Employee status when on long term disability

cxc · May 2001

I am looking for advice regarding how to treat an an employee who has been approved for long term disability because they are unable to work. Assuming there are no reasonable accommodations available and there is no FMLA leave left, my client would like to have a policy that would allow for the termination of the employee on long term disability as opposed to having him or her on the payroll in a limbo status. Any suggestions or potential pitfalls spoted?

Gar · May 2001

In my previous HR life for a large telecommunications firm, our benefit package provided that after an employee was absent for a year with a certifiable illness, his/her employment is automatically terminated and they applied for Long Term Disability (LTD) with our insurance carrier. Hope this helps.

Brad Forrister · May 2001

Because of the dual coverage of this area by the ADA and the FMLA, you should be especially wary and careful about establishing a policy to terminate anyone on long-term disability.

The EEOC and various courts have differed over whether "indefinite leave" is an appropriate accommodation under the ADA.

And evaluations of accommodation always need to be focused on the individual situation, so making a hard policy may be ill-advised.

cxc · May 2001

What would you do in this case?
Employee says she is too stressed out to work - no mention of accommodations. She applies and is approved for long term disability. When she was sent routine paperwork related to termination of her employment, she responded that she would be out for two years and then planned to return. Neither ADA, nor FMLA require leave of this length. Can't we indicate that based on this employee's representations that she cannot work with or without reasonable accommodations, the employer has no further obligation to keep her employed?

Pamela · May 2001

I would send her a letter explaining that she may have rights to accomodation if she has a disability, and that if she believes she does have a disability she would like accomodations for she should let you know. Basically, explain ADA rights. At this point she has not indicated there is a disability, so technically employer has no obligation to do anything other than terminate, but because you are on notice that there MAY be something, you want to be sure she has an opportunity to tell you more. If she doesn't give you any indication of disability, you are probably safe to terminate, but even in that termination notice I would say something to the effect that it is based on your belief that her absence is not due to any disability and that she should notify you if there is other informaiton.

pv25 · May 2001

I think Pam has an interesting idea (requesting more information).

You should also check out the EEOC regulations on psychiatric disabilities. I believe they have a hypothetical that is similar to yours ("stressed out" employee), but I'm not positive.

What's the problem with carrying this employee on the payroll for a year before your pull the trigger?

(BJ) · May 2001

What is your long term disability policy. If the policy is for two years, then no action can be taken until after the two year period has expired, unless you negotiate an exception with the employee. Your policy determines the limits after you have met the legal requirements.

Susan Fentin MA · May 2001

Unless there's some Michigan law that governs this area, I'm not sure that the previous response is correct. Under the ADA you are required to make reasonable accommodations for a disability unless doing so would constitute an undue hardship. You are well advised to ask for more information regarding the employee's disability, including the nature extent duration and severity of her problem and how it limits her major life activities and how it would impact her ability to perform the essential functions of her job. The EEOC has a great set of Q&A's that cover such inquiries. Check their website. Unless there's some argument that a two year leave of absence is not an undue hardship, you would legally be able to terminate this employee after a reasonable period (many employers consider a year's leave sufficient). But do be careful...the standard for undue hardship is very high, and if you have given similar lengths leave for other individuals under other circumstances, you might have to do the same for this employee. I hope that helps.

cxc · May 2001

Forgive my ignorance, but where is it provided that we can take no action for two years, assuming there is a two year limit for mental disabilities. In my case, the employee says she'll be out for two years and can't work in the interim. I can't see any legal requirment that we retain the employee under either the ADA or the FMLA. Am I missing something?

Gar · May 2001

Again, there is no law that says you have to keep someone on your payroll who doesn't show up for work! If her problem is stress, her reasonable accommodation would be to take her medication and/or periodically see her healthcare provider. If she no longer has FMLA protection and there is no comperable protection in your state laws, I say fire her.

Pamela · May 2001

Stress is a tricky thing for an employee to request accomodations for. ADA DOES require that the employee be able to perform the essential functions of the job, and so far the courts have pretty unanimously said that means you have to be able to show up for work (temporary leaves aside). Even if her stress is the symptom of a bona fide disability, she has to be able to give some medical assurance that she'll be able to come back, otherwise she's not "otherwise qualified."

cxc · May 2001

I think the main issue is paying benefits, such as medical during that period. Do you see any reason why we couldn't just let the employee assume the cost for the medical?

CuriousG · May 2001

You need to consider another "hook"-your Pension or Retirement Plan. Some plans grant Benefit Service Credit in their benefit formulas for time spend on an approved LTD. If you terminate the employee, you could make tracking and crediting this service credit a nightmare.

At one employer I worked for, we actually set up an "LTD Company" where we transferred employees who went on LTD status. They were carried in an "inactive" payroll status, so no checks could accidentially be cut. This allowed us to track the service credit, maintain benefits (which also can be a issue) and still have the mployee out of any headcounts of active employees.

Employee status when on long term disability

Comments