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Workflex in the 21st Century Act Could Modernize ERISA With Telecommuting, Job-Sharing, and More

Author: Robert S. Ellerbrock, III (Birmingham)

Published Date: November 7, 2017

On November 2, 2017, U.S. Representative Mimi Walters (R-CA) introduced the Workflex in the 21st Century Act, a bill that would amend the Employee Retirement Income Security Act of 1974 (ERISA). The legislation would allow employers to create an ERISA plan, known as a qualified flexible workplace arrangement plan, to offer employees a combination of guaranteed paid leave and increased work flexibility options.

If an employer elects to offer a plan, the employer would be required to offer full-time and part-time employees at least a guaranteed minimum level of paid leave, basing the amount on both the employer’s size and the amount of service the employee had provided to the company. The legislation provides the following:

Number of employees employed by the employer Minimum paid leave for employees with more than five years of service Minimum paid leave for employees with fewer than five years of service
1,000 or more 20 days 16 days
250 – 999 18 days 14 days
50 – 249 15 days 13 days
Fewer than 50 14 days 12 days

The plan could be designed to allow employees to accrue leave over the course of a plan year or provide the full amount of leave at the start of the plan year. There are certain restrictions that would be allowed in the plan design with regard to employees’ right to leave during the first 90 days of employment.

In addition to guaranteed paid leave, an employer that elected to offer a qualified flexible workplace arrangement plan would be required to offer its employees at least one type of flexible work option. With regard to the flexible work options, eligible employees would have to be employed for at least 12 months by the employer and have worked at least 1,000 hours for the employer. The flexible work option could be one of the following: 

  • Compressed Work Schedule – Generally, this option would allow an employer to increase the number of daily hours that an employee would work in a week. For example, employees could have four-day workweeks.
  • Biweekly Work Program – Generally, this option would allow an employer to schedule eligible employees more than 40 hours but less than 60 hours in any week during a two-week period, provided that such employee was not scheduled for more than 80 hours during that two-week period. Other conditions may apply.
  • Telecommuting Program
  • Job-Sharing Program
  • Flexible Scheduling

While legislating paid leave is not a novel concept at the state and local levels, this proposal to amend ERISA to allow for plans that include paid leave and flexible work schedules is unique. As with other ERISA-covered benefits, offering a qualified flexible workplace arrangement plan would be completely voluntary for employers, and employers would have to weigh the benefits of offering such a plan. There would be costs associated with offering a qualified flexible workplace arrangement plan, as it appears that such a plan would not be exempt from the documentation and reporting requirement of ERISA. However, such a plan would provide employers with a certainty regarding employee paid leave because ERISA preempts state laws, and it would alleviate the necessity of state-by-state compliance for paid leave programs.

It is important to note that the legislation would not affect coverage protections provided by the Family and Medical Leave Act or similar state laws. This legislation is meant to be complimentary to such laws.

Remember that this legislation is just a proposal, and there is no guarantee that it will pass or what it will look like in final form. It is worth noting that the proposed legislation appears to have bipartisan support, as well as the support of the Society for Human Resource Management, the Progressive Policy Institute, and the Republican Main Street Partnership.

Robert S. Ellerbrock, III  (Birmingham)

Robert S. Ellerbrock, III
Bob Ellerbrock focuses his practice on employee benefits and ERISA.  He regularly  advises clients concerning qualified retirement plans (401(k), defined benefit, 403(b)),  non-qualified plans, fringe benefits, health and welfare benefits, Affordable Care Act compliance,  and executive compensation issues. With experience in the retirement plan industry prior to practicing law, Bob draws on his knowledge counseling clients in the design and implementation of all types of employee benefit plans.
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