On March 25, 2013, SHRM filed an amicus brief in the U.S. Court of Appeals for the Sixth Circuit in Sherfel v. Newson. In the Sherfel case, SHRM asked the court to uphold the lower court’s decision finding that the federal Employee Retirement Income Security Act of 1974 (ERISA) pre-empts the leave substitution provision of the Wisconsin Family and Medical Leave Act (WFMLA).
In this case, Nationwide Insurance Company offered a benefit plan that provided disability income benefits to employees who become disabled and are unable to work. Wisconsin is among a handful of states that have family and medical leave acts that parallel the federal FMLA. Wisconsin’s statute, however, contains a substitution-of-leave provision that is more expansive than its federal counterpart, allowing employees on leave to substitute paid or unpaid leave of “any other type” provided by the employer.
When an associate at Nationwide employed in Wisconsin requested to substitute short-term disability (STD) benefits for her unpaid WFMLA leave during time off to care for her newborn child, the Wisconsin Department of Workforce Development ordered Nationwide to pay the STD benefit under the WFMLA even though the associate did not qualify for disability benefits under Nationwide’s disability plan.
SHRM’s brief argues that the WFMLA’s substitution procedure thwarts ERISA’s uniformity policy and makes benefits administration cumbersome and inefficient, particularly for multi-state employers. SHRM’s brief is available HERE.