Last time I talked about how to determine if an employee is a “key employee” under the Family and Medical Leave Act. This time, we’re going to talk about the actual steps you need to take in order to invoke this exemption.golden-key

There are very specific, mandatory notice requirements that apply. 29 C.F.R. Section 825.219(a) requires an employer to notify the employee of the employee’s status as a “key employee,” that it may deny reinstatement following FMLA leave if it determines that substantial and grievous economic injury will occur, and the potential consequences with respect to the maintenance of health benefits. This requirement may be met by checking off the appropriate provision on the DOL’s model “Notice of Eligibility and Rights & Responsibilities,” WH-381. (Are you using the DOL’s model forms? If not, why not? They’re actually pretty good – and I have never seen an individualized employer-prepared form that was any better! In fact, most employer-prepared forms that I’ve seen have various problems. Big ones.)

The employer should give this first notice as soon as it is able to determine that the employee is a key employee. Hopefully, this should happen when the employee gives notice of the need for leave, but may occur after the leave begins if the employer needs time to make that determination. Please note that if the employer fails to give timely notice, the employer will not be able to deny restoration – even if there is substantial and grievous economic injury!!!Continue Reading The Rules on the Key Employee Exemption Under the FMLA (Part II)

I’m an Family and Medical Leave Act geek – I find the twists and turns and intricacies of this law and its regulations just fascinating. ( I know, that’s really geeky). I was recently advising a client on the key employee exemption under the FMLA, which reminded me of how technical the rules are with regard to this particular issue. I thought some of you might appreciate a primer on this exemption – what it is and how to apply it.golden-key

Under the FMLA regulations, a key employee may be denied restoration to his job position if such restoration would cause “substantial and grievous economic injuries to the employer’s operations.” 29 C.F.R. Section 825.216. 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. (Keep in mind that overtime payments to non-exempt employees can increase their income significantly and throw off the top 10%!)

The regulations discuss what “substantial and grievous economic injury” means. Of particular note, the “substantial and grievous economic injury” must be based on the restoration, and “not whether the absence of the employee will cause such substantial and grievous injury.” (Emphasis added). 29 C.F.R. Section 825.216. This is a very important distinction – several courts have found the employers failed to establish “substantial and grievous economic injury” where the employer focused on the effect of the employee’s absence rather than the impact of the employee’s restoration on its operations. Let me repeat that – FOCUS ON THE IMPACT OF THE RESTORATION, NOT THE ABSENCE!

Continue Reading The Rules on the Key Employee Exemption Under the FMLA (Part I)