Proceed With Caution: Laying Off Employees On FMLA Leave

It's something no employer wants to do, but layoffs have become a reality in these stark economic times. 

There is a fair amount of uncertainty among employers about whether they may lay off employees while the employees are on leave under the Family and Medical Leave Act.  Generally, an employee on FMLA leave (other than a key employee who receives the appropriate notification) must be reinstated to the same or an equivalent position at the conclusion of his or her FMLA leave.  Under the Revised FMLA Regulations, and the prior Regulations, an employee whose position is eliminated, and would have been eliminated regardless of his or her FMLA leave status, need not be restored to the same or an equivalent position at the conclusion of FMLA leave.  The employer's obligations to continue FMLA leave, maintain group health plan benefits, and restore the employee cease when the employee is laid off, provided the employer has no continuing obligation under a collective bargaining agreement or otherwise.  The employer has the burden of proving that the employee would have been laid off during the FMLA leave and therefore is not entitled to restoration. 

Of course, the position must actually be eliminated--not filled by the person who was filling the role temporarily while the incumbent was on leave or reinstated within a week of notifying the employee on leave that the position had been eliminated, etc. 

Employers should proceed with caution when laying off employees on FMLA leave.  Employers who are unable to establish that an employee who is not reinstated following FMLA leave would have been laid off during the leave face potential claims of interference with FMLA rights and retaliation. 

See Section 825.216 for the applicable Regulation

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