U.S. Representative Mimi Walters (R-CA) last week introduced bill H.R. 4219, "Workflex in the 21st Century Act," which, if passed, will create a voluntary program through which employers can opt to offer employees a predetermined amount of federal paid-leave and flexible-work (workflex) arrangements. Most importantly, however, the legislation preempts a participating employer's obligations under existing state and local paid leave and workplace-flexibility laws.

The Act would amend Section 3(1) of the Employee Retirement Income Security Act (ERISA) to create a new type of ERISA-governed plan: the qualified flexible workplace arrangement plan. This plan would need to provide at least a certain level of paid-leave benefits and include at least one flexible-work arrangement from a specified list. The Act aims to create plans that can take advantage of ERISA's preemption of state and local laws, with the goal of allowing multi-state employers the ability to establish a relatively uniform set of paid-leave and flex-time policies that are not subject to a patchwork of different regulatory requirements.

However, a qualified flexible workplace arrangement plan would be governed by ERISA—and as such, it would need to comply with standard provisions for such matters as documentation, reporting, disclosure, and fiduciary responsibility, and would be subject to ERISA's enforcement provisions.

The full extent of ERISA's preemption may yet need to be determined. Several states and many localities have adopted paid leave and workplace flexibility laws, including both paid- and unpaid-leave mandates. It is not clear whether adoption of a compliant qualified workflex plan would trigger preemption of state and local unpaid leave laws, such as family leave, or if it would only preempt paid leave laws. Also, nothing in the bill modifies an employer's obligation to comply with the federal Family and Medical Leave Act (FMLA). However, the bill states that employers could require federal paid leave to run concurrently with FMLA leave.

Paid Leave. The amount of paid leave an employer must offer under the Workflex Act is determined by the size of the employer and the tenure of the employee, as outlined in the table below. All employees would be entitled to paid leave after 90 days of employment. Part-time employees would be entitled to paid leave, but would receive a prorated amount based on the number of hours worked per week.

Minimum Number of Compensable Days of Leave per
Plan Year

Number of Employees

Employees with 5 or more years of service as of the beginning of the plan year

Employees with less than 5 years of service as of the beginning of the plan year

1,000­­+

20 days

16 days

250–999

18 days

14 days

50–249

15 days

13 days

Less than 50

14 days

12 days

 

Employers would be permitted to apply up to six federal or state holidays towards the paid leave requirement. In addition, an employer may offer paid leave to employees as a lump sum at the beginning of the year or allow employees to accrue paid leave throughout the year. Employers "may permit" accrued leave to roll over year to year and to be cashed out upon termination—these provisions are not mandated. An employer opting to comply with the Workflex Act would satisfy paid leave requirements for federal contractors.

Flexible Work Options. In addition to paid leave, compliance with the Act requires an employer to offer at least one of the following workflex options of their choosing to employees with at least one year of service and 1,000 hours worked:

  • Compressed work schedule (that allows employees to increase their daily hours to work a four-day workweek);

  • Bi-weekly work program (that allows employees to work a total of 80 hours over a two-week period);

  • Telecommuting program;

  • Flexible scheduling; or

  • Predictable schedules.

The bill is supported by the Society for Human Resource Management. It has been referred to the U.S. House Committee on Education and the Workforce. We will continue to monitor the bill as it moves through the legislative process and provide updates.

Ballard Spahr's Labor and Employment Group monitors the passage and implementation of federal and state employment laws and routinely assists clients in navigating and preparing for compliance with new laws, including the design, implementation, and administration of leave programs under the FMLA, ADA, disability plans, and state and local paid and unpaid leave laws.


Copyright © 2017 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.