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Question: How does the Family and Medical Leave Act (FMLA) work with federal contractors whose positions are hard to keep empty and temporary staff are not possible because of the security vetting process?

Answer: The Family and Medical Leave Act (FMLA) does not include provisions allowing a waiver of the reinstatement rights for any employer covered under the regulations, except in the case that the employee on leave is a key employee among the highest paid 10 percent of employees employed by the employer, and reinstatement of that employee would cause substantial and grievous economic injury to business operations. This includes all employers who are covered under the FMLA, including public entities and government contractors. What we have found has worked in the past for contractors in this position, is to have one employee on staff that has undergone the security process and is trained in the processes generally needed to provide some relief while an employee is out on leave.

§ 825.217 Key employee, general rule.

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.

§ 825.218 Substantial and grievous economic injury.

(a) In order to deny restoration to a key employee, an employer must determine that the restoration of the employee to employment will cause substantial and grievous economic injury to the operations of the employer, not whether the absence of the employee will cause such substantial and grievous injury.

(b) An employer may take into account its ability to replace on a temporary basis (or temporarily do without) the employee on FMLA leave. If permanent replacement is unavoidable, the cost of then reinstating the employee can be considered in evaluating whether substantial and grievous economic injury will occur from restoration; in other words, the effect on the operations of the company of reinstating the employee in an equivalent position.

(c) A precise test cannot be set for the level of hardship or injury to the employer which must be sustained. If the reinstatement of a key employee threatens the economic viability of the firm, that would constitute substantial and grievous economic injury. A lesser injury which causes substantial, long-term economic injury would also be sufficient. Minor inconveniences and costs that the employer would experience in the normal course of doing business would certainly not constitute substantial and grievous economic injury.

(d) The FMLA’s substantial and grievous economic injury standard is different from and more stringent than the undue hardship test under the Americans with Disabilities Act (ADA).