Understanding Employee Status

An air traffic controller looks at his screen and sees a bunch of “blips” representing aircraft, each accompanied by a code. By looking at that code, the air traffic controller can tell the status of each aircraft: where it came from, where it is headed, its speed and altitude. This information is of great comfort to the controller, who is responsible for keeping these aircraft safe and staying informed regarding potential hazards. A controller’s worst moment occurs when he sees a “blip” with no explanatory code. When an aircraft’s status is unknown, the controller’s ability to safely guide it through the sky is significantly compromised.

Now think about this from a pilot’s perspective. A pilot takes great comfort knowing that the controller understands his plane’s status relative to all of the other aircraft in the sky. When that status information is missing, the pilot does not know where he is relative to other aircraft and does not know what hazards he might encounter.

Like air traffic controllers, employers also need to understand the status of the “blips” on their screens; although your blips are your employees, not airplanes. Employers do not need to know their employees speed and altitude, but they do need to know each employee’s status. Employers and employees benefit when employees having a clear understanding of where they stand and what is expected of them.

The Four Statuses

All employees fall within one of four possible statuses:

Active employees. Active employees are those that you expect to report for work. (Keeping them active once they get there is a management responsibility.)

On Leave employees. On leave employees are considered to be employees, but are excused from coming to work. For example, an employee may be on Family and Medical Leave Act (FMLA) leave, vacation leave, sick leave, personal leave, bereavement, sabbatical, educational leave, or any other form of authorized leave from which the employee is expected to return.

Former employees. Former employees are no longer considered to be employees and are not expected to perform services for the employer. These are individuals who have resigned, retired, been fired, or demised. The bonds of employment have been severed.

Conditionally terminated employees. Like former employees, conditionally terminated employees are no longer considered to be employed and are not expected to perform services for the employer. Unlike former employees, the conditionally separated have a contingent right to return to employment. A contingent right to return may derive from a layoff/recall policy, which would entitle the employee to be reemployed if a vacancy occurs within a specified period. Another source of a contingent right to return is the Workers’ Compensation statute, which requires employers to reinstate employees who regain work capacity within 18 months of the original date of injury.

These statuses are exclusive, in that an employee cannot be in more than one status at a time. This means that there are clearly recognizable moments when an employee’s status changes.

Income Sources are not Statuses 

Employees have access to several different income streams: payroll, leave time accruals, workers’ compensation benefits, disability benefits and others. The income source that an employee relies on may change with changes in employee status, but the income source itself is not a status.

Some Examples

An employee comes to work as scheduled and is compensated through the payroll system. This employee is on active status and payroll is his income source.

An employee misses a day of work for a migraine and uses a sick leave day. The employee is excused from work and is on leave, with the sick leave accrual serving as income source.

An employee is injured on the job and unable to work for several weeks. Is the employee “out on Workers Comp?” No: “Workers’ Compensation” is not a status; it is an income stream available to employees unable to work as a result of a workplace injury. So when an employee is receiving Workers’ Compensation benefits, what is the employee’s status? Well, if the employee is unable to work, then he or she could not be active. For those employees eligible for FMLA leave or another leave of absence provided by the employer, the status would likely be “on leave.” If the employee exhausts all available leave, he or she could be conditionally terminated, subject to a statutory right to return to work with in 18 months of the date of injury.

An employee gets injured in a non-work setting and is told by his doctor that he can only work 4 hours per day. The employee is eligible for FMLA leave and uses it to reduce his work day from the normal 8 hours to 4 hours. During the 4 hours that the employee is at work, his status is active and his income source is payroll. During the 4 hours each day the employee is unable to work, the employee’s status is on leave (FMLA). The employee could use sick leave or earned time accruals, if available, as an income source during this period.

A new employee suffers a non-work injury and is unable to work. The employee is not FMLA eligible and has not accrued any leave time. The employee is not active or on leave, so the individual is terminated due to unavailability to work.

Document Status Changes

Misunderstandings regarding status are a frequent source of conflict between employers and employees. By keeping track of the status of your employees, employers and employees can avoid confusion that could result in legal disputes. Like air traffic controllers and pilots, employers and employees need to know about changes in their status. Whenever an employee goes from active to on leave, on leave to active, active to former, on leave to conditionally terminated, the employee should receive advanced written notice of the date on which the status change will occur. The employee should also be notified of any changes in income source resulting from changes in status. In some instances, employees may have some options with regard to income sources, such as when employers allow employees to supplement Workers’ Compensation benefits with sick leave pay.

Mark Broth is a member of the Drummond Woodsum’s Labor and Employment Group and his practice focuses on the representation of private and public employers in all aspects of the employer-employee relationship. This is not a legal document nor is it intended to serve as legal advice or a legal opinion.  Drummond Woodsum & MacMahon, P.A. makes no representations that this is a complete or final description or procedure that would ensure legal compliance and does not intend that the reader should rely on it as such. “Copyright 2013 Drummond Woodsum. These materials may not be reproduced without prior written permission.”