HR Management & Compliance

Mastering Tough FMLA Issues: Employees Who Don’t Have Restoration Rights

This article series addresses some of the most confusing real world problems surrounding the Family and Medical Leave Act (FMLA). In the last installment, we discussed situations in which employees have job restoration rights upon returning from leave.  In this article, we’ll look employees who do not have job restoration rights once they return from leave.


Not all employees are entitled to job restoration. Employees who cannot perform an essential function of their job aren’t entitled to restoration, although they may be entitled to protection under the Americans with Disabilities Act, state leave laws, or a collective bargaining or other agreement. The law provides that, in certain situations, specific individual employees, as well as specific groups of employees, do not have to be reinstated to their jobs.

You may deny reinstatement:

  • Until or unless an employee provides a fitness-for-duty medical certification, when you have requested this certification prior to the commencement of the leave and when the leave was taken for the employee’s own serious health condition.
  • If you can show that the employee would not have remained employed if leave had not been taken. Note, an employee’s right to continued leave, health benefits, and job restoration ends, if and when the employment relationship would otherwise end (e.g., layoff) unless the employee remains on paid FMLA leave. The employment relationship begins again if the employee is reinstated, provided the employee is an eligible employee.
  • If an employee unequivocally advises you of his or her intent not to return to work.
  • If an employee fraudulently obtains leave.
  • If an employee violates a uniformly applied policy governing outside or supplemental employment while the employee is on leave (i.e., “moonlighting”).
  • Under certain limited conditions pertaining to “key employees.”

Key Employees

Key employees, defined as eligible salaried (executive, administrative, professional, and computer) employees who are among the highest-paid 10 percent of all employees within 75 miles of the worksite, are not entitled to reinstatement under the FMLA.

If returning a key employee to her job will cause your company substantial and grievous economic injury, you may refuse to reinstate her after any FMLA leave. There is no precise definition for “substantial and grievous economic injury,” although the regulations point out that minor inconveniences and costs don’t count and the standard is tougher than “undue hardship” under the Americans with Disabilities Act.

The “substantial and grievous economic injury” standard determines only whether you are required to restore the employee to her current or equivalent job; it does not give you a right to deny leave due to any hardship her absence will create.

eOne possible factor is whether it’s possible to temporarily replace the key employee or do without her services. If only a permanent replacement would take the job, you may consider the cost of reinstating the key employee in evaluating whether reinstatement will cause substantial, grievous economic injury. You also may consider the effect of reinstatement on your organization’s economic viability.

To use the key employee exception, follow these steps:

  • Notify the employee in writing of her status as a “key” employee as soon as practicable once you receive notice of her intent to take FMLA leave, or when the leave begins. Also at this time, notify her of the potential consequences in connection with reinstatement and maintenance of health benefits if you determine that her reinstatement will cause substantial and grievous economic injury. If you can’t give this notice in timely fashion, you will have to restore her to her job, despite economic consequences.
  • Notify in writing as soon as the organization decides it will deny job restoration, and explain the reasons for this decision. The regulation anticipates that this notice generally will be given before the employee starts to take leave. This notice must be delivered in person or by certified mail and must explain the basis for finding that substantial, grievous economic injury will result.
  • Offer a reasonable time to return to work from FMLA leave after giving this notice.
  • Make a final decision on whether to deny reinstatement at the end of the leave period if the employee requests reinstatement, as is her right despite a finding of economic injury and despite her not returning to work per the previous step. Notice of this decision must be in writing, delivered in person or by certified mail.

Key employees continue to have FMLA rights under U.S. Department of Labor (DOL) regulations unless and until they either give notice that they won’t return to work or you actually deny reinstatement at the end of the leave period.

Layoffs, Restructurings, and the Like

An employee on FMLA leave has no greater right to reinstatement or other terms and conditions of employment than if he hadn’t taken leave. But if you deny reinstatement for a reason like a reduction in force, you will have the burden of showing that he wouldn’t otherwise have been employed at the time he requested reinstatement.

The timing of any decision to restructure, reduce the workforce, lay off employees, or eliminate a position in relation to the affected employee’s request for or taking of FMLA leave will be considered by any court asked to decide if he was discriminated or retaliated against for requesting or taking leave. That’s why firing employees during or at the end of FMLA leave is particularly risky.

It is in your best interests to notify the employee immediately if you have determined that he is being laid off or the job is being eliminated. The reason behind this is that your obligation to continue health insurance benefits and the job restoration rights ceases once the employee is laid off or terminated. Also, it is just good management practice to be up-front with your employees and keep them apprised of changes in their jobs.

Be sure to offer any employee who is laid off or terminated, including those on FMLA leave, information about their rights to continue their health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) and any applicable state law.

If, by chance, you do find your company is now being investigated by the DOL for FMLA interference, the next installment will help you effectively manage these types of investigations.