What are an employer's obligations and options when an employee submits a resignation while on FMLA leave?

An employer's obligations and options for job reinstatement and benefits continuation for an employee on FMLA leave change when the employee has submitted a letter of resignation or another formal notice of intent not to return to work. Once the employer receives this notification, FMLA Regulation 825.311 (b) applies. The regulation states, "If an employee gives unequivocal notice of intent not to return to work, the employer's obligations under FMLA to maintain health benefits (subject to COBRA requirements) and to restore the employee cease. However, these obligations continue if an employee indicates he or she may be unable to return to work but expresses a continuing desire to do so."

There are important steps that an employer should include in the notice communications to ensure the effective use of this provision.

• First, the notice of rights and responsibilities should clearly advise the employee that periodic reports of the employee's status and his or her intent to return to work will be required. By including this information in the rights and responsibilities notice, an employer establishes an expectation of ongoing communications to ensure it receives timely notice of an employee's intention.
  
• Second, the notice should clearly outline any requirements to make health benefits premium payments during the leave. It should also inform the employee of potential liability for payment of health insurance premiums paid by the employer if the employee fails to return to work at the end of the leave. 
  
• If at any time during the leave the employee advises the employer that he or she does not intend to return to work, the employee should be required to submit either a letter of resignation or other formal documentation before initiating the termination of employment and benefits.
• Further, an employer has options in its policy regarding the health care premiums it has paid during the leave, and information in the notice should make clear the employer's intentions. The FMLA has restrictions on recovery of these costs, however, as contained in the Regulation 825.213.
• As the termination of employment, and subsequent loss of health care coverage, is a COBRA-qualifying event, the employer has the obligation to offer COBRA coverage and provide the required notice within 14 days of notification of the qualifying event.