Last Updated on April 2, 2026 by MyHRConcierge

The Family and Medical Leave Act (FMLA) provides eligible employees with up to 12 weeks of unpaid, job-protected leave for specific family and medical reasons. During this time, employers must maintain group health benefits and, in most cases, restore the employee to the same or an equivalent position upon return. 

It is important for employers to understand that “job-protected” does not mean “immune from termination.” While the law is designed to protect employees from losing their job simply because they needed protected leave, it does not prevent employers from making legitimate business decisions that would have occurred regardless of that leave. 

Is It Legal to Terminate an Employee on FMLA Leave? 

In certain circumstances, yes- terminating an employee on FMLA leave can be legal. The determining factor is whether the termination is completely unrelated to the employee’s use of FMLA leave. 

Employers must be able to demonstrate that the decision to terminate was based on legitimate, non-discriminatory reasons. If the same decision would have been made had the employee not taken leave, the action may be permissible. However, if the leave itself plays any role in the decision-making process, the employer may be exposed to claims of interference or retaliation. 

This is where many organizations face risk. Even when there is a valid reason for termination, poor documentation or inconsistent handling can create the appearance that the leave influenced the outcome. 

Why Termination May Occur During FMLA Leave 

There are a variety of business circumstances in which termination during FMLA leave may arise. One of the most common is organizational restructuring or layoffs. If a company is reducing its workforce and the employee’s role is eliminated as part of a broader, well-documented decision, the fact that the employee is on leave does not shield them from inclusion. 

Similarly, performance-related terminations may still move forward, particularly when there is a clear history of documented issues. If an employee was already underperforming or on a performance improvement plan (PIP) prior to taking leave, an employer may continue that process… provided it is handled consistently and without regard to the leave itself. 

There are also situations involving misconduct or policy violations that justify termination. If an employer becomes aware of serious issues- such as harassment, fraud or violations of company policy– those concerns can be addressed regardless of the employee’s leave status. 

Additionally, business needs may change during an employee’s absence. A role may be eliminated, operations may shift or a department may close altogether. In these cases, reinstatement may no longer be possible if the position no longer exists. 

Finally, termination may occur if an employee exhausts their FMLA entitlement and is unable to return to work, assuming no additional protections apply under other laws such as the Americans with Disabilities Act (ADA). 

Steps Employers Should Take Before Moving Forward 

Because of the legal sensitivity surrounding FMLA, employers should approach any termination decision involving an employee on leave with a high level of care. The first and most important step is to clearly establish that the reason for termination is unrelated to the leave. This requires a thoughtful review of the facts and the timing of the decision. 

Documentation plays a critical role in this process. Employers should ensure that performance concerns, disciplinary actions, or business decisions are thoroughly recorded and, when applicable, predate the employee’s leave. Well-maintained records can help demonstrate that the decision was part of an ongoing process rather than a reaction to the leave. 

Consistency is equally important. Employers should evaluate how similar situations have been handled in the past to ensure that decisions are applied uniformly. Inconsistent treatment can quickly lead to claims of discrimination or retaliation, even if the underlying reason for termination is valid. 

It is also advisable to involve HR professionals or legal counsel before finalizing the decision. A second level of review can help identify potential risks and ensure compliance with all applicable laws. 

When it comes time to communicate the decision, employers should be mindful of their language. The conversation should remain focused on the legitimate business reason for termination, avoiding any reference- direct or indirect- to the employee’s FMLA leave. 

Example Scenario 

Consider a scenario in which an employee begins FMLA leave due to a serious health condition. Prior to taking leave, the employee had been placed on a performance improvement plan due to ongoing performance issues, with clear documentation outlining missed goals and expectations. 

During the employee’s absence, leadership conducts a broader evaluation of team performance and determines that several underperforming employees, including the individual on leave, will be terminated. The decision is based on established criteria that were applied consistently across the organization. 

In this situation, the termination may be lawful because the performance issues were documented before the leave began, and the decision aligns with how similar cases were handled. The key factor is that the leave itself did not influence the outcome. 

However, if the employer had no prior documentation and only raised concerns after the employee took leave, the situation would appear much more problematic. In that case, the timing alone could suggest that the leave played a role in the decision, increasing the likelihood of legal challenges. 

Best Practices for Employers 

To minimize risk, employers should prioritize proactive compliance. This includes maintaining clear and consistent documentation, training managers on employee leave rights, and establishing standardized procedures for handling employment decisions involving protected leave. 

A well-informed management team is one of the most effective safeguards. When leaders understand what they can and cannot do under FMLA, they are better equipped to make decisions that are both fair and compliant. 

Regular internal audits can also be beneficial. Reviewing past decisions involving FMLA leave can help identify patterns, inconsistencies or areas for improvement before they become larger issues. 

Final Thoughts 

Terminating an employee on FMLA leave is not inherently unlawful, but it is a decision that requires careful consideration and strong supporting documentation. The difference between a compliant action and a costly legal misstep often comes down to whether the employer can clearly demonstrate that the decision was independent of the employee’s use of protected leave. 

FMLA protections are designed to support employees during critical moments, but they do not prevent employers from making legitimate business decisions. By focusing on consistency, documentation and compliance, employers can navigate these situations with greater confidence while reducing the risk of legal exposure. 

Disclaimer: The information provided in this article is intended for general informational purposes only and should not be construed as legal or HR advice. Laws and regulations may vary by jurisdiction. Readers are encouraged to consult with qualified legal counsel or an HR professional regarding their specific circumstances. 

For more information on how to enhance your organization’s compliance efforts, contact MyHRConcierge at 855-538-6947 ext.108, ccooley@myhrconcierge.com. Or, schedule a convenient consultation below: