Practical tips for managing an employee leave of absence

Posted on October 27, 2011 in Compliance, Consulting

My last newsletter discussed the sometimes complex way in which the Family Medical Leave Act (“FMLA), Americans with Disabilities Act (“ADA”), and the Texas Worker’s Compensation Act (“TWCA”) interact when an employee requires a leave of absence for medical reasons. This newsletter continues the discussion of employee leaves of absences with six practical tips for managing such leaves. These suggestions come from vast experience in helping companies work through the balancing act between legal obligations and employer and employee needs and rights. We hope you find these tips useful in your business.

 1.   Require an initial medical certification as a prerequisite to granting a leave of absence.

The Department of Labor created a Certificate of Health Care Provider, Form WH380, for employers to use in compliance with the FMLA. An employer should (and for proper FMLA leave, must) require that an employee have his or her treating physician complete this form as part of any request for leave under the FMLA. Although the form was created for compliance with the FMLA, there is no reason that an employer cannot use the same questions on the form to assist the company in assessing the basis for an employee leave under the ADA or TWCA. For example, assume an employee has only been employed for 11 months, so he is not eligible for FMLA. Yet, the employee requests a leave of absence because he was injured on the job. The employer can use many of the questions listed on the WH-380 to certify that the employee needs to be absent from work because of the on-the-job injury. Specifically, the WH-380 asks:

 “Is the employee unable to perform any of his/her job functions due to the condition: ____ No ____ Yes.

If so, identify the job functions the employee is unable to perform.”

These are appropriate questions for a physician to answer on behalf of a person who is unable to return to work for medical reasons irrespective of the legal basis (ADA, FMLA, or TWCA) for the employee’s leave of absence. Employers should keep current all job descriptions, which may be provided to the physician as part of the form WH-380 certification process.

 2.   Keep in contact with an employee during the leave of absence.

Too often employers communicate too little with an employee on a leave of absence. In a typical scenario, the company gets a note from the employee’s doctor saying the employee needs to be excused from work until some specified future date. If the return date is more than 30 days out, the company should communicate with the employee intermittently during the 30-day period to confirm that circumstances have not changed. The company may also require that during the 30-day period, the employee must immediately notify the company of any changed circumstances. This approach helps avoid a note from the doctor just after the originally expected return to work date stating that the employee needs even more time off from work. Additionally, this process helps avoid requested leave that is indefinite or unpredictable. A number of federal courts have held that an employer is not required to grant a leave of absence to a disabled person under the ADA if the requested leave is indefinite or of an unpredictable length.

3.    Require that an employee (with assistance from a treating physician) provide some expectation of a return to work date.

Generally, an employer is not required to provide an employee with a leave of absence under the ADA if the requested leave is for an indefinite period of time.  It is, therefore, proper that an employer asks an employee who seeks a leave of absence for a specific date that the employee expects to return to work. If an employee cannot provide a specific date, the employer is best served by granting the leave for a set period of time (e.g., 90 days) and then re-evaluating the circumstance at that time. Employers should always keep in mind that each employee’s situation should be viewed on a case-by-case basis within the reasonable expectations imposed by law. 

 4.    Be aware of the company’s obligations regarding medical insurance.

The FMLA requires that an employer reinstate an employee with the same or equivalent pay and benefits following a leave covered by the statute. The DOL’s regulations enforcing the FMLA indicate that an employer can require that an employee pay for the employee’s share of health insurance premiums while on leave if the employee would normally be required to make those payments when actively working.  The rub, as many employers have discovered, is that an employer cannot terminate an employee’s medical coverage for non-payment and also reinstate the benefit upon the employee’s return from FMLA.  This leaves the employer with no real choice but to continue medical coverage during FMLA leave irrespective of whether the employee has paid his or her share of the premiums.

As a small consolation, the DOL has issued guidance stating that an employer can require an employee who has failed to pay their share of premiums to repay the debt through agreed payroll deductions. The employer is unfortunately out of luck and without compensation when an employee fails to pay for his or her share of medical premiums and fails to return from FMLA leave. Also, under most state’s law, any agreement to garnish wages in this regard must be in writing and signed by the employee.

If an employee remains on leave after exhausting any applicable leave under the FMLA, and thereafter continues to fail in his or her obligation to pay a portion of medical premiums, then at that point the employer may cancel the employee’s medical insurance. Of course, the employer must provide clear written notice of the cancellation of health insurance.

 5.   Pay attention to employee’s request for disability benefits.

Often an employee on an extended leave of absence will apply for short-term or long-term disability benefits. An employee’s statements in support of a request for disability benefits might impact the reasonableness of an ongoing leave. For example, an employee might make statements in support of a claim for disability benefits that demonstrate the employee does not expect to return to active employment.  Employers should be cautious not to jump to conclusions. Merely because an employee applies for disability benefits does not translate to a request for a leave of absence being unreasonable. As mentioned above, each situation should be considered on a case-by-case basis.

 6.   Terminate with kindness. 

Many employment lawsuits occur because of the manner in which an employee’s employment is terminated, rather than the end result of termination.  Employers should keep this maxim in mind when drafting a letter terminating an employee’s employment because of an inability to return to work. The letter should confirm that the company understands that the employee cannot return to work, and should ask the employee to contact the company if this understanding is incorrect. That simple sentence obligates the employee to correct any misunderstanding and helps avoid a subsequent claim by the employee that he was able to return but denied the opportunity. It is usually a good practice to encourage the employee to re-apply for work when they are able to work again.