Change Terms and Conditions on Return from FMLA?

Question

Upon return from FMLA leave, an employee must be restored to his or her original job or to an equivalent job with equivalent pay, benefits, and other terms and conditions of employment. When is it to safe to change the job, lower pay and or demote employee?

Answer

As background and as you are likely aware, the Regulations to the federal Family and Medical Leave Act (FMLA) expressly state at section 825.214 that "on return from FMLA leave, an employee is entitled to be returned to the same position the employee held when leave commenced, or to an equivalent position with equivalent benefits, pay, and other terms and conditions of employment." At §825.215, the term "equivalent position" is defined to be "one that is virtually identical to the employee's former position in terms of pay, benefits and working conditions, including privileges, perquisites and status. It must involve the same or substantially similar duties and responsibilities, which must entail substantially equivalent skill, effort, responsibility, and authority."

That said, the right to reinstatement conferred upon an employee returning from FMLA leave is not unfettered. Indeed there are some limitations, outlined specifically in the FMLA Regulations linked above as follows:

(a) An employee has no greater right to reinstatement or to other benefits and conditions of employment than if the employee had been continuously employed during the FMLA leave period. An employer must be able to show that an employee would not otherwise have been employed at the time reinstatement is requested in order to deny restoration to employment. For example:

(1) If an employee is laid off during the course of taking FMLA leave and employment is terminated, the employer's responsibility to continue FMLA leave, maintain group health plan benefits and restore the employee cease at the time the employee is laid off, provided the employer has no continuing obligations under a collective bargaining agreement or otherwise. An employer would have the burden of proving that an employee would have been laid off during the FMLA leave period and, therefore, would not be entitled to restoration. Restoration to a job slated for lay-off when the employee's original position is not would not meet the requirements of an equivalent position.

(2) If a shift has been eliminated, or overtime has been decreased, an employee would not be entitled to return to work that shift or the original overtime hours upon restoration. However, if a position on, for example, a night shift has been filled by another employee, the employee is entitled to return to the same shift on which employed before taking FMLA leave.

(3) If an employee was hired for a specific term or only to perform work on a discrete project, the employer has no obligation to restore the employee if the employment term or project is over and the employer would not otherwise have continued to employ the employee. On the other hand, if an employee was hired to perform work on a contract, and after that contract period the contract was awarded to another contractor, the successor contractor may be required to restore the employee if it is a successor employer. See §825.107."

(4) Thus, an employee who seeks to return to work at the conclusion of an FMLA leave period must indeed be restored to his or her former position, or an "equivalent one," assuming none of the lawful limitations on this right exist. Once restored back to work, however, reinstated employees can and should be treated just as any other employees would be relative to their performance, conduct and other legitimate business/workplace decisions as otherwise may affect them.

Getting specifically to the question of "when is it safe to change the job, lower pay and or demote employee?" . . . to the extent the employer is concerned about potential a discrimination or retaliation challenge if it visits adverse action upon an employee who has exercised statutory rights under the FMLA and then returned to work, please note that such employees are not entitled to better treatment in the workplace upon his/her return. Certainly an employee cannot be discriminated or retaliated against for having exercised such rights, but the employer is not required to treat such employee more preferentially on account of such protected activity, either. Thus, if there are lawful legitimate, non-discriminatory and non-retaliatory reasons -- having nothing to do with the prior FMLA leave -- for seeking to "change the job, lower pay and or demote" an employee who previously took leave under the Act, and if the employer would take such action even if the employee had never exercised such rights, the employer can take such action at the time it is warranted, without delay. Employers are not required to (and arguably should not) seek to wait some particular period of time after reinstating an employee following an FMLA/CFRA leave in order to take adverse action, perhaps to minimize the risk of a subsequent claim challenging such decision as discriminatory or retaliatory. While the optics of such action admittedly may not be favorable if the timing is proximally close to an employee's return from FMLA leave, as long as the employer has a lawful reason for taking such action, and if such action would have been taken had the employee never taken leave in the first place, strictly speaking the employer can proceed.

If, however, the employer seeks to change an employee's job, lower his/her pay and/or effectuate a demotion in whole or in part because the employee exercised FMLA rights -- and this can include seeking to take such action because the person who replaced the employee on leave performed the job better -- then such action in this scenario is unlawful, and ill-advised at any point time. Indeed the FMLA Regulations cited above also expressly state that "[a]n employee is entitled to ... reinstatement [to his/her former position or an equivalent one] even if the employee has been replaced or his or her position has been restructured to accommodate the employee's absence."

Without knowing the employer's justification for its proposal to "change the job, lower pay and or demote" an employee who returns from FMLA leave, it is difficult to opine as to the propriety of such action. As noted above, in some cases adverse action of this nature is lawful, as indeed employees who exercise FMLA rights are not clothed with immunity from the consequences of their actions (i.e., if the proposed action is disciplinary in nature, in accordance with company policy or practice), nor are they protected against legitimate business decisions that the employer would have made with or without their statutory protection. Lawful employer actions to this effect need not be delayed and arguably should not be -- indeed we generally advise employers against waiting to make permissible business decisions solely to make them "appear" as though they are something they are not. If, however, the employer takes an employee's exercise of statutory rights into account when making a decision deny job restoration and/or to subsequently discipline, demote or otherwise adversely impact such worker, then such action would be illadvised to the extent it runs afoul of applicable federal and state law in this regard -- simply waiting to take such action arguably does not insulate the employer against a potential discrimination/retaliation claim, nor would it necessarily bolster its ability to defend one.

 

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Published Date:April 20, 2021

Categories: HR Question of the Month