Up North--March-April 2010

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March-April 2010

SFM Up North
A publication from the Duluth offices of SFM Companies
Editor: Kathleen S. Bray, Attorney

THIS MONTH'S TOPICS:

When can an employee receive retraining as a benefit?
Employee may qualify for FMLA even if the 12 months of employment are non-consecutive
Use caution in making deductions from employees' paychecks

When can an employee receive retraining as a benefit?

An employee eligible for vocational rehabilitation services may seek retraining for a new skill set or vocation. Minnesota Statutes sec. 176.102 explains that the purpose of rehabilitation services is "to restore the injured employee so the employee may return to a job related to the employee's former employment or to a job in another work area which produces an economic status as close as possible to that the employee would have enjoyed without disability." Rehabilitation services may return employees to jobs that have a higher economic status than their pre-injury status, if the employee can show that this is necessary to increase the likelihood of reemployment. In evaluating an employee's "economic status" one looks at not only the opportunity for immediate income but also examines the opportunity for future income, depending on the employee's pre-injury job and profession.

If an employee participating in vocational rehabilitation services expresses interest in retraining benefits, the QRC has an obligation under the statute to give retraining equal consideration with other potential services. Therefore, employers may often see injured employees exploring retraining as an option while concurrently participating in job placement services. If it appears that job placement is unlikely to restore the employee to his or her pre-injury economic status, then retraining is more likely an alternative.

The employee has a limited time period within which to request retraining, with the time period related to how many weeks of temporary total and/or temporary partial disability benefits have been paid by the insurer. For example, an employee with an injury occurring on or after Oct. 1, 2008 must request retraining prior to payment of 208 weeks of combined temporary total and/or temporary partial disability benefits. Depending on the date of the injury, the time period to request retraining varies from 104 weeks to 208 weeks.

Once the employee determines what type of retraining he wants to pursue, the QRC puts together a proposed Retraining Plan for the parties' review and approval. The Minnesota Department of Labor and Industry then must review and approve the plan. Sometimes the Department will return the plan noting deficiencies that need to be corrected prior to approval (e.g. concerns with low vocational test scores that suggest employee may not succeed in the proposed retraining program). Four areas are evaluated by the courts in cases of disputed retraining plans:

The likelihood the employee has the interest and ability to succeed in the proposed course of study;
The reasonableness of retraining as compared to returning to work with the employer or other job placement activities;
Whether retraining is likely to result in reasonably attainable employment; and
Whether retraining is likely to produce an economic status as close as possible to that which the employee enjoyed without the disability.

If there is a concern by the employer and insurer regarding one of these areas, the plan may be denied, and the employee may file a Rehabilitation Request or Claim Petition requesting approval of the plan.

Employee may qualify for FMLA even if the 12 months of employment are non-consecutive

When evaluating eligibility for Family Medical Leave Act (FMLA) leave, employers initially determine whether they have sufficient number of employees to fall within the Act's parameters, confirm whether the employee worked for the employer for a 12-month period, and confirm whether the employee worked at least 1,250 hours during the 12 months immediately before the date FMLA leave begins. What employers covered by the FMLA may not know, is that the employee need not have worked a consecutive 12-month period in order to satisfy the requirement that they have worked for the employer for 12 months.

The U.S. Department of Labor's e-law guide to the FMLA explains that there are limits to how far back the calculation of time worked must go, in order to potentially satisfy the FMLA threshold:

"An employer need not count employment prior to a break in service of seven years or more unless there was a written agreement between the employer and employee (including a collective bargaining agreement) to rehire the employee, or the break in service was due to fulfillment of military service in the National Guard or Reserves."

The regulations (29 C.F.R. 825.110) note that employers may voluntarily consider periods of time more distant than seven years, but if they do so, they must do so uniformly for all employees.

As an example, if an employee seeking FMLA leave has only been working for the employer the past eight months on a full-time basis, therefore satisfying the 1,250 hours in the past 12 months criteria, the employer must determine whether the employee has any earlier employment periods that may be considered to meet the "worked for the employer for a 12-month period" criteria. If the employee in question was employed for the employer three years earlier, and had worked for at least four months during that stint, then the two employment periods combined would satisfy the threshold for eligibility under the FMLA.

Use caution in making deductions from employees' paychecks

Minnesota Statutes sec. 181.79 addresses when an employer may make deductions from an employee's regular paycheck. Specifically, the statute provides, in relevant part:

"No employer shall make any deduction, directly or indirectly, from the wages due or earned by any employee, who is not an independent contractor, for lost or stolen property, damage to property, or to recover any other claimed indebtedness running from employee to employer, unless the employee, after the loss has occurred or the claimed indebtedness has arisen, voluntarily authorizes the employer in writing to make the deduction or unless the employee is held liable in a court of competent jurisdiction for the loss or indebtedness." (emphasis added)

Even if authorization is obtained from the employee to make a deduction for damages, debt or loan, for example, the employee must authorize in writing the specific amount of the deduction for each pay period, and the employer must insure that the amount does not exceed limits established by garnishment and other wage execution laws.

Written authorization for wage deductions is not required if the deduction is addressed in a collective bargaining agreement, or outlined in certain rules applicable to employees who are commissioned salespeople. Deductions without written authorization also are allowed when the employee executes a written authorization prior to purchasing something from the employer or taking a loan from the employer, and the authorization prior to the transaction states that the amount shall be repaid in equal and regular intervals or upon termination of employment.

Regardless of the authorization, though, employers are prohibited from making most deductions that would bring the employee's gross wages below the minimum wage. If an employer is concerned that the deduction may result in a sub-minimum wage, the employer should check with its corporate counsel to determine whether the deduction is permissible under the circumstances. Improper deductions may result in the employer owing a penalty of up to twice the amount of the improper deduction.

NOTICE: The distribution and receipt of the information provided in this newsletter does not create or continue any attorney-client relationship. The information provided is general in nature and should not be treated as legal advice concerning any particular set of facts or circumstances. Recipients should consult with their attorney before acting on any information discussed in each issue.