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Are You a “Key Employee” Under the FMLA?

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 and up to 26 weeks to care for a family member injured during military service.  FMLA eligibility requires the following criteria:

  • 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 and to be restored to their former job (or to 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 employed by the employer within 75 miles of the employee’s 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.

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 at the time the employee gives notice of the need for FMLA leave (or when FMLA leave commences, if earlier) that he or she qualifies as a key employee.  The employer must then give a second written notice as soon as it determines that the substantial and grievous economic injury test will be met and that 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, knowing he or she may no longer have a position upon the end of his or her leave.

Even if a key employee doesn’t return to work in response to the employer’s notice that reinstatement may be denied, the employee may still request reinstatement at the expiration of his or her 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/whd/fmla/