April 11, 2008 The Honorable Victoria A. Lipnic Assistant Secretary for Employment Standards Employment Standards Administration U.S.

Department of Labor, Room S2321 200 Constitution Avenue, NW Washington, DC 20210 Submitted electronically via Regulations.gov RE: Notice of Proposed Rulemaking on the Family and Medical Leave Act of 1993 (73 Fed. Reg. 7876) Dear Assistant Secretary Lipnic: The Institute for Liberty (IFL) thanks you for the opportunity to offer comments on the Department of Labor’s (DOL) proposal to change its regulations under the Family and Medical Leave Act (FMLA). The Institute for Liberty is a non-profit 501c(4) organization. We focus on federal executive branch policy, specifically the intersection of regulatory policy and small business and entrepreneurship. The rulemaking at hand is an important one. Labor regulations, because of their pervasive nature, impact the widest cross-section of small businesses. While not as complex as environmental or occupational safety and health regulations, they nevertheless require a certain degree of expertise. In fact, it is well-recognized that the first regulatory “professional” hired by a small business is someone skilled in labor and employment law. We were encouraged by the fact that DOL is considering changes to the FMLA. The initial regulations under FMLA were conceived fifteen years ago, and it is important for agencies to reopen and re-examine regulations from time to time. We were less encouraged, however, by the substance of the proposed reforms, as they fail to correct two key deficiencies in the underlying regulatory regime. The Definition of “Serious Health Condition” The FMLA's medical leave has not worked as intended due to the DOL’s implementing regulations and interpretations. The Labor Department has been inconsistent and vague in its regulations and opinion letters leaving employers and employees guessing as to what the agency and the courts will deem to be a “serious” health condition. One year, the Department issued an opinion letter stating that the cold, the flu and non-migraine headaches were not serious health conditions (Wage and Hour Opinion Letter, FMLA-57, April 7, 1995). The next year, the DOL issued an opinion letter stating that they might be (Wage and

Hour Opinion Letter, FMLA-86, December 12, 1996). This has been very confusing to both employers and employees. The Labor Department should also rescind Wage and Hour Serious Health Condition Opinion Letter #86 which has caused enormous confusion in the workplace. In terms of “serious health conditions”, the SBA’s Office of Advocacy had the following to say: DOL’s FMLA regulations section 825.114(c) states that “ordinarily, unless complications arise, the common cold, the flu, earaches, upset stomach, minor ulcers… etc., are examples of conditions that do not meet the definition of a serious health condition and do not qualify for FMLA leave.” In 1996, DOL issued conflicting opinion letter 86,codified in section 825.114(a), which stated that these minor health conditions could meet the criteria for a serious health condition if there was a period of incapacity for more than three days and treatment by a health care provider. Advocacy recommends that DOL consider reforming the definition of a “serious health condition” pursuant to small business comments. Although DOL did not clarify the definition of a “serious health condition,” Advocacy does support DOL’s proposal to clarify the time frames for practitioner’s visits that would qualify as a “continuing treatment” for two definitions of a serious health condition: incapacity in excess of three consecutive days and chronic conditions. Under DOL’s proposals, for a period of incapacity of more than three consecutive calendar days, the proposal clarifies that an employee must have two visits to a health care provider within 30 days of the beginning of the period of incapacity unless extenuating circumstances exist. For chronic conditions, the proposal clarifies that “periodic visits” to a health care provider is defined as twice or more a year. Advocacy is pleased that DOL is clarifying these terms that have open-ended time frames in the current regulations, because it provides guidance to the business community and may lead to less abuse of these provisions by employees. Advocacy recommends that DOL consider additional reforms of these provisions recommended by small business representatives.1 Intermittent Leave Under the FMLA The FMLA's intermittent leave regulations have also been unnecessarily problematic and have diverted important resources. Allowing an employer to require an employee to take intermittent leave in increments of one-half of a work day would ease the burden significantly for employers both in terms of necessary paperwork and with respect to being able to cover efficiently for employees who are absent. Moreover, the total allotted time allowed for incremental leave presents an unreasonable burden on the productivity for a small business. We believe that for far too long, agencies have gotten away with making incremental changes to regulations, because they have no requirement to assess those incremental changes in the context of overall regulatory burden, despite the fact that it is these incremental changes that present the greatest difficulties for a small business.
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http://www.sba.gov/advo/laws/comments/dol08_0407.html

In this instance, DOL believes that because they are mandating “unpaid” leave, there is little or no direct monetary cost to the small business. But simply because the businesses aren’t paying directly for this leave does not mean that there is no cost. Far from it. If we take the 50 employee number, and multiply it by 40 hours of unpaid leave, we are left with 2000 hours. 2000 hours is one year of time for a “full-time equivalent”. Essentially, a business is losing one employee’s productive time. Let’s assume for a moment that an average employee for this firm contributes $100 per hour to the firm’s ultimate bottom line. This means that the firm would be losing $200,000. The Need for A Section 610 Review Because of the potential for increased burdens on small business, IFL recommends that the DOL conduct a review of the FMLA’s current burden on small business, pursuant to Section 610 of the Regulatory Flexibility Act (RFA). The lookback provisions of Section 610 are an essential tool in helping to ensure that small businesses are protected from an overbearing regulatory state. As Advocacy has stated: Section 610 of the RFA requires agencies to retrospectively review all regulations which have or will have a significant economic impact on a substantial number of small entities within 10 years of their adoption as final rules. The purpose of this review is to determine whether such rules should be continued without change, or should be amended or rescinded, consistent with the stated objectives of applicable statues, to minimize any significant economic impact of the rules upon a substantial number of small entities. Under a Section 610 review, the agency shall consider the following factors: (1) the continued need for the rule; (2) the nature of complaints or comments received concerning the rule from the public; (3) the complexity of the rule; (4) the extent to which the rule overlaps, duplicates, or conflicts with other Federal rules, and, to the extent feasible, with State and local government rules; and (5) the length of time since the rule has been evaluated or the degree to which the technology, economic conditions, or other factors have changed in the area affected by the rule.2

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Id.

Conclusion Given the potential for an increased number of small businesses falling under the rubric of the FMLA, now is the time to correct the underlying problems with the regulation. It is also time to engage in a serious review of the regulation’s current impact. Thank you again for the opportunity to comment on these regulations. If you have any questions or require additional information, please contact the Institute for Liberty at (703) 980-8989. Sincerely, Andrew M. Langer, President

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