FMLA and Leave Basics: What Small Employers Need to Know

Which employers the FMLA covers, what it requires, and the state leave, pregnancy accommodation and tax credit rules small businesses meet.

Web Health Benefits · Last reviewed October 26, 2026 · 7 min read

Sooner or later, someone on your team will need time away for a new baby, surgery, or a seriously ill parent. How you handle it depends on federal law, your state and the policy you write.

This guide covers the federal Family and Medical Leave Act (FMLA), which employers it applies to, what it requires, and the other leave rules small businesses run into even when the FMLA doesn't apply. It is general information, not legal or tax advice. Leave law varies by state, so check with your state labor department, the Department of Labor's Wage and Hour Division, or an employment attorney about your situation.

Does the FMLA apply to your business?

The FMLA has two separate tests: one for employers and one for employees.

According to the Department of Labor's Fact Sheet #28 (revised March 2025), private-sector employers are covered if they employ 50 or more employees in 20 or more workweeks in either the current or the previous calendar year. Public agencies and local educational agencies, including public and private elementary and secondary schools, are covered regardless of size.

Even at a covered employer, not every worker is eligible. The same fact sheet says employees qualify if they have worked for the employer for at least 12 months, have at least 1,250 hours of service in the 12 months before leave begins, and work at a location where the employer has at least 50 employees within 75 miles.

If you have fewer than 50 employees, the federal FMLA generally won't apply to you, but keep reading: state laws and other federal laws may still give employees leave or accommodation rights.

What covered employers must provide

Per DOL Fact Sheet #28 (March 2025), eligible employees may take:

Up to 12 workweeks of leave in a 12-month period for the birth of a child or placement of a child for adoption or foster care, to care for a child, spouse or parent with a serious health condition, for their own serious health condition that makes them unable to work, or for qualifying exigencies related to a family member's military deployment.
Up to 26 workweeks in a single 12-month period of military caregiver leave, to care for a current servicemember or recent veteran with a serious injury or illness.

Leave doesn't have to be taken all at once. When medically necessary, employees can take it in separate blocks or on a reduced schedule. The DOL fact sheet notes one exception: intermittent leave for bonding with a new child requires the employer's agreement.

Pay, health coverage and job protection

The FMLA is about job protection, not pay. DOL describes FMLA leave as job-protected, unpaid leave. Employees can use employer-provided paid leave at the same time if the reason is covered by your paid leave policy, and the fact sheet says an employer may also require employees to use their paid leave during FMLA leave.

Three protections matter most for benefits:

Health coverage continues. Employers must keep group health coverage going on the same terms as if the employee were working. If you provide family coverage, family coverage continues.
The job comes back. DOL's fact sheet says employees must be restored to the same or a virtually identical position when they return from FMLA leave.
No retaliation. DOL lists examples of violations, including writing an employee up for missing work while on FMLA leave, denying a promotion because they used it, or assessing negative attendance points.

Notices, certification and the poster

The FMLA runs on communication in both directions.

Employee notice. Employees don't have to say the words "FMLA," but they must give enough information for you to know the leave may qualify, and give notice as soon as possible and practical.
Certification. DOL says employers may ask for information from the health care provider and must allow 15 calendar days to provide it, with more time in some circumstances.
The poster. DOL's FMLA poster page says all covered employers must display the DOL poster summarizing the law in a conspicuous place where employees and applicants can see it, at all locations, even where there are no eligible employees.

DOL also publishes a free FMLA Employer Guide that walks through notices and forms in more detail.

When the FMLA doesn't apply: other rules to know

Being under 50 employees doesn't mean leave is entirely up to you.

State paid leave programs. DOL's Women's Bureau notes that there is currently no federal law guaranteeing paid family and medical leave for private-sector workers. As of October 2026, its paid leave page says thirteen states and the District of Columbia have laws creating paid family and medical leave programs, Hawaii provides paid temporary disability leave, and Puerto Rico provides paid temporary disability and maternity leave. The same page says that, as of December 2024, 18 states and the District of Columbia had paid sick leave laws covering private employers. Check your own state's rules for which employers they cover.

Pregnancy accommodations. The Equal Employment Opportunity Commission (EEOC) says the Pregnant Workers Fairness Act applies to private employers with 15 or more employees. It requires reasonable accommodations for known limitations related to pregnancy, childbirth or related medical conditions unless they cause undue hardship, and an employer must not require an employee to take leave if another reasonable accommodation would let them keep working.

Disability accommodations. The EEOC also notes that covered employers must provide reasonable accommodations to qualified individuals with a disability unless doing so causes undue hardship. Talk to counsel before denying a request for time off connected to a disability.

A federal tax credit for paid leave

If you choose to pay employees during family and medical leave, you may qualify for a federal tax credit under Internal Revenue Code Section 45S, created by the 2017 Tax Cuts and Jobs Act. Section 70304 of Public Law 119-21, enacted July 4, 2025, struck the provision that ended the credit after 2025 and changed several rules for taxable years beginning after December 31, 2025, including an option to base the credit on premiums paid for paid leave insurance. DOL's Women's Bureau likewise says the credit became permanent in 2025.

The IRS's Section 45S FAQs (last updated September 2026) still describe the earlier rules and carry a notice that the 2025 law changes are not yet reflected. Under those FAQs, the core requirements include a written policy providing at least two weeks of paid family and medical leave a year to qualifying full-time employees (prorated for part-time), paid at no less than 50 percent of normal wages, and the credit is a percentage of wages paid during leave, from 12.5 percent up to 25 percent depending on the pay rate. Because the law changed for 2026, check the current Form 8994 instructions or a tax professional before relying on any detail.

Writing your leave policy

A clear written policy prevents most disputes. For example, imagine a hypothetical 22-person design studio: it isn't covered by the FMLA, but it still needs to say how employees request time off, how much paid leave they get, how its state's leave laws apply, how health premiums are handled while someone is out, and who to contact with questions. A covered employer's policy should also explain FMLA rights and whether paid leave runs at the same time as FMLA leave.

Review it whenever your headcount crosses a threshold or you hire in a new state.

Key takeaways

Per DOL Fact Sheet #28 (March 2025), private employers are covered by the FMLA at 50 or more employees in 20 or more workweeks in the current or previous year.
Eligible employees get up to 12 workweeks of job-protected, unpaid leave in a 12-month period (26 for military caregiver leave), with health coverage continued.
Covered employers must display the DOL FMLA poster at every location.
Smaller employers may still face state paid leave and sick leave laws, the Pregnant Workers Fairness Act at 15 or more employees, and disability accommodation duties.
A Section 45S tax credit, which 2025 legislation made permanent, may help offset paid family and medical leave; confirm current rules with the IRS or a tax professional.

Sources

Our articles are general information, not financial, insurance, tax or legal advice, and we don't sell insurance or recommend specific companies or products.

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