how a key employee affects a business
from an internal perspective apart from the irs classification a key employee may be considered to be an intrinsic part of a company s operations such an employee could be influential in securing capital for the business which may occur through their connections or by virtue of their work for example the employee may hold a role tied directly to sales channels for the company intertwining their performance and business activities with the cash flow the employee might be the top performing salesperson at the company driving a significant portion of the regular revenue the employee for a variety of reasons may represent a public face associated with the company s brand and is thus seen as crucial to maintaining the investment and support of shareholders and customers there are other irs and government rules that have different definitions of key employee for different purposes the company may define the work of the employee as vital to the infrastructure and operation of the business even though that employee may not have a highly visible role in terms of the public or outside business relations for instance the chief scientist on a team developing a novel new product expected to be a mainstay behind the business s revenue and income could be regarded as a key employee special considerationsemployers may feel the need to address compensation for key employees differently from the majority of the staff beyond providing salary this can include offering a variety of options for them to save for retirement or presenting them work life balance benefits to keep them engaged in the business conversely employers might adopt a different stance if a key employee makes use of the family and medical leave act to take unpaid leave from work such employees who may rank among the top 10 percent of salaried workers at a company might not be reinstated by the employer under certain circumstances 