What Happens When Disability Laws Conflict with Company Policy?

Winter brings us to peak flu season. Employee absenteeism, whether for the employee’s own illness or that of a family member, becomes a regular issue for many employers. Fortunately, for most employers the absences caused by the flu and other common ailments are of short duration and covered by the employer’s sick leave policy. Operations quickly return to normal.

But what is an employer to do when an absence runs longer? Perhaps even beyond the employer’s sick leave policy. For employers with more than 50 employees, they may be required to provide up to 12 weeks of leave under the Family Medical Leave Act. But many employers are not aware that the Americans’ with Disabilities Act (also referred to as the ADA) and many state and city anti-discrimination laws in many circumstances require an employer to provide an unpaid leave of absence as a form of reasonable accommodation for an illness or medical condition.

While the Americans’ with Disabilities Act requires that an illness or medical condition be more sever than a cold of flu for it to apply, some of the State and local laws have a much lower threshold for what constitutes a covered condition. Even more troubling for employers is the fact that the potential duration of an unpaid leave of absence is not defined in the ADA or the state and local laws.

Under the ADA, and most of the state and local laws as well, a leave of absence of some duration is a reasonable accommodation that an employer must provide unless it is, or becomes, an “undue burden.” But there is no clear standard for when a unpaid leave of absence constitutes or becomes an “undue burden.” Typically, increased workloads for the remaining staff, overtime expense, or even having to hire a temporary employee to cover for the absent employee are not enough to constitute an undue burden. This is true even if the absence goes on for months and months.

There is certainly no requirement that the employer provide a leave of absence that is indefinite or unlimited. But determining when the leave stops being a “reasonable accommodation” and starts being an “undue burden” must be done on a case-by-case basis. Large employers have gotten in trouble for using a one-size-fits-all approach. Several years ago, UPS settled claims brought under the Americans’ with Disabilities Act with the EEOC for $2 million after the EEOC challenged its leave of absence policy, which terminated an employee automatically after he or she reached 12 months of leave. Before that, Sears, Roebuck and Co. settled a similar lawsuit for $6.2 million. Determining when the leave of absence becomes an undue burden requires and analysis of all of the costs and difficulties of continuing the leave of absence. Over the years, courts have made clear that demonstrating an undue burden is a very high standard to meet.

Takeaway for Insurance Executives

Employers should be aware that the ADA, State, or Local laws may require that they provide an employee with a leave of absence beyond their companies sick or PTO policy. If confronted with an employee that requires a leave of absence beyond the company’s sick or PTO policy, they should carefully evaluate whether the absence is caused by a condition that is covered by an applicable discrimination law and if so, determine whether it has an obligation to provide a leave or absence and what the length of any such leave of absence should be.