[Code of Federal Regulations] [Title 29, Volume 3] [Revised as of July 1, 2006] From the U.S. Government Printing Office via GPO Access [CITE: 29CFR825.218] [Page 775] TITLE 29--LABOR CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR PART 825_THE FAMILY AND MEDICAL LEAVE ACT OF 1993--Table of Contents Subpart B_What Leave Is an Employee Entitled To Take Under the Family and Medical Leave Act? Sec. 825.218 What does ``substantial and grievous economic injury'' mean? (a) In order to deny restoration to a key employee, an employer must determine that the restoration of the employee to employment will cause ``substantial and grievous economic injury'' to the operations of the employer, not whether the absence of the employee will cause such substantial and grievous injury. (b) An employer may take into account its ability to replace on a temporary basis (or temporarily do without) the employee on FMLA leave. If permanent replacement is unavoidable, the cost of then reinstating the employee can be considered in evaluating whether substantial and grievous economic injury will occur from restoration; in other words, the effect on the operations of the company of reinstating the employee in an equivalent position. (c) A precise test cannot be set for the level of hardship or injury to the employer which must be sustained. If the reinstatement of a ``key employee'' threatens the economic viability of the firm, that would constitute ``substantial and grievous economic injury.'' A lesser injury which causes substantial, long-term economic injury would also be sufficient. Minor inconveniences and costs that the employer would experience in the normal course of doing business would certainly not constitute ``substantial and grievous economic injury.'' (d) FMLA's ``substantial and grievous economic injury'' standard is different from and more stringent than the ``undue hardship'' test under the ADA (see, also Sec. 825.702).