing Office (GPO), as well as the GAO and LOC. 2 
U.S.C. 1371. The Congressional Office of Compliance issued its study on 
December 31, 1996. The study concluded that the GPO is covered by Title 
II and the Office of Personnel Management's regulations, rather than 
Title I and the Department of Labor regulations. In a letter dated 
April 25, 2000, the GPO asked the Department to amend its FMLA 
regulations to delete the reference to GPO coverage, because that 
agency is covered by Title II. In its response of January 31, 2001, the 
Department concurred with the conclusion that the GPO is covered by 
Title II and stated that it would amend the regulations accordingly 
whenever they were next modified. The proposal would amend paragraphs 
(a) and (d) of this section to reflect these changes.
    Pursuant to section 604(f) of the Postal Accountability and 
Enhancement Act, Public Law 109-435, Dec. 20, 2006, 120 Stat. 3242, the 
Postal Rate Commission was redesignated as the Postal Regulatory 
Commission, and the proposed rule would amend paragraph (b)(2) of this 
section to reflect this change.

Section 825.110 (``Eligible'' employee)

    Current Sec.  825.110 sets forth the eligibility standards 
employees must meet in order to take FMLA leave. Specifically, current 
Sec.  825.110(a) restates the statutory requirement that to be eligible 
for FMLA leave, an employee must have been employed by an employer for 
at least 12 months, have been employed for at least 1,250 hours of 
service during the 12 months preceding the leave, and be employed at a 
worksite where 50 or more employees are employed by the employer within 
75 miles of the worksite.
    Current Sec.  825.110(b) provides detail on the requirement that 
the employee must have been employed by the employer for at least 12 
months, stating that the 12 months need not be consecutive. It further 
explains that if the employee was maintained on the payroll for any 
part of a week, that week counts towards the employee's fulfilling the 
12 months employment requirement and that 52 weeks is deemed equal to 
12 months.
    In its RFI, the Department sought comment on whether and how to 
address the treatment of combining nonconsecutive periods of employment 
to meet the 12 months of employment requirement. (71 FR at 69508) This 
eligibility criterion has been the subject of litigation. In Rucker v. 
Lee Holding, Co., 471 F.3d 6 (1st Cir. 2006), the court considered 
whether an employee's previous employment of five years counted toward 
the 12-month employment eligibility requirement even though it was 
separated by a five-year break in service from his current employment. 
The First Circuit Court of Appeals held that ``the complete separation 
of an employee from his or her employer for a period of years, here 
five years, does not prevent the employee from counting earlier periods 
of employment toward satisfying the 12-month requirement.'' Id. at 13. 
In regard to whether a break in service of more than five years would 
be permissible, the court stated that this important policy issue 
should be resolved by the Department in the first instance as a part of 
its exercise of its statutory authority. Id.
    A number of commenters urged the Department to support the Rucker 
decision that prior months of service may be combined for eligibility 
purposes even when separated by breaks in service of many years. The 
National Partnership for Women & Families, for example, stated that 
``an arbitrary time limit on how long a worker could leave the 
employment of a particular employer would operate as an unfair and 
disproportionate burden on women workers. Many women leave work for 
extended periods of time, for example, to stay home with young children 
during their formative years.'' (See comments by National Partnership 
for Women & Families.)
    Employer comments received on this issue overwhelmingly disagreed 
with the First Circuit ruling on combining prior periods of service 
together. For example, the University of Notre Dame stated, ``There is 
a tremendous administrative burden associated with adopting the First 
Circuit Court of Appeals' interpretation of section 825.110 that an 
employer has the duty to aggregate non-consecutive service to establish 
`12 months of service.' As we understand this possible interpretation, 
the ability to aggregate past service with current service to equate to 
12 months

[[Page 7882]]

is virtually unlimited.'' Other comments received on this issue 
included suggestions for amending the regulations to allow the employer 
to: disregard prior employment periods if all ties between the company 
and worker were severed; follow company policy or State law regarding 
the treatment of previous employment; and require that the 12 months of 
employment be consecutive. Employer commenters cited the administrative 
burden associated with combining previous employment periods as the 
rationale for their recommendations including that the FMLA itself only 
requires recordkeeping for three years and not indefinitely.
    The Department received comments similar to these in response to 
the 1993 interim final regulations, which suggested limiting the period 
of time used in determining whether the employee had been employed by 
the employer for 12 months. In the final regulations, however, the 
Department declined to include such a limit, reasoning that ``[m]any 
employers require prospective employees to submit applications for 
employment which disclose employees' previous employment histories. 
Thus, the information regarding previous employment with an employer 
should be readily available and may be confirmed by the employer's 
records if a question arises.'' (60 FR at 2185) Furthermore, the 
Department did not find a basis under the statute or its legislative 
history for adopting the recommendations received in response to the 
Interim Final Rule. Id. Indeed, the statute does not directly address 
the issue of whether the 12 months of employment must be consecutive, 
and the legislative history provides limited insight into Congressional 
intent regarding extended breaks in employment. The Senate Committee 
Report in discussing the requirement that the employee must have worked 
for the employer for 12 months states ``[t]hese 12 months of employment 
need not have been consecutive.'' S. Rep. No. 103-3, at 23 (1993). The 
House Committee Report uses the same language in describing the 12-
month requirement. See H.R. Rep. No. 103-8, pt. 1, at 35 (1993).
    Based on the Department's experience in administering the FMLA, the 
First Circuit's ruling in Rucker, and comments received in response to 
the RFI, the Department proposes a new Sec.  825.110(b)(1) to provide 
that although the 12 months of employment need not be consecutive, 
employment prior to a continuous break in service of five years or more 
need not be counted. Thus, under the proposed rule, if an employee in 
2008 has worked five months for an employer and worked for the same 
employer for two full years in 1997-8, the employer would not have to 
consider the two years of prior employment in determining whether the 
employee currently is eligible for FMLA leave. The FMLA requires 
covered employers to maintain records for three years. 29 CFR 
825.500(b) (``[E]mployers must keep the records specified by these 
regulations for no less than three years and make them available for 
inspection, copying, and transcription by representatives of the 
Department of Labor upon request.''). The Department is not proposing 
to change the three-year record keeping requirements under FMLA. Thus, 
employers would have documentation to confirm previous employment for a 
former employee who at the time of rehiring had a break in service of 
three years or less. Where an employee relies on a period of employment 
that predates the employer's records, it will be incumbent upon the 
employee to put forth some proof of the prior employment. This is 
consistent with the employee's obligation to establish he or she is an 
eligible employee. See Novak v. MetroHealth Medical Center, 503 F.3d 
572, 577 (6th Cir. 2007); Burnett v. LFW, Inc., 472 F.3d 471, 477 (7th 
Cir. 2006). Of course, in determining whether an employee has met the 
eligibility criterion, an employer may have a policy to consider 
employment prior to a longer break in service, but in that event must 
do so in a uniform manner for all employees with similar breaks in 
service.
    The Department considered several alternatives in developing this 
proposed change to Sec.  825.110(b). Because the legislative history 
states that the 12 months of employment need not be consecutive, the 
Department could not adopt suggestions that any break in service 
``resets'' the count for determining whether the employee has met the 
12 months employment eligibility criterion. On the other hand, the 
Department believes it is not reasonable that the time frame used for 
considering prior employment for eligibility should be without end. At 
the same time, the Department is mindful of the comment by the National 
Partnership for Women & Families about the burden on women workers who 
may leave and reenter the workforce after the formative years of their 
children. But see S. Rep. No. 103-3, at 16 (1993). The Department 
believes that the proposed outer limit of a five year break in service 
is a permissible interpretation of the statute and strikes an 
appropriate balance between providing re-employed workers with FMLA 
protections and not making the administration of the Act unduly 
burdensome for employers.
    However, the Department also proposes new paragraph (b)(2) of this 
section to address two exceptions to the general rule contained in 
proposed new paragraph (b)(1): a break in service resulting from the 
employee's fulfillment of military obligations; and a period of 
approved absence or unpaid leave, such as for education or child-
rearing purposes, where a written agreement or collective bargaining 
agreement exists concerning the employer's intent to rehire the 
employee. In these situations, employment prior to the break in service 
must be used in determining whether the employee has been employed for 
at least 12 months, regardless of the length of the break in service.
    The current discussion of how weeks are counted for fulfilling the 
12 months requirement is proposed to be re-designated as paragraph 
(b)(3) of this section.
    Further, the Department proposes to add a new paragraph (b)(4) in 
this section to note that nothing prevents an employer from considering 
employment prior to a continuous break in service of more than five 
years when determining if an employee meets the 12-month employment 
criterion provided the employer does so uniformly with respect to all 
employees with similar breaks in service.
    Paragraph (c) of Sec.  825.110 is proposed to be revised to address 
hours an employee would have worked for his or her employer but for the 
employee's fulfillment of military service obligations. This revision 
codifies the protections and benefits offered by the Uniformed Services 
Employment and Reemployment Rights Act (USERRA).
    In addition, the Department proposes several changes to Sec.  
825.110 in light of the Ragsdale decision. Current Sec.  825.110(c) may 
result in some instances in employees who are ineligible for FMLA leave 
nonetheless being ``deemed eligible'' because of an employer's failure 
to meet its burden of maintaining records needed to establish the 
employee's eligibility. Current Sec.  825.110(d) may also result in an 
employee who is not eligible for FMLA leave being ``deemed eligible'' 
based on the employer's lack of (or incorrect) notice to the employee. 
Read in concert with Ragsdale, in which the U.S. Supreme Court 
invalidated a similar provision in the current Sec.  825.700(a),

[[Page 7883]]

the Department believes these provisions in current Sec.  825.110(c) 
and (d) need to be modified.
    On the other hand, the Court in Ragsdale suggested that if an 
employer fails to notify an employee of his or her FMLA rights, the 
employee may have a remedy if the employee can show that the employer 
interfered with, restrained or denied the employee the exercise of his 
or her FMLA rights and that the employee suffered damages as a result. 
See Ragsdale, 535 U.S. at 89. Therefore, the Department has 
incorporated into the proposed text of Sec.  825.300 a statement that 
in these situations if an employee shows individualized harm because 
the employer interferes with, restrains or denies the employee of his 
or her FMLA rights, the employee is entitled to the remedies provided 
by the statute. The Department also proposes to add this language to 
Sec.  825.220, which addresses how employees are protected when they 
assert their FMLA rights, and proposed Sec.  825.301, which addresses 
designation of FMLA leave.
    For organizational purposes, the notice provisions contained in 
current Sec.  825.110(d) have been moved to proposed Sec.  825.300(b) 
with other notice requirements employers must provide to employees 
under the regulations. This organizational change should make it easier 
for employees and employers to locate these requirements by 
consolidating them into one section. The proposal includes a cross-
reference to Sec.  825.300 in paragraph (d) of Sec.  825.110.
    The Department also proposes to clarify the language in current 
Sec.  825.110(d) stating that employee eligibility determinations 
``must be made as of the date leave commences.'' This language has led 
to confusion when employees who have fulfilled the 1,250 hours worked 
requirement for eligibility, but not the 12 months of employment 
requirement, begin a block of leave. (Although periods of leave do not 
count towards the 1,250 hour requirement because leave is not ``hours 
worked,'' periods of leave do count towards the 12 months of employment 
requirement because the employment relationship continues, and has not 
been severed, during the leave.) For example, where an employee who has 
worked for an employer for 11 months and 1,300 hours commences a three 
month block of leave for birth and bonding, confusion exists as to 
whether that portion of the leave that occurs after the employee 
reaches 12 months of employment is FMLA protected. Compare Babcock v. 
BellSouth Advertising and Publishing Corp., 348 F.3d 73 (4th Cir. 
2003), with Willemssen v. The Conveyor Co., 359 F.Supp.2d 813 (N.D. 
Iowa 2005). The proposal clarifies that when an employee is on leave at 
the time he or she meets the 12-month eligibility requirement, the 
period of leave prior to meeting the statutory requirement is non-FMLA 
leave and the period of leave after the statutory requirement is met is 
FMLA leave.
    The Department proposes to delete current Sec.  825.110(e), 
regarding counting periods of employment prior to the effective date of 
the FMLA, because the revisions proposed in Sec.  825.110(b) discussed 
above render the provision unnecessary.
    The Department proposes no changes to current paragraph (f) 
(paragraph (e) in the proposal) of this section, which states that 
whether an employee works for an employer who employs 50 or more 
employees within 75 miles of the worksite is determined as of the date 
the leave request is made. In the RFI, the Department sought comment on 
the differing regulatory tests used for determining employee 
eligibility: the determination of whether the employee has been 
employed for at least 12 months and for at least 1,250 hours in the 12 
months preceding the leave is made as of the date the leave is to 
commence; however, the determination of whether 50 employees are 
employed by the employer within 75 miles of the worksite is made as of 
the date the leave request is made (emphasis added). (71 FR at 69508). 
Some of the comments received in response to the RFI urged the 
Department to make these tests the same, namely, to require the 
determination of employee eligibility in both cases as of the date the 
leave is to begin. The Department appreciates the difficulty 
experienced by many employers in complying with these different 
regulatory tests; however, the proposal does not adopt this suggestion 
for the reasons discussed in the preamble to the 1995 final 
regulations:

    [T]he purpose and structure of FMLA's notice provisions 
intentionally encourage as much advance notice of an employee's need 
for leave as possible, to enable both the employer to plan for the 
absence and the employee to make necessary arrangements for the 
leave. Both parties are served by making this determination when the 
employee requests leave. Tying the worksite employee-count to the 
date leave commences as suggested could create the anomalous result 
of both the employee and employer planning for the leave, only to 
have it denied at the last moment before it starts if fewer than 50 
employees are employed within 75 miles of the worksite at that time. 
This would entirely defeat the notice and planning aspects that are 
so integral and indispensable to the FMLA leave process.

(60 FR at 2186)

Section 825.111 (Determining whether 50 employees are employed within 
75 miles)

    Current Sec.  825.111 sets forth the standards for determining 
whether an employer employs 50 employees within 75 miles for purposes 
of employee eligibility. Paragraph (a)(3) of this section provides that 
when an employee is jointly employed by two or more employers, the 
employee's worksite is the primary employer's office from which the 
employee is assigned or reports.
    In Harbert v. Healthcare Services Group, Inc., 391 F.3d 1140 (10th 
Cir. 2004), the Court of Appeals held that Sec.  825.111(a)(3), as 
applied to the situation of an employee with a long-term fixed worksite 
at a facility of the secondary employer, was arbitrary and capricious 
because it: (1) Contravened the plain meaning of the term ``worksite'' 
as the place where an employee actually works (as opposed to the 
location of the long-term care placement agency from which Harbert was 
assigned); (2) contradicted Congressional intent that if any employer, 
large or small, has no significant pool of employees nearby (within 75 
miles) to cover for an absent employee, that employer should not be 
required to provide FMLA leave to that employee; and (3) created an 
arbitrary distinction between sole and joint employers.
    The court noted that Congress did not define the term ``worksite'' 
in the FMLA, and it concluded that the common understanding of the term 
``worksite'' is the site where the employee works. With respect to the 
employee eligibility requirement of 50 employees within 75 miles, the 
court noted that Congress recognized that even potentially large 
employers may have difficulty finding temporary replacements for 
employees who work at geographically scattered locations. The court 
stated that Congress determined that if any employer (large or small) 
has no significant pool of employees in close geographic proximity to 
cover for an absent employee, that employer should not be required to 
provide FMLA leave to that employee. Therefore, the court concluded:

    An employer's ability to replace a particular employee during 
his or her period of leave will depend on where that employee must 
perform his or her work. In general, therefore, the congressional 
purpose underlying the 50/75 provision is not effected if the 
``worksite'' of an employee who has a regular place of work is 
defined as any site other than that place.


[[Page 7884]]


391 F.3d at 1150.
    In comparing how the regulations apply the term ``worksite'' to 
joint employers and sole employers, the court stated:

    The challenged regulation also creates an arbitrary distinction 
between sole employers and joint employers. For example, if the 
employer is a company that operates a chain of convenience stores, 
the ``worksite'' of an employee hired to work at one of those 
convenience stores is that particular convenience store. See 58 Fed. 
Reg. 31794, 31798 (1993). If, on the other hand, the employer is a 
placement company that hires certain specialized employees to work 
at convenience stores owned by another entity (and therefore is 
considered a joint employer), the ``worksite'' of that same employee 
hired to work at that same convenience store is the office of the 
placement company.

Id.
    Importantly, the court did not invalidate the regulation with 
respect to employees who work out of their homes: ``We do not intend 
this statement to cast doubt on the portion of the agency's regulation 
defining the `worksite' of employees whose regular workplace is his or 
her home. See 29 C.F.R. Sec.  825.111(a)(2).'' Id. at 1150 n.1. Nor did 
the court invalidate the regulatory definition in Sec.  825.111(a)(3) 
with respect to employees of temporary help companies: ``An employee of 
a temporary help agency does not have a permanent, fixed worksite. It 
is therefore appropriate that the joint employment provision defines 
the `worksite' of a temporary employee as the temporary help office, 
rather than the various changing locations at which the temporary 
employee performs his or her work.'' Id. at 1153.
    The RFI requested specific information, in light of the court's 
decision in Harbert, on the definition in Sec.  825.111 for determining 
employer coverage under the statutory requirement that FMLA-covered 
employers must employ 50 employees within 75 miles.
    Some commenters who argued that the current regulations are sound 
and do not require change pointed to the legislative history that the 
term ``worksite'' is to be construed in the same manner as the term 
``single site of employment'' under the WARN Act and the regulations 
under that Act. See comments by AFL-CIO and National Partnership for 
Women & Families. The AFL-CIO agreed with the dissent in Harbert that 
the Secretary's interpretation of ``single site of employment'' under 
the WARN Act regulations as applying equally to employees with and 
without a fixed worksite is a ``permissible and reasonable 
interpretation'' and does not result in arbitrary differences between 
sole and joint employers under the FMLA. The National Partnership 
commented that the purpose of designating the primary office as the 
worksite is to ensure that the employer with the primary responsibility 
for the employee's assignment is the one held accountable for 
compliance with these regulations. The National Partnership stated that 
the same principles articulated in the regulations with regard to ``no 
fixed worksi