Get access to the exclusive HR Resources you need to succeed in 2018.
Sign up for free email newsletters and get more SHRM content delivered to your inbox.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 14 cities across the U.S. this fall.
Gain the skills you need to rise to the next level in your career. Jon us at SHRM's Leadership Development Forum, October 2-3 in Boston.
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
An employer must pay the cafeteria plan allotment for an employee taking time off under the Family and Medical Leave Act (FMLA), according to a Department of Labor (DOL) opinion letter released Feb. 21.
A city offered its employees a cafeteria plan, allocating to each employee $452.08 per month to pay the premium for one of the city’s group health plans. The balance could be used, at the worker’s option, to provide dental/disability/life insurance or compensation.
Cafeteria plans let participants pay health insurance premiums on a pre-tax basis. Most small businesses are, however, unable to meet the nondiscrimination cafeteria plan rules due to their size.
The city did not provide the cafeteria plan allotment for workers on unpaid FMLA leave, until a union challenged this policy and the city wrote the DOL for an opinion. The city asked whether the FMLA requires it to continue cafeteria plan health payments for an employee on unpaid FMLA leave if city policy requires all employees on unpaid leave of any kind to make their own group health coverage payments.
The city maintained that if it paid the cafeteria plan allotment for an employee on unpaid FMLA leave, it would be discriminating against employees on other types of unpaid leave whose cafeteria plan allotments are not paid. Regardless, the DOL said the cafeteria plan allotment had to be paid during FMLA leave.
The FMLA and its regulations require maintenance on the same conditions of any group health coverage, regardless of whether it is provided through a flexible spending account or other component of a cafeteria plan, the DOL stated. As a result, the DOL concluded that “employees taking unpaid FMLA leave must have that portion of their cafeteria plan allotment allocated to group health insurance (including dental) premiums paid by the city in the same amount as paid prior to the start of FMLA leave.”
The city could not recover the cafeteria plan payments for periods of FMLA leave, the DOL added (FLSA 2006-3-A).
It reminded the city that its opinion letter is based exclusively on the facts and circumstances the city described. Existence of any other factual or historical background not contained in the city’s letter might require a different conclusion, the DOL cautioned.
Allen Smith, J.D., is senior legal editor for HR News.
FMLA and Other Leave Toolkit
Benefits Design, SHRM White Paper, June 2002.
Internal Revenue Service final rule on the effect of the FMLA on cafeteria plans, Federal Register, Oct. 17, 2001.
For the latest HR-related business and government news, go daily to www.shrm.org/hrnews
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
HR Professional Development Education in a City Near You
SHRM’s HR Vendor Directory contains over 10,000 companies