What is FMLA leave? A guide to eligibility, coverage, and employer responsibilities

If you have employees, questions about leave will come up. A team member has a new baby. Someone needs surgery. A parent falls seriously ill. Knowing how to handle these situations matters for your business and your people.

FMLA leave is one of the most important leave laws a small business owner needs to understand. Not every business is covered, and not every employee qualifies. But if you do have obligations under the Family and Medical Leave Act, you need to know what they are.

This article breaks down what FMLA is, who it applies to, what reasons qualify, and what you're responsible for as an employer.

What is FMLA leave?

FMLA leave is unpaid, job-protected leave available to eligible employees under the Family and Medical Leave Act, a federal law enacted in 1993. Qualifying employees may take up to 12 weeks of leave in a 12-month period for certain medical or family reasons. They generally have the right to return to the same job or an equivalent one when their leave ends. Eligible employees may also continue their group health benefits during leave under the same terms that would apply if they were still working.

The U.S. Department of Labor’s Wage and Hour Division administers the law. FMLA sets a federal baseline for leave protections, but some state laws may offer broader or additional benefits.

Is FMLA paid or unpaid?

Federal FMLA leave is generally unpaid. While FMLA itself doesn’t require paid leave, employers may allow or require employees to use accrued paid vacation, sick time, or PTO during FMLA leave, subject to federal and state rules and company policy. Some states also offer separate paid family and medical leave programs that may apply at the same time.

Who is covered by FMLA?

FMLA coverage has two parts: the business must be a covered employer, and the employee must meet separate eligibility rules. Both must be true for FMLA leave to apply.

Covered employers

A covered employer generally includes:

• Private-sector employers that have employed 50 or more employees for at least 20 workweeks in the current or previous calendar year. Both full- and part-time employees count toward the 50, and the 20 workweeks don't have to be consecutive.
• Public agencies, regardless of the number of employees.
• Local education agencies, including public and private elementary and secondary. schools, regardless of the number of employees.

Does FMLA apply to small business?

The federal FMLA generally doesn’t apply to private businesses with fewer than 50 employees. However, if your business isn't covered by the federal FMLA, that doesn't mean you're off the hook. Some states have their own family and medical leave or paid family leave laws that apply to smaller employers, so it’s important to review your state’s requirements. It’s also worth considering a voluntary PTO policy even if you're not legally required to offer FMLA-qualifying leave.

Who qualifies for FMLA?

Even at a covered employer, not every employee is automatically eligible. To qualify, an employee must meet all three of the following requirements:

• Worked for the employer for at least 12 months (the months don't have to be consecutive).
• Worked at least 1,250 hours of service during the 12-month period immediately before the leave.
• Works at a location where the employer has at least 50 employees within 75 miles.

What are the qualifying reasons for FMLA leave?

FMLA qualifying reasons are specific. Employees can't take federally protected leave for just any personal need. It must fall into one of the categories recognized by the law.

1. Birth of a child and caring for or bonding with a newborn within the first year after birth.
2. Placement of a child for adoption or foster care and bonding with that child within the first year of placement.
3. Caring for a spouse, child, or parent with a serious health condition. For FMLA, a child can be a biological, adopted, or foster child, a stepchild, a legal ward, or the child of a person standing in loco parentis. An adult child may qualify only if they’re incapable of self-care because of a mental or physical disability at the time FMLA leave begins.
4. The employee's own serious health condition that makes the employee unable to perform essential job functions.
5. A qualifying military exigency arising from a spouse's, child's, or parent's covered active duty or impending call to active duty in the Armed Forces.
6. Military caregiver leave to care for a covered service member or veteran with a serious injury or illness.

A serious health condition means an illness, injury, or physical or mental condition that requires inpatient care or continuing treatment by a health care provider. This covers conditions like cancer, heart disease, severe injuries, and mental health conditions that meet the regulatory definition under the FMLA.

How does FMLA leave work?

Let’s take a look at how FMLA leave generally works.

How long is FMLA leave?

In most cases, eligible employees may take up to 12 weeks of unpaid, job-protected leave in a 12-month period. Military caregiver leave may allow an eligible employee to take up to 26 weeks of leave in a single 12-month period, which is longer than the standard 12-week FMLA entitlement. This extended leave applies when caring for a covered service member or veteran with a qualifying serious injury or illness.

Employers, not employees, decide how to measure that 12-month period. FMLA allows four methods:

• The calendar year
• Any fixed 12-month period, such as a fiscal year or an employee's work anniversary
• A 12-month period measured forward from the date an employee's first FMLA leave begins.
• A rolling 12-month period measured backward from the date an employee uses any FMLA leave.

Whichever method you choose, you must apply it consistently to all employees.

Types of FMLA leave

FMLA leave doesn't have to be taken all at once. There are three types of leave:

• Continuous leave: The employee is away from work for an uninterrupted period of time.
• Intermittent leave: The employee takes leave in separate blocks of time for a single qualifying reason, e.g., a few hours a week for medical appointments.
• Reduced-schedule leave: The employee's weekly or daily work schedule is temporarily reduced by reducing their usual number of working hours per workweek or per workday.

Job restoration

When an employee returns from FMLA leave, the employer must generally restore that employee to the same position or an equivalent one. An equivalent position is one that's virtually identical to the original in pay, employee benefits, and working conditions. It must involve the same or substantially similar duties and responsibilities.

Health benefits

Covered employers must generally maintain an eligible employee's group health coverage during FMLA leave under the same terms as if the employee had continued to work. The employee must continue to pay their share of group health plan premiums, using the same method as during active employment when leave is paid, or another arrangement if the leave is unpaid.

Using paid leave during FMLA

Federal FMLA leave is unpaid, but employers may allow or require employees to substitute accrued paid leave, such as vacation, sick, or PTO, during FMLA leave, depending on employer policy and applicable state law. Managing this correctly matters for payroll, since paid leave, unpaid FMLA, and state paid leave programs can all have different payroll treatments.

FMLA and state leave laws

Federal FMLA sets a national baseline, but it is not the only leave law that may apply. Many states and some cities have their own family and medical leave laws, and some offer paid leave.

State and local leave laws may cover smaller employers or provide different leave lengths, qualifying reasons, wage replacement, and job protections. In some cases, these laws may apply at the same time as federal FMLA leave.

Because each law has its own coverage and requirements, review every rule that applies to the employee’s work location. Don’t assume that following one “stricter” law will satisfy all of your obligations.

Here's a quick look at FMLA vs. paid family leave at the state level:

State programs vary widely, so confirm the details for each state where your team works.

Employer responsibilities under FMLA

If your business is a covered employer, FMLA comes with clear duties.

1. Post the required general notice. Display the free FMLA poster in a place where employees and applicants can easily see it. If you have any FMLA-eligible employees, also provide the same general information in writing, such as in your employee handbook or during onboarding.
2. Provide required employee notices. Send eligibility notices, rights-and-responsibilities notices, and designation notices in writing. Provide the eligibility and rights-and-responsibilities notices within five business days of learning that an employee may need FMLA leave, and the designation notice within five business days of confirming that the leave qualifies.
3. Review and designate qualifying leave. Decide whether an employee’s request qualifies as FMLA leave, then confirm the designation in writing.
4. Request only permitted documentation. Ask for medical certification only when allowed. You can use the Department of Labor's forms, such as WH-380-E for an employee's own serious health condition and WH-380-F for a family member's. For an ongoing condition, you can usually ask for recertification no more than once every 30 days, and only in connection with an absence. For a long-term or indefinite condition, you can ask every six months. Keep medical information confidential and separate from regular personnel files.
5. Maintain group health benefits. Continue coverage under the same terms during leave, and ensure employees continue to pay their share of premiums.
6. Track leave accurately. Record continuous, intermittent, and reduced-schedule leave so you can monitor how much FMLA leave each employee has remaining.
7. Keep required records. Store complete and confidential FMLA records for at least three years. Be prepared to provide them to the U.S. Department of Labor if requested.
8. Restore the employee’s position. When the employee returns, place them in the same job or an equivalent role with comparable pay, benefits, and working conditions, subject to limited exceptions under the law.
9. Avoid interference or retaliation. Don’t punish an employee for using protected leave, and don’t interfere with or discourage employees from exercising their FMLA rights.

Good HR software can help you store these records and keep employee details organized. Because FMLA can get complex, review close calls with a qualified employment attorney or HR professional.

How QuickBooks can help you track and manage leave

Managing leave gets easier with organized records, clear policies, and accurate balances. QuickBooks Workforce can help.

Depending on your plan, QuickBooks can help you:

• Create and manage your own paid and unpaid time-off policies.
• Receive and record time-off requests.
• Track paid and unpaid time-off balances.
• View approved and entered time off from one dashboard.
• Keep employee information organized.
• Connect time tracking and time-off data with your payroll workflow.

With time-off tracking in QuickBooks, your team can request time off and check balances in the QuickBooks Workforce app, which brings work, pay, and time off together.

Ready to simplify how you manage employee time off? Explore QuickBooks Workforce and leave-tracking tools to see how they can support your team.