Tis the Season for Moonlighting: FMLA Leave and Secondary Employment - McDermott Will & Emery

Tis the Season for Moonlighting: FMLA Leave and Secondary Employment



In Depth

Every year at this time, we receive an increased number of inquiries from employers about suspected employee Family and Medical Leave Act (FMLA) abuse. One of the most common inquiries involves employees who have been discovered to be working, either for themselves or for another employer, while on FMLA leave. Whether it is helping with a family member’s snow removal business or working in retail during the holiday rush, more employees on FMLA leave seem to moonlight during the last months of the year.

Employers’ immediate reaction to this situation is often a desire to terminate or discipline the employee for FMLA abuse, fraud or dishonesty. As a starting point, it is important to keep in mind that working at a second job is not necessarily inconsistent with being on FMLA leave. For example, an employee’s serious health condition may prevent them from being able to perform manual labor at one job, but not from performing clerical work at another.

Moreover, neither the FMLA statute nor its regulations prohibit outside employment by an employee on FMLA leave, except where an employer has an established policy against moonlighting which applies to all employees on any type of equivalent leave of absence. FMLA regulation 825.216(e) states:

If the employer has a uniformly applied policy governing outside or supplemental employment, such a policy may continue to apply to an employee while on FMLA leave. An employer which does not have such a policy may not deny benefits to which an employee is entitled under FMLA unless the FMLA was fraudulently obtained.

In other words, an employer can apply a no moonlighting policy to an employee on FMLA leave if the employee is treated no differently than those who are on leave for a non-FMLA qualifying reason. The U.S. Department of Labor Wage and Hour Division has explained that an employee on FMLA leave is subject to such a policy because an employee on FMLA leave continues to have an employment relationship with the employer, and the employer’s policies continue to apply to the employee in the same manner as an employee who continues to work or who is absent on some other form of leave.

Thus, employers who want to prohibit employees from working a second job while on FMLA leave should consider taking the following steps:

  • Have a clearly established policy against secondary employment which applies to all forms of equivalent leave and is distributed and made known to employees;
  • When an employee begins FMLA leave, remind him or her of the policy;
  • If the employer learns that the employee is working at a second job, confirm employment and let the employee know that the employer is aware that this is happening;
  • Obtain acknowledgement from the employee, if possible, that working at another job while on leave is a violation of company policy; and
  • Ensure that the policy not only states that it applies to other forms of leave, but that it is also applied and enforced that way.

A final issue to be considered before implementing such a policy is whether the policy conflicts with any state statute. Some states have laws that prohibit employer restrictions on lawful off duty conduct. These statutes must be reconciled with the language and the purpose of the employer’s no moonlighting policy.