From the Labor & Employment Practice.

Standard Requirement Under Many Bonus and Commission Plans No Longer Valid Under The Maryland Wage Payment Law – At Least For Now

January, 2017

(Labor & Employment Newsletter – 2002)

In Ragsdale v. Wolverine World Wide, Inc. (March 19, 2002), the Supreme Court ended the dispute over a controversial Department of Labor (“DOL”) regulation that provided employers a grand total of “one or two business days” to designate an employee’s leave from work as qualifying under the Family and Medical Leave Act of 1993 (“FMLA”).

The Family and Medical Leave Act of 1993 allows, among other things, eligible employees 12 weeks of leave in a 12 month period when the leave is needed due to the employee’s own “serious health condition” or to care for a family member with a “serious health condition.”.

The controversial DOL regulation promulgated under the FMLA provided employers “one or two business days” to designate an employee’s leave as FMLA-qualifying only after that employee provided minimal notice of the need for leave.

The regulation also imposed, however, a draconian sanction for noncompliance: FMLA-qualifying leave taken prior to designation could not be counted against the 12-week period. As a result, an employer with more generous leave policies than required by the FMLA was considered in violation of the statute if it made the simple mistake (most frequently in my experience through inadvertent administrative error) of failing to designate the leave as FMLA leave and then discharging the employee under its more generous leave policies long after the 12 week FMLA period had been exhausted.

Prior to Ragsdale, the state of the law on the regulation was nothing short of a jumbled mess; while many federal courts struck it down, quite a few others upheld it as valid. In Ragsdale, the Supreme Court finally stated that there was “no logical or empirical basis” for the DOL’s regulation, and that DOL itself was “blind to reality” under the facts of the case before the Court.

Read in its entirety, the Ragsdale decision itself is complicated and deals with many nuances in administrative law and regulation. The result, however, is simple. According to the Court, the statute means what it says: 12 weeks of FMLA-qualifying leave in a 12 month period – no more, no less.

However, for the sake of administering the FMLA and tracking leave that qualifies under the statute at your company, our advice as so aptly summarized by Semmes’ Principal Rick Scheiner remains the same: “when in doubt, do not hesitate – designate!”