Heard It on the Hotline: Handling "Key Employee" Requests for FMLA

Q: Can we deny a request for leave under the federal Family and Medical Leave Act (FMLA) for an employee because they hold a key role within the organization?

A: No, you cannot deny leave simply because someone holds a key role within the organization. The FMLA contains subparts that address job restoration rights, however, for those considered to be a “key employee.” To be considered a key employee, the following criteria must be met:

• The employee must work for a covered employer.
• The employee must be eligible for FMLA.
• The employee must be paid on a salary basis.
• The employee must be among the highest paid 10 percent of all employees, both eligible and not eligible, salaried and non-salaried, employees included within a 75-mile radius of the employee’s worksite.

In determining whether the employee meets the top 10 percent compensation level, employers should include wages, premium pay, incentive pay, and bonuses. The calculation should be done at the time the employee gives notice of the need for leave. The employer should use the employee’s year-to-date earnings divided by the number of weeks worked. Weeks in which paid leave was used should be included.

Once an employer determines that their employee meets the criteria of a key employee, the employer must notify the employee in writing that they have: 1) been identified as a key employee, and 2) whether job restoration at the conclusion of their leave will cause substantial and grievous economic injury to the business. This notice must be served in person or via certified mail and must include the basis for the decision. The key employee clause does not permit the employer to deny the leave; rather, it permits a denial of the reinstatement if job restoration after the taking of leave will cause substantial and grievous harm.

At the conclusion of their FMLA leave, the key employee may still request reinstatement from the employer. The employer must again analyze whether reinstatement would cause substantial and grievous economic injury to the organization. The employer’s determination must be provided to the key employee in writing.

Proving substantial and grievous injury or harm is different and more stringent than the "undue hardship" test under the Americans with Disabilities Act (ADA). Therefore, employers must proceed with extreme caution when determining their ability to use the key employee provision to deny an employee’s reinstatement.