FMLA: Key Employee Provision – Job Reinstatement or Not?

KeyEmployee.BLOGIt’s critical for those in your organization who administer leave under the Family and Medical Leave Act (FMLA) to understand the “key” employee provision so you don’t run afoul of the law.

It’s a common misunderstanding that “key” employees are not eligible for FMLA. What the law actually limits is the right of key employees to job reinstatement when they return from leave. Review the major aspects of the provision below to ensure you get it right in your organization.

When an employee applies for FMLA, you must first determine whether he or she is a key employee. According to the regulations, a “key” employee is “among the highest paid 10 percent” of all employees—both salaried and non-salaried, FMLA eligible and ineligible—whom you employ within 75 miles of the worksite.

If you determine you are dealing with a key employee who may be denied reinstatement, you must provide a written notice of this fact when you receive notification of the need for FMLA leave. At the same time, you must notify the employee “of the potential consequences with respect to reinstatement and maintenance of health benefits if [you] should determine that substantial and grievous economic injury to the employer’s operations will result if the employee is reinstated from FMLA leave.”

In the event you determine that such economic injury would occur if you were to reinstate the employee after FMLA leave, you must notify the employee of this determination in writing. The notification must state that the company cannot deny FMLA leave, but that you intend to deny job restoration at the end of the leave. This notice must be served in person or by certified mail, and it must explain your basis for finding that “substantial and grievous economic injury” would result from reinstatement.

If the employee has already departed on leave, the notice must give him or her reasonable time—in light of the circumstances—to forego leave and return to work.

If you fail to timely provide this notice, you will be unable to deny reinstatement. Additionally, when the key employee completes FMLA leave, he or she may still request reinstatement. In that case, you’ll need to revisit the decision and provide a second written notice to the employee regarding the request. 

Again, the key-employee provision does not allow you to deny FMLA leave; rather, it provides an avenue to deny job reinstatement at the conclusion of FMLA leave. While it may be beneficial in some cases to use this exception, employers must ensure they meet the substantial and grievous economic injury standard and comply with all notice requirements.

These are complex waters to navigate. MSEC’s attorneys are here to assist with all of your FMLA issues.