Partner, Riordan & McKinzie

Kirk Maldonado, a lawyer in the Costa Mesa office of Riordan & McKinzie, specializes in employee benefits law and is closely following the Family and Medical Leave Act of 1993, which he does not see providing much benefit to either employees or employers. Maldonado, 43, doubts many workers will choose to take long periods of unpaid time off during a recession. He encourages businesses to write Washington to comment on the act’s regulations. He recently spoke with Times correspondent Debora Vrana.

*

Briefly, what does the Family and Medical Leave Act of 1993 mean for workers?

It allows employees to take a leave of absence of up to 12 weeks a year for certain purposes, such as medical leaves. Employees are entitled to employment rights upon returning from their leave and are entitled to receive medical coverage from their employer during their leave time.

Employees, both men and women, can take a leave of absence because of the birth of a child or the placement of a child with the employee for adoption. Leaves can be taken because of a serious health condition, which makes him or her unable to perform their job, or in order to care for a spouse, child, or parent if that family member has a serious health condition.

*

Does this apply to every employer?

No. In order to be subject to the act, a business must employ 50 or more employees on each working day during each of 20 or more work weeks in the current or past calendar year.

*

The regulations interpreting this act just came out. What do they say?

It’s important to realize that the Department of Labor, which has issued the regulations, did not enact the statute. The statue was enacted by Congress. The role of the Department of Labor is to interpret the act. Given the vague wording of the statute, a number of significant interpretive issues must be resolved in the regulations.

These regulations are out now in interim form, which means employers can submit comments to the Department of Labor and to ask them to reconsider some of the positions taken in those regulations. I would encourage employers to review the regulations and submit comments because some of the regulations are quite controversial.

*

Aren’t there some unresolved issues, especially regarding COBRA?

Yes. One question which has not been addressed is what happens when an employee goes on a leave of absence under the act and elects not to come back. The question is whether the employee health care continuation rights under the Consolidated Omnibus Budget Reconciliation Act of 1985, COBRA, start at the time of the leave or the time when the employee elected not to come back. This determination would impact who would pay for the health coverage during that leave. If the employee does not return, the employer could request repayment of those costs for that time period.

*

Given your background as a laborer, what are some of your concerns regarding this act?

Prior to attending law school, I was a blue-collar union worker for about five years in a cereal factory. Many of the workers formerly worked in the meatpacking plant in Omaha, where they had a very strong union and annually they would get raises and additional benefits. While this was attractive in the short term, in the long term it ended up hurting them, because the meatpacking plants were shut down.

I have some concern that the additional costs imposed upon employers of complying with the family and medical leave act, and other government-mandated programs, while beneficial to employees in the short run, may be detrimental in the long run by keeping employers from being competitive in the world marketplace. While these regulations have the best interest of the employees at heart, they do not take into account the competitive pressures of the marketplace.

*

But isn’t this act a boon to employees?

The act provides many rights and protections for employees. In the short run, however, I’m not sure how many employees will take advantage of the act. For example, California has had its own version of the act, and very few of my employees and employers have had success with such leaves. I think in today’s recessionary times, very few employees are interested in taking extended periods of unpaid leave.

*

What do you think of the regulations?

I think interpretations of the statute by the regulations tend to unnecessarily impose certain burdens on employers, which in certain instances may be unjustified. I would hope that because of comments made by employers, the Department of Labor will modify some of its positions in the final regulations.

*

Basically, you seem to be saying this act isn’t much good for employees or employers.

The additional costs and complexity of compliance of the act is burdensome for employers. There has been an increasing trend of cost-shifting in the past years from the government to employers. We are shifting the burden from the government onto private employers but this is not any net savings, only a shifting of the burden. It really doesn’t address underlying problems. The total costs are the same and that in my mind is not true reform and does not solve the problems long-term.

*

But isn’t this act a good thing if someone’s parent or child gets sick and wants time off, but doesn’t want to quit his or her job?

I didn’t mean to say it’s not good for employees, I mean it will not be widely used. It’s doubtful this act will spur many individuals to request leave. Under current California law, they have been able to take time off for similar circumstances and the law has not been widely used. The vast majority relate to pregnancies; it’s very unusual to encounter unpaid leave in other cases. It’s very rare. I would say 96% of the time it’s been pregnancies.

*

On the family leave act. . .

“It’s an anti-competitive measure. The more of these pressures that are added to business--such as the cost of providing health insurance and workers’ compensation costs--the less competitive we will be.”

*

On shifting health care expenses to employees. . .

“The most obvious method is for employees to pay higher premiums and have a higher deductible.”

*

On independent contractors. . .

“Employers are looking at the independent contractor status to avoid providing health care benefits. Many of the situations I have seen involving so-called independent contractors, the individuals were really employees.”

*

On posting family leave act notices. . .

“Few employers have taken such action and there are penalties involved for not posting this notice.”