Who is Considered an FMLA "Key Employee"?
Under the Family and Medical Leave Act (“FMLA”), eligible employees are entitled to take up to 12 weeks of protected leave every year to attend to certain medical and family matters. They are also entitled to 26 weeks to care for a family member injured during military service.
- The employee must have been employed with the company for 12 months.
- The employee must have worked at least 1,250 hours during the 12 months prior to the start of FMLA leave.
- The employer is one who employs 50 or more employees within a 75-mile radius of the worksite.
Employees who are eligible for FMLA-leave are generally entitled to continued health insurance benefits. They are also entitled to job restoration to the same or an equivalent job upon the completion of their leave. Key employees are an exception to this rule.
What is a “Key Employee?”
“Key employees” are eligible to take FMLA with continued health insurance coverage. However, the company has the right to deny reinstatement if it determines that “restoration of the employee to employment will cause substantial and grievous economic injury to the operations of the employer.”
A key employee is a salaried, FMLA-eligible employee who is among the highest paid 10 percent of all the employees within 75 miles of the worksite. To determine the top ten percent of earners, the company must take into account all forms of payment including “wages, premium pay, incentive pay, and non-discretionary and discretionary bonuses.” This calculation must be made as of the date the key employee gives notice of leave.
What is Substantial and Grievous Economic Injury?
The economic injury involved in a key employee is defined by the impact of the reinstatement of that employee, not their absence during the leave. There is no exact test for substantial and grievous injury, as every situation is unique.
Importantly, employers must determine if they can find a temporary replacement to take on the employee's responsibilities during the leave. If a permanent replacement is inevitable, there may be significant economic injury if the company must pay both the replacement's and original employee's salaries when the employee returns.
Notice Requirements for Key Employees
An employer who believes that reinstatement may be denied to a key employee must give written notice to the employee. This notice must be given at the time the employee gives notice of the need for FMLA leave (or when FMLA leave commences, if earlier). The employer must then give a second written notice as soon as it intends to deny restoration.
Upon learning that an employer believes that an employee is a key employee, the employee must be given a reasonable amount of time to return. Even if a key employee doesn’t return to work in response to the employer’s notice, they may still request reinstatement at the expiration of their leave.
Upon a key employee’s request for reinstatement, the employer must perform a third evaluation at that time to reevaluate whether reinstating the employee would cause significant economic harm.
To learn more about key employees and the FMLA, check of the Department of Labor’s website: https://www.dol.gov/agencies/whd/fmla/law