Small Business and Maternity Leave Issues

Fettner Thompson serves small businesses and entrepreneurs in the Houston, Texas area. One question that has been asked by businesses over the years is: “How should we handle maternity leave?”  The answer to that question varies depending on a number of factors, the most important of which how many employees the business has and whether the employee handbook addresses the situation. Another important issue is whether there is a contract between the employee in question and the business. If there is a contract, the contract ordinarily (but not always) is the controlling document when it comes to questions regarding maternity leave.  The policies in the employee handbook should be followed if the handbook addresses maternity leave.

If the employer has less than 50 employees, the Family Medical Leave Act (“FMLA”) does not apply and an employer must treat its pregnant employees the same way it treats employees who are “temporarily disabled.”  The EEOC provides guidelines to the Pregnancy Discrimination Act and states,

“when a pregnant woman is out on a maternity leave, she must receive the same type and scope of benefits as any other temporarily disabled worker. For example, if the employer continues payment of pension benefits, health insurance premiums for a temporarily disabled worker while on leave, the employer must do the same for a woman on pregnancy leave.”

This, however, does not require an employer to pay the worker while on leave, unless other workers are paid while on temporary disability leave.  If an employer has an employee handbook or policy manual that explains the terms of leave for short term disability, the policies stated in the handbook or manual will apply.  If it specifies the policy for leave due to pregnancy, that will apply (unless it is discriminatory against pregnant women, in which case the policy used for other disabilities will be used).

If an employer has more than 50 employees the FMLA applies. To qualify for FMLA leave, the employee must have been employed by that business for at least one year and must have worked at least 1,250 hours in the 12 months prior to taking the leave.  The employer is required to give eligible employees up to 12 weeks of unpaid leave in a 12 month period for a covered event, which includes pregnancy.  Employers may require the worker to use all accrued paid leave before applying the FMLA leave.  The worker will return to the same job at the same compensation.

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