How does an employee’s FMLA leave status affect how we conduct a layoff?

Q. I am the HR manager of a company with about 350 employees. I have just learned that the company is eliminating one product line and, as a result, there will be a layoff in that department. One of the employees who would be laid off is on FMLA leave. How do I handle this situation? Do we include her in the layoff even though she is not working? Or is she exempt from layoff because she is on FMLA leave? If she is included in the layoff, do we lay her off now or wait until her leave is over? If we lay her off now, do her insurance benefits stop or continue until the FMLA leave would have concluded?

A. Your question, of course, has several parts. First, an employee on FMLA leave has no greater rights than if she were still at work. So, if the employee on FMLA leave would have been selected for layoff if she were at work, then you can include her in the reduction in force. Otherwise, she would receive greater rights than if no leave had been taken.

Ensure that you can prove that she was properly included in the layoff. If questioned, the burden will be on you to establish the legitimacy of your decision.

The second part of your question involves the effective date of the layoff. Again, you can treat an employee on FMLA leave the same as if she were at work. Thus, if other employees are to be laid off on a certain date, she can be included even if this is before her leave would have ended.

Finally, while employees are generally entitled to continuation of health benefits while out on FMLA leave, that obligation ends if the employee is laid off and employment is terminated during the leave. Your obligation to provide insurance coverage under the FMLA, therefore, would end on the date of her termination and you would have no obligation to continue this coverage to the date her leave would have ended.

The employee would, of course, be entitled to the same COBRA notice as all other employees.