How to Handle a Termination When the Employee Is on Medical Leave
Terminating an employee who is currently on medical leave is one of the highest-risk HR situations a small business can face. It is not impossible, but it requires careful navigation of overlapping legal frameworks, and doing it wrong is expensive. Here is what you need to understand before you make any decision.
The Legal Landscape
FMLA
If the employee is on FMLA leave, you cannot terminate them for taking leave or for a reason related to their leave. You can terminate an employee on FMLA leave for a reason that is completely independent of the leave, like a company-wide layoff, a position elimination that would have occurred regardless of the leave, or documented pre-existing performance issues that predate the leave.
The key question: would this employee have been terminated if they were not on leave? If the honest answer is yes, and you can document that the reason for termination is independent of the leave, you may be on defensible ground. If the honest answer is no, you should not proceed without legal counsel.
ADA
If the medical leave is related to a disability, the ADA's reasonable accommodation requirement applies. Before terminating, you must have engaged in the interactive process and determined that no reasonable accommodation would allow the employee to perform the essential functions of their role. Terminating without completing this process creates ADA liability. Again, consult with legal counsel.
State leave laws
Many states have leave laws that provide protections beyond federal law, including for employers with fewer than 50 employees who are not covered by FMLA. Check your state's specific requirements before taking any action.
When Termination May Be Permissible
Company-wide reduction in force where the employee's position is eliminated: the selection criteria must be documented and independent of the leave
Pre-existing documented performance issues where the performance process was already underway before the leave began
Position elimination that is not related to the employee or their leave
End of a fixed-term employment period
What to Do Before You Proceed
Consult with an employment attorney before terminating any employee who is currently on medical leave. The cost of that consultation is a fraction of the cost of an FMLA retaliation or ADA discrimination claim. Document your business reason for the termination independently and thoroughly before the conversation happens.
The Logistics
If you do proceed with a termination during medical leave, the communication should be in writing as well as verbal. Confirm the termination date, final pay timeline, benefits continuation through COBRA, and the return of any company property. Give the employee reasonable time and process for returning equipment given that they are not currently in the office.
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Questions about this or other HR topics? Visit pragmatichrgroup.com for more resources.
