How to Select an FMLA Leave Year That Works for Your Business?

The Family and Medical Leave Act (FMLA) gives eligible employees up to 12 weeks of unpaid, job-protected leave each year for purposes such as caring for a new child, recovering from a serious health condition, or supporting a family member with medical needs. But what does “each year” actually mean? That’s where it can get a bit complicated.

There are four methods for defining the FMLA leave year. Your choice will impact how leave is tracked, workflow, and employee expectations. This article summarizes these options. It will help you choose the method that best suits your business, ensuring compliance and fairness.

Understanding Your Options: The 4 Ways to Set an FMLA Leave Year

The Family and Medical Leave Act (FMLA) allows eligible employees to take unpaid, job-protected leave for family and medical reasons. Employers can choose from four methods to define the 12-month period for FMLA leave:

1. The Calendar Year: This method uses the standard calendar year, from January to December.

2. Any Fixed 12-Month Period: Employers can choose any fixed 12-month period, such as the company’s fiscal year.

3. A 12-Month Period Starting When Leave Begins: The 12-month period starts on the first day the employee takes FMLA leave.

4. A Rolling 12-Month Period: This method calculates the 12-month period based on when the employee uses leave, looking back from each leave date.

Choosing the right method is important for managing leave and ensuring compliance with the law.

Overview of FMLA Leave Time Calculations

The FMLA provides up to 12 weeks of unpaid, job-protected leave per year for eligible employees due to personal or family health issues, such as a serious illness, caring for a family member, or bonding with a new child.

In addition, FMLA includes a military caregiver leave provision, which allows eligible employees to take up to 26 weeks of unpaid leave in 12 months to care for an injured or ill service member who is their spouse, child, or parent.

Understanding the FMLA leave year and its calculations helps both employers and employees manage leave effectively.

Different Methods for Defining the FMLA Leave Year

Employers can choose from four different 12-month period options for defining the FMLA leave year, as outlined below.

• Calendar Year
  With this method, the 12-week FMLA leave resets every January 1. This approach is easy to administer, but it can lead to “stacking” of leave, where an employee takes 12 weeks of leave at the end of one year and then another 12 weeks at the start of the new year. This can result in a longer absence than intended, which some employers try to avoid.

• Fixed 12-Month Period
  Employers can choose any fixed 12-month period, such as the company’s fiscal year, a state-mandated year, or an employee’s anniversary date. This method also makes it easier to track, but similar to the calendar year, stacking is possible if an employee’s leave crosses into a new period.

• 12-Month Period Measured Forward
  In this option, an employee’s 12-month period begins the first day they take FMLA leave. The next period starts when they take another FMLA leave after the first one ends. This method helps prevent extended leave periods, but stacking can still occur if the leave is taken over different months.

• Rolling 12-Month Period (Look-Back Method)
  The rolling 12-month method, also known as the "look-back" method, tracks FMLA usage by looking back 12 months from the date an employee takes leave. This method helps prevent extended leave periods but can be more complex to track. Each time an employee uses leave, the employer calculates how much FMLA leave was taken in the past 12 months and subtracts that from the employee's total 12-week entitlement. The remaining balance is the employee’s available leave.
  
  

Example of How the Rolling 12-Month FMLA Period Works

Here’s a simpler explanation of how the rolling 12-month period works, using a hypothetical example with an employee named Patricia who plans to start her FMLA leave on November 1. 

When Patricia starts her leave on November 1, she has 12 workweeks of FMLA leave available, minus any leave she has already taken in the past 12 months. The look-back period covers November 2 of the previous year to November 1 of the current year. During this period, Patricia used four workweeks in January, four in March, and three in June. By November 1, she has one week of FMLA leave left. If she uses that week in November, she can start taking more leave on January 1, when her January leave from the previous year is no longer counted.

Another way to understand the rolling 12-month period is that employees "regain" their FMLA leave one year after they use it. For example, Patricia will get back her January leave on January 1 of the following year, her March leave on March 1, and so on. Employers need to check employees' FMLA eligibility carefully whenever they request leave, as the amount of available leave can change depending on what has already been used in the last 12 months.

Additional Requirements for Managing FMLA Leave

Employers must carefully consider defining the 12-month period for FMLA leave to ensure compliance with federal and state regulations. This section covers the key requirements for selecting the right method for tracking FMLA leave, notifying employees about the method chosen, and the steps involved if the method needs to be changed. Clear communication and consistency are essential for employers and employees to manage leave effectively.

Consistent Method for All Employees

Employers are generally required to use the same 12-month FMLA period for all employees. However, if an employer operates in multiple states and one of those states has specific rules for the FMLA leave period, the employer may use the state-required method for employees in that state while applying a different method for employees in other states. If an employer doesn’t select one of the four approved methods for the 12-month period, they must use the method that provides the most benefit to the employee.

Notifying Employees

Employers must provide written notice to eligible employees about the method they have selected for the FMLA 12-month period. This notice should be given through the FMLA Rights and Responsibilities Notice.

Changing the FMLA Method

Employers are allowed to change the method they use to measure the 12-month FMLA period, but they must notify employees at least 60 days before making the change. The transition must guarantee that employees retain access to the full 12 weeks of leave under the method that provides them with the greatest benefit.

FMLA Year Selection: Key Tips for Employers

When choosing an FMLA leave year, employers should consider the advantages and disadvantages of each of the four available methods. Employers who prioritize ease of communication and administration may find the calendar year or a fixed 12-month period most suitable. Those who expect employees to take military caregiver leave might find a leave year that begins when the leave becomes more efficient. The rolling 12-month period may be the best option for employers concerned about extended, continuous leave.

Employers must consistently communicate the chosen method for all employees in the FMLA Rights and Responsibilities Notice. If no method is selected, employers must default to the process that offers the most benefit to employees.

What Your FMLA Year Choice Means for Your Business

Choosing how to define your FMLA leave year isn’t a one-time checkbox. It affects your operations, leave tracking, and how employees plan time off. Whether focused on easier administration or preventing long, back-to-back absences, the method you choose should reflect your priorities and be applied consistently.

At Custom Benefit Consultants, Inc. (CBC), we help businesses align their FMLA approach with real-world needs. If you review your leave policies or update your compliance strategy, we can walk you through your options and help you build a clear, enforceable process.

Need help figuring out the best FMLA setup for your team? Reach out to CBC to get started.

FAQs

Q1: How Does the Rolling 12-Month Period Method Prevent Extended Leave Periods?

A1: The Rolling 12-Month Period calculates FMLA leave by looking back 12 months from when an employee requests leave. This helps prevent an employee from taking multiple extended leave periods by limiting how much leave they can take based on their usage in the previous year.

Q2: Can an Employee Use FMLA Leave at Different Times During the 12-Month Period?

A2: Employees can take FMLA leave in smaller increments or for intermittent periods if they have remaining leave under the selected FMLA method. The method chosen will determine how much leave is available for each period.

Q3: What if an Employee Takes Military Caregiver Leave?

A3: If an employee qualifies for military caregiver leave, they can take up to 26 weeks of unpaid leave within a 12-month period. Employers can align the FMLA leave year with the military caregiver leave period to make it easier to manage, depending on the method chosen.

Q4: Are There Any Tax Implications When Managing FMLA Leave?

A4: While FMLA leave is generally unpaid, employers should ensure compliance with any applicable state or federal tax regulations regarding employee benefits during leave. Some states may have paid family leave programs that may affect the financial aspects of FMLA leave.

Q5: What if I’m Unsure Which FMLA Leave Year Method Is Best for My Business?

A5: If you are uncertain about which method to choose, consider consulting with a benefits consultant or legal expert such as CBC. At Custom Benefit Consultants, Inc. (CBC), we specialize in helping businesses make informed decisions that align with their goals. Contact us today for expert guidance and to develop a clear, efficient FMLA strategy that fits your business's needs.