Thinking of Outsourcing your FMLA and ADA Administration?
Let’s start with the basics—what are these two statutes? In very basic terms:
The Family Medical Leave Act (FMLA) requires employers with at least 50* employees to provide 12 weeks of unpaid leave for a qualifying medical condition experienced by the employee or their immediate family member. It requires covered employers to provide up to 26 weeks of unpaid leave for a qualifying military exigency. The FMLA also prohibits employers from interfering with employees’ exercise of their FMLA rights, and prohibits retaliation against any employee because they exercised their FMLA rights. You can learn more about employer responsibilities under the FMLA here: https://www.dol.gov/agencies/whd/fmla/employer-guide
The Americans with Disabilities Act (ADA) applies to companies with at least 15* employees and mandates employers make reasonable accommodations for an employee’s or applicant’s disability so that they have equal opportunity to participate in the interviewing process and in employment. The ADA bars discrimination based on an employee’s disability, the employer’s perception that an employee is disabled (even if they are not disabled) or the employee’s association with a disabled person (e.g. their disabled child). The ADA further bars retaliation against any employee who exercises their ADA rights. You can learn more about the ADA here: https://www.eeoc.gov/publications/ada-your-responsibilities-employer.
*Several states and localities have decreased this employee threshold. For example, a Philadelphia employer with only one employee is subject to the requirements of the ADA as they are included in the Philadelphia Fair Practices Ordinance.”
Internal ADA and FMLA Administration can be Costly and Risky
A small to medium sized company, say 200-1000 employees, usually requires a dedicated HR Generalist with requisite experience in HR compliance to effectively administer these functions, along with an experienced HR Director to ensure effective oversight. A smaller company needs a highly experienced HR person in this role to ensure ADA and FMLA compliance as part of their overall job duties. Nonetheless, despite the expertise of your HR staff, internal administration carries significant risks for employers.
While on the surface, these statutes seem fairly straightforward to observe, in reality they are a minefield for employers for several reasons, the most important of which is a foreseeable discrimination or retaliation lawsuit. The average FMLA or ADA lawsuit usually discloses that the plaintiff has been diagnosed with an FMLA or ADA qualifying condition and was subsequently terminated or demoted under circumstances raising an inference of discrimination or retaliation. These circumstances usually include employer conduct related to the Plaintiff’s reasons for exercising their FMLA or ADA rights. For example, a supervisor made prior (unasked for) modifications to the employee’s job duties to accommodate the employee’s disability or serious medical condition, and the employee now claims that those modifications contributed to the employer’s termination decision. However, if the employer is never made aware of the employee’s underlying disability of serious medical condition because this function is entirely outsourced and a separate entity collects this information to determine the employee’s eligibility for FMLA or ADA protections, then any subsequent lawsuit can often be dismissed at the pleading stage which is far less expensive than going through discovery or ultimately a trial.
Here are some of the internal risks that outsourcing your ADA and FMLA functions can overcome:
Employer notice of employee current disability or serious medical condition;
Employer notice of employee’s irrelevant medical history;
Employee hesitancy to initiate the interactive process even though an accommodation or leave could improve their performance on the job;
Employers are quick to dismiss an accommodation request as inherently unreasonable without laying the necessary and sometimes labor intensive groundwork to establish that they have engaged in the interactive process as required.
1. Employers rarely have policies in place to limit the sharing of medical information among employees.
Many employee handbooks and other company policies advise employees to raise any issues with their direct supervisor. This is a prudent policy when it comes to general workplace issues such as an argument with a coworker, but sharing information about serious medical conditions or disabilities with a supervisor is likely to affect the supervisor’s conduct towards the employee, unless the supervisor has had sufficient training on the mandates of the ADA or FMLA. For example, a healthcare worker (who often has to lift patients or support their weight) tells her supervisor that she has suffered a back injury and has to leave early once a week for physical therapy. A well-intentioned supervisor may immediately start trying to modify the employee’s work conditions to avoid risk of further injury to the employee, such as delegating lifting to coworkers. Another supervisor may roll her eyes at the employee’s announcement and say “I guess you want special treatment now.” Neither of these approaches ultimately helps the employer, and the more prudent approach is to withhold as much information as possible from supervisors so they cannot engage in conduct which may be evidence of discriminatory motive or retaliation. FMLA and ADA outsourcing lets employees reach out directly to the Administering entity without ever having to notify any employer staff of their medical condition or disability.
2. Healthcare Provider Certifications often put employers on notice of medical issues of which they were previously unaware.
In order to comply with the FMLA or ADA, employers simply need to know that the employee has an FMLA or ADA qualifying condition and the leave dates or frequency, or accommodation required to ensure equal opportunity. The employer does not need to know the underlying condition nor the patient’s medical history some of which may not be relevant but will be disclosed by the employee’s healthcare provider. For example, if an employee requires intermittent leave for cancer treatment, the employer does not need to know that the employee’s certifying healthcare provider previously treated the employee for asthma or diabetes. When your ADA and FMLA functions are outsourced, you simply learn that the employee has a qualifying condition and to what they are entitled under the statutes.
3. The employer’s participation in the interactive or FMLA process can be highly emotional for the employee and can lead to long term dissatisfaction with the employer, particularly when the requested accommodation or leave is denied.
When an employee initiates the interactive process, they are usually exposing a serious vulnerability to their employer. This often carries feelings of shame, embarrassment or helplessness for the employee and it can diminish their own self-image. Conversely, an employee who has been alerted of performance deficiencies may be reluctant to initiate the interactive process because of fear that their request will be the “last straw” and lead to their termination, even though their performance deficiencies may be cured by being granted a reasonable accommodation. In contrast, when the employee knows they can deal with a third party who is not going to share their personal medical information with the employer, they are more likely to seek assistance, which may ultimately result in increased performance and employee retention. Further, if the Administrator denies their request based on ineligibility or unreasonableness, they will be less likely to attribute this denial to the employer.
4. The ADA interactive process can be a liability minefield for employers.
Employers have a very fine line they need to walk to ensure ADA compliance. On the one hand they need to observe their employees’ ADA rights and grant reasonable workplace accommodations; but on the other, they need to run their businesses, maintain workplace morale, and comply with their internal policies and procedures. Sometimes it’s difficult for the employer to effectively decipher whether an accommodation request is legitimate or simply an excuse for a change in workplace conditions or policies. Over the last couple of years we have dealt with a number of accommodation requests demanding an ongoing work from home schedule as the only possible accommodation for the employee’s particular disability. Some of these may be legitimate but a lot were not, and once we drilled down on scope of limitations with the employee’s healthcare provider, we were able to structure a different accommodation which was both reasonable for the employer and also mitigated the employee’s limitations. When we perform these inquiries, the information shared by the healthcare provider stays with us and is not shared with the employer, so the employee cannot then plausibly claim that they are subject to a hostile work environment or other adverse employment action because the employer is aware of their mental health triggers or other limitations. Most importantly, we perform the fact finding and analysis to determine whether an accommodation is reasonable or not and preserve this written record in case of a future claim of discrimination when an employer denies a requested accommodation and instead grants another effective accommodation that is more reasonable to provide.
If you are looking to explore outsourcing your ADA or FMLA functions, contact us for a confidential consultation.
What to Look out for when Outsourcing your ADA and FMLA Compliance
Picking the right HR services company is essential when outsourcing these risky HR functions
Labor law compliance is rarely black and white, and it is even more complicated with a statute like the ADA that requires the interactive process. Thus, the most important attribute to seek is comprehensive experience in FMLA administration, and even more so with ADA administration. The average cost to defend an ADA claim without going to trial is approximately $75,000; with trial it can exceed $125,000 and these amounts do not include any settlement, appeal or damages award. In fact ADA claims are the single largest share of EEOC discrimination claims making up 34% of all EEOC claims, ahead of sex discrimination, race discrimination and age discrimination.
Here are some common red flags to look out for when dealing with an external ADA or FMLA administrator:
Red Flag #1: The company just pushes paper around: If all the administrator will do is send out forms and collect them then share them with you with some useless advice such as “if this is a reasonable accommodation it should be granted” then you do not have an experienced FMLA or ADA administrator. Any clerk can collect paper and give you this advice which is applicable in any ADA accommodation request case. The experienced administrator will not share the completed certifications with you absent your express request to review them and they will guide you step by step through the interactive process ensuring adequate documentation to demonstrate that a requested accommodation is unreasonable, and other steps to take to ensure that the employer can effectively defend a baseless claim.
Red Flag #2: You are speaking to a different person every time you have a question or the person seems to be reading off a script when you ask a question. While there’s nothing wrong with a company having a lot of employees, you should have a designated person for your account who knows the ins and outs of your business, how it operates, your industry, your consumer base, and so on. All those things are relevant to responding to an ADA accommodation request. If you need to remind your ADA administrator how you operate or why your consumers would be harmed if a certain accommodation is granted, you may want to consider looking around for a better fit.
Red Flag #3: The person on the other end of the phone cannot provide you with viable alternative solutions to accommodate your employee’s limitations. While an employee can ask for a desired accommodation, they are not entitled to that accommodation provided the employer can provide another accommodation that also allows the employee to perform the essential functions of their job. Employers are usually embedded in their routines and methods of operation that can make it challenging for them to come up with flexible solutions that cause minimal disruption but accommodate the disabled employee. An experienced ADA administrator should be able to suggest alternative accommodations that work well for the employer and employee, and support those alternatives with communication from the employee’s healthcare provider.
Red Flag #4: The third-party administrator cannot perform the role as if they were your internal administrator. This means the company providing this function should be comfortable being the first-line of contact for any ADA or FMLA claim, rather than waiting for a referral from your HR personnel, if you desire, and should also be comfortable leading the communication with the employee’s healthcare provider, the employee, and you, the employer. Further, the third party administrator should have the flexibility to memorialize use of leave as you require, whether they enter it into your HRIS, send you leave reports or simply confirm it on a weekly or monthly basis.
Red Flag #5: The third party administrator has difficulty advising you on how to address an employee’s disability when you bring a concern to them, rather than the employee seeking an accommodation. There are times when it is apparent to an employer that an employee’s disability is interfering with the employee’s ability to perform the essential functions of their job. This is especially problematic with untreated mental health disabilities which may manifest as poor performance, insubordination or other unexpected inappropriate workplace conduct. In these cases, your administrator should be able to guide you through a disciplinary process or initiate a disability inquiry that does not run afoul of the ADA.
If you are looking for an experienced third-party ADA and FMLA administrator to reduce your risk of liability for ADA or FMLA violations, contact us for a confidential consultation.
