The Family and Medical Leave Act (FMLA) entitles eligible employees to take up to 12 weeks of unpaid, job-protected leave, over a one-year period. The leave may be for specified family and medical reasons, with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Up to 26 weeks leave is permitted to care for military service members under certain conditions.

A key phrase is “job-protected.” But as the law is written and has been interpreted since its enactment in 1993, job protection is not absolute. For example, the law doesn’t cover “key employees” when it comes to reinstatement. Key employees are defined as those who are salaried, and among the highest paid 10% of all the employees who work within a 75-mile radius of the employee’s worksite.

However, several strings are attached to that exemption. First, to deny “restoration” to a key employee, you must make a good-faith determination that reinstating the employee will cause “substantial and grievous economic injury” to your operations.

Justification Requirement

There’s more. If you foresee possibly denying reinstatement to that key employee, you need to give him or her written notice. You also need to explain your rationale for your tentative decision in writing (by registered mail), or in person.

If the leave has already begun when you issue this notice, the DOL requires that you “provide the employee a reasonable time in which to return to work, taking into account the circumstances, such as the length of the leave and the urgency of the need for the employee to return.”

None of this means, however, that the key person isn’t still entitled to the full 12 weeks of health coverage during the leave period — unless the employee informs you before the end of that period that he or she doesn’t intend to return to work.

Finally, at the end of the 12 weeks, the key person can still make a case for reinstatement, which you must evaluate before rendering a final decision about that individual’s employment.

Exceptions for Regular Employees

What about non-key employees?

The FMLA does allow you to deny reinstatement to such an employee in certain circumstances, for example, if that action would result in substantial economic injury to the employer and the employee would have been laid off anyway. Another example is when the employee’s entire shift is being eliminated. In any case, it must be demonstrably clear that you aren’t simply denying reinstatement due to the employee’s need to take advantage of the FMLA.

Here are some more exceptions when denial of job restoration may be permissible:

    • The employee was originally hired only for a specific period of time, or only to work on a stand-alone project,
    • The employee is no longer able to perform the essential functions of the job (although this determination could depend upon requirements of the Americans with Disabilities Act and state disability laws), or
    • Fraud is involved in the employee’s original request for FMLA leave.

When the circumstances dictate that the employee will be reinstated after the leave period, it must, according to the DOL, be to an “equivalent position … that is virtually identical to the employee’s former position in terms of pay, benefits and working conditions. It must involve the same or substantially similar duties and responsibilities, which must entail substantially equivalent skill, effort, responsibility and authority.”

Meaning of “Equivalent”

To some extent, “equivalent” is in the eye of the beholder. In addition to the description above, the DOL says the reinstated employee’s job must also have similar “status” to the original job, and:

    • The job must be in the same or a “geographically proximate” worksite,
    • The employee is generally entitled to return to the same shift, or the same or an equivalent work schedule, and
    • The employee must have the same or an equivalent opportunity for bonuses, profit-sharing and other similar discretionary and non-discretionary payments.

However, nothing prevents you from changing details such as the returning employee’s position, location or shift, if the changes better suit the current needs of that employee. Be aware, this determination is left to the employee, not the employer.

Finally, the FMLA recognizes “inevitable small differences” between jobs that are deemed equivalent. “The requirement that an employee be restored to the same or equivalent job … does not extend to de minimus, intangible or immeasurable aspects of the job,” the DOL states.

Under most circumstances employers are happy to see their employees return to work after an absence, so quibbling over the details of FMLA requirements is unnecessary. Nevertheless, the law is not one-sided, and it’s always good to know your rights as an employer for the occasional exception.