Devising the Right Maternity/Paternity Leave Policy for Your Business

When an employee announces she’s pregnant, her employer better be able to deliver more than just congratulations. You need legally sound, consistent policies and practices to ward off potential pregnancy complications of your own.

It’s important to know what you must do—and what you can’t do (or say)—under federal anti-discrimination and leave laws. Plus, it’s vital to understand your own state statute, which may provide more liberal leave benefits for pregnant women and new parents.

While no federal law requires you to provide paid maternity leave, most employers must comply with the Pregnancy Discrimination Act (PDA) and the Family and Medical Leave Act (FMLA). And even the Americans with Disabilities Act (ADA) may come into play if pregnancy complications rise to the level of substantially limiting a major life activity.

Here’s how best to comply with those laws, plus a sample policy you can adapt to your own organization.

Pregnancy discrimination

The PDA prohibits discrimination against employees and applicants on the basis of “pregnancy, childbirth, and related medical conditions.” Any employer that’s subject to Title VII of the Civil Rights Act of 1964 (i.e., has 15 or more employees) must comply with the PDA.

Under the law, you can’t deny a woman a job or a promotion merely because she’s pregnant or has had an abortion. Nor can you fire her because of her condition or force her to go on leave as long as she’s physically capable of performing her job.

In short, the law requires you to treat pregnant employees the same as other employees on the basis of their ability or inability to work. That means you must provide the same accommodations for an expectant worker that you do for any employees unable to perform their regular duties. For example, if you provide other work for an employee who can’t lift heavy boxes because of a bad back, you must make similar arrangements for a pregnant employee.

Caution: Employers that use light-duty programs to cut workers’ compensation costs often make one big legal mistake: They haphazardly apply their policies, allowing some employees to take light-duty jobs, but not others. That inconsistency is the fastest way to trigger discrimination lawsuits from employees who may need light-duty positions temporarily for other reasons, such as pregnancy.

In addition, the PDA requires you to provide sick leave and disability benefits on the same basis or conditions that apply to other employees who are granted leave for a temporary disability. Women who take maternity leave must be reinstated under the same conditions as employees returning from disability leave.

At the same time, you’re allowed to apply the same requirements that you impose on other employees. So, if you usually require employees to obtain a doctor’s note before allowing them to take sick leave and collect benefits, you can impose the same rule on pregnant employees.

Other key PDA provisions:

• You can’t exclude single women from maternity benefits.
• You must provide the same coverage for pregnancy-related conditions as you do for illnesses and disabilities.
• You can require a pregnant employee to use her vacation benefits before she can collect sick leave or disability pay, as long as you have the same requirement for employees absent for other types of disabilities or illnesses.
• Clauses excluding insurance coverage for a pre-existing condition (i.e., a condition that existed when the insured worker’s coverage took effect) can be extended to pregnancy, as long as the same restriction is applied to other conditions.
• You can’t force an employee with a single-coverage policy to purchase a family policy so as to be covered when she becomes pregnant. However, she should be allowed to switch to the family plan after the birth so that her child will be covered.

FMLA leave

When an employee becomes pregnant, her employer must also consider her right to take leave under the federal FMLA. Eligible employees can take up to 12 weeks of unpaid, job-protected FMLA leave for the birth, adoption or foster care of a child; caring for a child, spouse or parent with a serious health condition; or convalescence after an employee’s own serious health condition.

To qualify for FMLA leave, an employee must have worked for the same employer for at least 12 months (not necessarily continuously) and clocked at least 1,250 hours of service (slightly more than 24 hours per week) during the 12 months leading up to FMLA leave.

Any organization with 50 or more employees working within a 75-mile radius of the work site must comply with the FMLA.

New parents—both mothers and fathers—can take FMLA leave any time in the first 12 months after a child’s arrival. But employees must conclude their leave before the 12-month period ends. Presumably, the idea is that if a working mother takes her 12 weeks and then returns to work, the father can care for the child for the next 12 weeks.

What if both parents work for the same company? They’re entitled to a combined total of 12 weeks’ leave after the birth or adoption. In this case, each parent would have the difference between 12 weeks and the amount of leave they took for the child to use for any other legitimate FMLA reason in that year.

‘Serious health condition’

Keep in mind that employees can also use their allowable FMLA leave if they suffer complications during pregnancy or prenatal care that constitute a “serious health condition.” (The FMLA defines a “serious health condition” as “an illness, injury, impairment or any physical or mental condition that requires inpatient medical care or continuing treatment by a health care provider.”)

Reasonable accommodation under the ADA

A normal pregnancy is not considered a disability under the ADA. The law defines a disability as “a physical or mental impairment that substantially limits one or more major life activities.”

But if a woman experiences pregnancy complications that substantially limit a major life activity, she may be considered disabled under the ADA and, therefore, entitled to reasonable accommodation to perform her job.

Check your state law

Several states mandate more generous maternity and family leave than the FMLA (and some state laws apply to smaller employers). Here are a few examples:

• California, Hawaii, and New Jersey: Employees who are temporarily disabled for medical reasons, including pregnancy and childbirth, receive partial wage replacement in the form of temporary disability insurance benefits.
• Tennessee: Public and private employers that have eight or more workers must grant female employees 16 weeks’ leave for childbirth.
• Rhode Island: Public employers of 30 or more employees and private employers with 50 or more employees are required to offer 13 weeks of leave in any two calendar years for the birth or adoption of a child or the serious illness of a child, spouse or parent.

California’s provisions on pregnancy disability leave cover employers with as few as five employees. The leave is capped at four months. But it’s important to note that pregnancy disability leave comes, in addition, to leave taken under the California Family Rights Act (covering employers with 50 or more employees). So, an employee covered by both laws could in effect take four months of pregnancy disability leave and then 12 weeks of family leave to care for a new child.

Steer Clear of These Questions When Hiring New Employees

We recommend coming up with a list of questions before sitting down to interview a prospective employee. But before you get that interview started, be sure to double check that all the questions on your list are legal to ask under state and federal law.

The Equal Opportunity Employment Commission (EOEC) enforces a set of laws that prohibit companies from discriminating against applicants or employees due to their race, color, religion, sex, national origin, age, or disability. As a result, you cannot ask interview questions related to any of these areas.

Some of the following questions may seem innocent, but believe it or not, they are all prohibited by federal law:

1. What is your ethnic background?
2. Are you religious? What religion do you belong to?
3. How old are you?
4. What are your political beliefs?
5. Are you married?
6. Are you pregnant?
7. Do you have children? Do you have a plan for who will take care of them while you’re at work?
8. Are you planning on having children?
9. Where do you live?
10. Are you a U.S. citizen?

According to a Career Builder poll in 2015, around 1 in 5 managers has unwittingly asked an illegal interview question when hiring a new employee. This is significant, because if asked one of these questions, applicants could file a costly discriminatory lawsuit against your company.

Before you interview any prospective employee, take the time to be sure your list of questions doesn’t unknowingly tread into murky territory. If you need help figuring out what’s okay to ask, our consultants would be happy to help you put together a clean list of questions. Get in touch here.

A Small Business Guide: Holiday Vacation and Bonuses

In today’s competitive market, small-business owners have to do all they can to attract quality employees to their business, and one way to do that is to offer perks like vacation time and holiday bonuses. Having those benefits not only makes a company more appealing to employees, but employees come back more productive, focused, and dedicated. Here’s a guide to implementing paid-time-off policies and giving holiday bonuses in your business.

Vacation Time

Employer law is mandated by The Fair Labor Standards Act, and it doesn’t require all employers to offer paid vacation time. However, if you have 50 or more employees, you are required by the Family Medical Leave Act to provide certain employees with up to 12 weeks of unpaid leave each year. In addition, many employers offer paid time off for some holidays, like New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving, and Christmas, but it isn’t mandatory. If you want to enact a formal vacation time policy at your business, you can create one that best fits your business, and make it official by including it in your written company policies. Here are some of the things you will need to take into consideration:

• How much paid vacation time will you give? You can offer the same amount to all your employees, or associate how much vacation time they have with the number of years they have worked for you. For instance, you can give everyone two weeks a year of paid vacation time, or let them accumulate one week for every year on the job. Be sure to set a cap on the amount of time that can be accumulated.
• Who is eligible? Many policies require employees to work for six months to a year before becoming eligible for paid vacation time. Likewise, some employers only offer it to full-time employers, while others include their part-timers as well.
• How should requests to take vacation time be made? Should employees approach you or their manager directly, or do you prefer that they submit the request in writing?
• How far in advance should the request be made? Depending on your business, employees who request time off only a week in advance could negatively impact your business. Decide how long in advance you will need to plan for an employee absence, and ask for at least that amount of notice.
• Do you have the right to say no? Should the employee automatically expect time off to be granted, or should they expect that, if it’s not a convenient time for the business, the request may be denied? In addition, if you run a seasonal business, state in your policy that vacations won’t be allowed during busy times.
• Will vacation time roll over? Some employers allow their employees to roll unused days over for a limited amount of time, while others enact a “use it or lose it” policy.
• Will you pay for unused vacation time? What happens when employees leave your business with unused vacation time on the books? Some employers pay out the time in cash, while others expect employees to take the loss. In some states, you are required to compensate employees for unclaimed time, so be sure to check the labor laws in your state.

When putting together your company’s paid vacation policy, be sure to apply the same standards to all employees of the same classification, otherwise you could leave yourself open to a discrimination lawsuit.

Tips for Giving Holiday Bonuses

First, can you afford to give a bonus? During a 25-year span, one employer changed their yearly bonus offerings depending on each year’s earnings and profits. During lucrative years, employees enjoyed lavish holiday parties with high-priced raffle prizes and generous cash bonuses. In lean times, there were no cash bonuses, no party and no prizes.

If your company has without fail given holiday bonuses for a good number of years, but will be unable to the next, try to let employees know as early in the year as possible. Many employees count on that bonus check and factor it into their household budget as part of their yearly earnings.

Choose bonus amounts carefully and fairly. When determining bonus amounts, think “fair and equitable distribution.” In other words, bonuses should be consistent, given out uniformly and on an unbiased basis. Care should be taken that no worker feels unfairly shortchanged.

Include all workers. If at all possible, be sure that everyone working at your place of employment is recognized in some way during the holiday season. One four-month-long temp worker was crestfallen when the week-long employee in the cubicle next store received a bonus and she didn’t.

Give the gift of time. If your company can’t afford to give cash or gift bonuses this year, consider giving the gift of time — paid time off, that is. Time off with family and friends is something that virtually everyone could use more of. Employees will appreciate an extra day off or two to relax during the year-end holidays after all their hard work during the work year.