FMLA-14 — Multi-employer health plan/Employer ceasing operations

U.S. Department of Labor
Employment Standards Administration
Wage and Hour Division
Washington, D.C. 20210

November 3, 1993 FMLA-14

Dear
Name*,

During a recent meeting in which the provisions of the Family and Medical Leave Act of 1993 (FMLA) was
discussed, a question was posed regarding the obligation of an employer whose employees are covered
by a multi-employer benefit plan to maintain group health insurance during a period of unpaid leave. The
question arose in the context that the employer had ceased all operations on a particular construction
project for the winter and all employees had been laid off. This action takes place during a period when
an employee is on unpaid FMLA leave.

The FMLA generally provides that an employer must maintain group health insurance for an employee
taking FMLA leave in the same manner and at the same level as was provided on the date leave
commences. During the discussions in Congress leading up to the passage of the FMLA, congress
specifically addressed the special circumstances relating to employees covered by a multi-employer plan,
as reflected in the legislative history.

An employer whose employees are provided benefits through the operation of a multi-employer plan must
continue to make contributions during FMLA leave unless the employer demonstrates that the employee
would not otherwise have been employed. Coverage by the health plan must continue at the level
coverage would have been continued if the employee continued to be employed, unless it is
demonstrated that the employee would not otherwise have been employed by the employer or any other
member employer of the plan. An employer is otherwise relieved of making contributions to the plan on
behalf of an employee taking unpaid FMLA leave if the plan expressly provides for some other method of
maintaining coverage for a period of leave required by the FMLA.

In direct response to the question, if the employer whose employees receive benefits pursuant to a
multi-employer plan ceases activity and all employees on that job are laid off the employer may
discontinue contributions on behalf of an employee taking unpaid FMLA leave if the employer can
demonstrate the employee would not have continued to be employed by either the employer or another
employer who is a member of the same plan.

Of course, if the employer closes one construction site, lays off all employees, but moves those
employees to another site to continue employment, the employer must continue to make contributions on
behalf of the employee taking FMLA leave as it is reasonable to assume the employee would have
continued employment at the alternate site as well.

Hopefully this has been responsive to the question. If further assistance is needed please contact me at
telephone 219-8412.

Sincerely,

J. DEAN SPEER
Director, Division of Policy and Analysis

* Note: The actual name(s) was removed to preserve privacy in accordance with 5 U.S.C. 552 (b)(7).
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