Q&A: Dropping below 50 employees impacts FMLA calculations

Question: Due to the recent economic downturn related to COVID-19 (coronavirus), we temporarily laid off a number of employees. Do we count them for purposes of determining if we’re a covered employer (with at least 50 employees) under the federal Family and Medical Leave Act (FMLA)? If we drop below 50 employees, does this mean we no longer have to provide FMLA leave?

Answer: You’re a covered employer under the FMLA if you employ 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year. (See the FMLA regulations at 29 CFR 825.104(a).) Employees on a leave of absence (paid or unpaid) are counted as long as there’s a reasonable expectation that they’ll return to active employment. (See 29 CFR 825.105(c).) Employees on temporary or permanent layoff generally aren’t counted until they’re recalled or rehired. However, if you’re providing benefits, such as health insurance, during a temporary layoff, we recommend counting those laid off workers in the total since their receipt of the benefits indicates you have an ongoing employment relationship with them.

The employee must also meet eligibility requirements, including working at a location where there are at least 50 employees within 75 miles. (See CFR 825.110(a)(3).) When making this determination, count all employees on the payroll on the date the employee gives notice of the need for leave. (See 29 CFR 825.110(c).) These include workers on paid or unpaid leave or who are receiving benefits. (See 29 CFR 825.110(b)(3).) An employee’s eligibility for that particular reason for leave isn’t affected by any subsequent change in the number of employees employed within 75 miles of the work location. You must allow an employee already on FMLA leave to continue that leave even when the employee count drops below 50 after they request leave. (See 29 CFR 825.110(e).)

Keep in mind there are many other federal and state laws and requirements that may be impacted by a change in your business size, such as the Affordable Care Act (ACA); affirmative action plans (AAPs) for federal contractors or subcontractors; the Equal Employment Opportunity Commission (EEOC)’s EEO-1 Report; state laws; and city or county ordinances. For more information on FMLA eligibility, see our Legal Guide, FMLA: Eligibility Requirements. Your Vigilant Law Group employment attorney can also assist you with any FMLA questions.