Medical Leave and Hours of Service

[Guest jfreeborn]

Hello everyone:

I have a tricky medical leave and hours of service question. Participant died a year ago from an unsuccessful surgery while he was on medical leave. The plan language does not allow an employee to vest if the employee goes on leave, accumulates 1000 hours while on leave, and dies before returning to work. Essentially, the employee must return to work for at least a day to receive vesting credit for his leave time.

The critical language in the Plan states that:

“The employment of an Employee whose approved Leave of Absence is terminated without his returning to regular employment with the Company shall be terminated effective at the commencement of such Leave of Absence.”

As a result, participant's last day of employment for plan purposes is considered to be when he went on leave, not when he died.

Is it consistent with the Code and regs to do that?

[david rigby]

Don't know about Code/regs, but your provision is very common in my experience.

[Guest jfreeborn]

Don't know about Code/regs, but your provision is very common in my experience.

ok thanks. I was just concerned. It creates an unfortunate situation for the participant, but I just wanted to make sure it wasn't in violation of any regs I couldn't think of.

[GMK]

Is there anything to prevent a plan from adding a provision that for the purposes of vesting, etc., an employee who dies while on leave is treated as if the employee returned to work on the day before she/he died? Kinda like the USERRA clause for active duty personnel.

[Guest jfreeborn]

Is there anything to prevent a plan from adding a provision that for the purposes of vesting, etc., an employee who dies while on leave is treated as if the employee returned to work on the day before she/he died? Kinda like the USERRA clause for active duty personnel.

What provision is that that you are talking about?

[david rigby]

What provision is that that you are talking about?

GMK is suggesting that the plan can be amended to modify the definition of leave in the special case of death. Assuming the plan sponsor wants to make that modification.

[GMK]

Basically, the amendment would provide that for plan purposes (eligibility, vesting, benefit accrual ... you could include or exclude things as you wish or just say for all plan purposes), if an employee (or you could restrict this to only persons who are already participants) dies while on approved leave (or while on medical leave ...), the person is treated as if she/he returned to work the day before the death and then died.

If you were to do this, think about how broadly or narrowly you want this to apply.

Again, I do not know if there are any restrictions to adding this kind of clause, but someone out there does.

[tymesup]

Smells OK if the participant was not an HCE.