Can an employee who is on disability leave be terminated?

Certainly the fact that an employee who you’d like to terminate is on disability leave complicates the discharge decision and raises red flags that will need to be thoughtfully addressed before the termination occurs. There are a lot of issues to look at to reduce the risk of exposure to wrongful discharge claims of all kinds. While all situations that could occur in the workplace can not possibly be anticipated, the following is a list of things that should be considered. If any answer makes the decision to terminate suspect, you’ll need to consult with in-house counsel or outside counsel immediately, as appropriate.

Is the employee eligible for FMLA leave? (see ¶45,412 for a discussion of FMLA eligibility and ¶45,460 for a discussion of termination of employees on FMLA leave)

If so, the FMLA provides job protection (the right to return to the same or equivalent job) for 12 weeks. Has the employee used up that allotment? Would the employee have been retained but for the FMLA leave?

Is the employee on workers’ compensation leave? (workers’ compensation is discussed under the Workers’ compensation section of the Benefits bluebar)

Workers' compensation rules, including rules for disability leave because of a workers' compensation-covered illness or injury, vary from state to state. Be sure you have a good grasp of what is required under state law.

Is the employee covered by a state temporary disability law? (state temporary disability insurance laws are discussed in the unemployment compensation summaries under the State Laws tab)

If so, the law’s provisions must be analyzed and complied with. The maximum duration of benefit payments under the state disability laws is fixed at 26 weeks.

Is the employee covered by a disability plan and, if so, what does the Summary Plan Description say? (see ¶42,210 for a discussion of disability benefits)

Does the SPD specify how long disability coverage will last and when termination can occur?

Is the individual considered a person with a disability under the Americans with Disabilities Act (can he or she perform the essential functions of the job if a reasonable accommodation is made)? (see ¶72,410 for a discussion of when employers must accommodate individuals with disabilities)

If so, you may have a duty to accommodate the employee; leave or the extension of leave can be a reasonable accommodation under certain circumstances.

What is the reason for the termination decision?

Look at the issues implicated generally with regard to the termination decision (¶67,056A ) and those implicated by a disciplinary discharge (¶67,056B ) or a discharge for performance issues (¶67,056C ).

If productivity is the reason for the employee’s termination, has the employee’s productivity been prorated over the time the employee was working (in other words, make sure that the employee is not being penalized for taking disability leave)?

How have situations like this been dealt with in the past?

The important thing is to be consistent in the approach taken. How have other employees with disciplinary or performance issues been treated? How have other employees who are on disability leave treated?

The decision to terminate an employee on disability is likely to be scrutinized carefully. Make sure you have a clear and legally acceptable answer to each of the questions above before you make the decision to terminate an employee on disability.