Exceptions to FMLA Job Restoration Rights

An employee returning from FMLA leave is entitled to the same or an equivalent job, but that right has defined exceptions. Restoration is not required when the job would have ended anyway (a layoff, a completed project or term), when a qualifying key employee's restoration would cause substantial and grievous economic injury, when the employee cannot perform an essential function of the job, when leave was obtained by fraud, or when the employee breaches a uniformly applied outside-employment policy. In each case the employer carries the burden of showing the exception applies.

The basic restoration right itself is covered in the right to the same or equivalent job under FMLA. This post covers only the exceptions.

The Governing Principle: No Greater Right Than Continued Employment

Every exception grows from one idea: an employee has no greater right to reinstatement, or to other benefits and conditions of employment, than if they had been continuously employed during the leave. Leave protects the employee from losing the job because of the leave. It does not insulate them from decisions that would have happened anyway.

1. Layoffs, Reorganizations and Eliminated Shifts

If the employee would have been laid off during the leave, or the position was eliminated in a reorganization, restoration is not required. The same logic applies to a shift that was eliminated or overtime that was discontinued: the employee is not entitled to return to something that no longer exists for anyone.

The employer must be able to prove the decision would have been made regardless of the leave. Useful evidence includes:

• documentation of the business reason predating or independent of the leave request;
• the selection criteria and how they were applied to everyone affected;
• the identity of the decision-makers and what they knew about the leave; and
• whether other employees in comparable roles were affected in the same way.

Timing is the weak point. A position "eliminated" while its holder is on leave, whose duties are then absorbed by a new hire, is the pattern that most often ends in a retaliation or interference claim.

2. Fixed-Term and Project Employment

An employee hired for a specific term or to perform a specific project has no right to restoration if the employment would have ended during the leave. If the project continues or the term is extended for others in the same role, the exception does not apply.

3. The Key Employee Exception

A narrow exception allows an employer to deny restoration, but not the leave itself, to a key employee: a salaried, FMLA-eligible employee who is among the highest-paid 10 percent of all employees within 75 miles of the employee's worksite. The status is determined when the leave is requested.

The conditions are strict:

• Written notice of key employee status must be given when the eligibility notice is given (or as soon as practicable if that is not possible). An employer that fails to give this notice cannot deny restoration on this ground.
• The injury test is whether restoring the employee would cause substantial and grievous economic injury to operations. It is not whether the absence was hard to cover. The regulations describe this standard as different from, and more stringent than, the ADA's undue hardship standard.
• A second written notice must be given as soon as the employer determines that the injury would occur, explaining the basis and giving the employee a reasonable time to return to work.
• Health benefits continue during the leave even after that notice, and an employee who stays on leave may still request reinstatement at the end of it; the employer must then reassess and respond in writing.

This exception is rarely usable in practice, because by the time leave ends most employers have filled the gap temporarily.

4. The Employee Cannot Perform an Essential Function

If, at the end of FMLA leave, the employee is unable to perform an essential function of the position because of a physical or mental condition, including the continuation of the serious health condition, the employee has no FMLA right to restoration to another position.

That is where the FMLA analysis stops and the ADA analysis often starts. An employee who cannot return may be entitled to a reasonable accommodation, which can include additional leave, a modified schedule or reassignment. Terminating automatically at exhaustion is one of the most common and expensive errors. See restoration and reasonable accommodation under current leave laws.

5. No Fitness-for-Duty Certification

Where the employer has a uniform fitness-for-duty requirement and stated it in the designation notice, restoration may be delayed until the certification is provided, and may be denied if it is never provided. The rules for that certification are in fitness-for-duty certification requirements.

6. Fraudulently Obtained Leave

An employee who obtains FMLA leave fraudulently is not protected by the job restoration or benefits maintenance provisions. Suspicion is not enough; the employer should be able to show what was false and how it knows, and should follow the same investigation process it uses for other misconduct.

7. Outside Employment During Leave

If the employer has a uniformly applied policy governing outside or supplemental employment, that policy may continue to apply during FMLA leave, and a violation can support denial of restoration. An employer without such a policy may not deny restoration on this basis unless the leave was obtained fraudulently.

What Is Not an Exception

• A temporary replacement who performs well.
• Restructuring the job while the employee is away so that it is "different" on return.
• Delaying restoration to finish paperwork or schedule a start date that suits the department.
• Poor performance first raised after the leave request, without prior documentation.

The restoration obligation ends when the 12-week entitlement is exhausted, but ending FMLA protection is not the same as ending all legal protection. Check eligibility calculations too; an employee who was never eligible never had the right. See eligibility requirements for FMLA leave.

Frequently Asked Questions

Can we refuse to give a key employee FMLA leave?

No. The exception applies only to restoration. The key employee still receives the leave and continued health benefits.

Is a hard-to-cover absence enough for the key employee exception?

No. The test is whether restoring the employee would cause substantial and grievous economic injury, not whether the absence was inconvenient.

Who has to prove the layoff was unrelated to the leave?

The employer. It must show the employee would not have been employed at the time of reinstatement regardless of the leave.

What happens if the employee cannot do the job when FMLA leave ends?

There is no FMLA restoration right, but the ADA may require a reasonable accommodation, including additional leave.

Can we deny restoration because the employee worked elsewhere during leave?

Only under a uniformly applied outside-employment policy, or where the leave was fraudulently obtained.

Related Reading and Training

Employers that also need to confirm health coverage during leave should see FMLA job protection and benefits maintenance. For the FMLA and ADA interaction, the Integrating FMLA, ADA, COBRA and Workers' Compensation program is the most direct course; the FMLA training and certification program covers restoration in full.