Confusion reigns over the status of "key employees" under the FMLA, what their reinstatement rights are, and what the employer’s notice requirements are. Today’s Advisor clears away the fog.
Who is a Key Employee?
A "key employee" is:
- Salaried
- FMLA-eligible (meets service requirements of 12 months and at least 1250 hours)
- FMLA-covered (employer is covered by FMLA, has 50 workers within a 75-mile radius)
- Among the highest paid 10 percent of all the employees employed by the employer within 75 miles of the employee’s worksite
Because of their high salary, and because they often have senior-level positions with critical responsibilities, the FMLA gives companies a little more leeway in how they handle leave for key employees. Most important, the law allows the company to deny reinstatement in certain circumstances.
However, due to the stringency of the requirements, in the vast majority of cases, key employees will be treated just like regular employees.
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Notice Requirements
When a key employee requests leave, the employer is required to inform the employee, in writing, of his or her status as a key employee. This notice should be made as soon as possible after leave is requested.
The employer must also, at the same time, tell the employee what the key employee designation means: a) that it is possible that the key employee might be denied reinstatement if the employer determines that substantial and grievous economic injury to the employer’s operations will result from reinstatement, and b) that the employee’s benefits during leave won’t be affected.
If the notice cannot be given immediately because of the need to determine whether the employee is a key employee, it must be given as soon as practicable after being notified of a need for leave.
Important: Key employee status does not mean that an employer may deny leave to key employees. It’s only reinstatement after leave that is at issue.
The Notice Must Be Timely
The notice requirement must be observed in a timely manner. If the employer does not notify key employees of their status within a reasonable amount of time after they request leave, the employer loses the right to deny reinstatement, and the employees retain full job reinstatement protection under the regular provisions of the FMLA, just as if they were not key employees.
DOL points out that it expects that in most circumstances there will be no desire that an employee be denied restoration after FMLA leave and, therefore, there would be no need to provide notice to a key employee.
Denial of Reinstatement
A key employee may be denied reinstatement if—and only if—returning that employee to his or her job would cause "substantial and grievous economic injury" to the employer’s business operations. The employer determines what situations count as true economic injury; however, the legal threshold is quite high, so denial of reinstatement is not common.
Notice of Intent to Deny Reinstatement
As soon as the employers makes a "good faith" determination, based on facts available, that a key employee’s reinstatement would cause them economic injury, the employer must inform the key employee, in writing, that the company intends to deny job reinstatement at the end of the leave.
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The notification must include a statement that the employer cannot deny FMLA leave and that it intends to deny restoration on completion of the leave. It also must include an explanation of why reinstating the key employee would cause such serious economic injury to the company. The notice must be delivered in person or by certified mail.
Typically, this decision and notice should take place before leave begins, but because business situations sometimes change, notice may be delivered during leave.
In tomorrow’s Advisor, we’ll cover the key employee’s options after receiving a notice of intent to deny reinstatement, and we’ll take a look at an FMLA program that’s been updated to explain all of the dramatic changes in FMLA management.
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