How to Handle the Interaction of the FMLA, ADA and Workers' Compensation Laws
Author: Steven J. Luckner, Ogletree Deakins
The interaction of the Family and Medical Leave Act (FMLA), Americans with Disabilities Act (ADA), and workers' compensation laws is known by many employers to be the Bermuda Triangle of employment law. It is crucial that an employer ensure compliance with these laws as a violation can result in damages such as lost wages, back pay, reinstatement, retroactive benefits, compensatory damages and punitive damages. It is also important for an employer to understand how these laws interact for the economic efficiency of the employer's business operations. Failure to understand how these laws work together can cost an employer significant money in workdays lost, temporary help costs and overtime pay.
The best way to handle the interaction of these laws is to know when each law is implicated and exactly what each one requires. For example, some leaves may only implicate one of these laws, like caring for another person (FMLA). Some leaves may implicate two of these laws, like an injury not related to work (FMLA and ADA). Some leaves may implicate all three laws, like an injury at work that substantially limits a major life activity. Once an employer understands when each of these laws applies and what they require, it will be simpler to navigate their interaction.
Step 1: Determine Which Laws Apply To Employer
The first thing that any HR professional needs to determine is if the employer is subject to any of these laws. Each law has different requirements as to the size of the employer that is subject to the law and what agencies are responsible for enforcement of the law.
To be subject to the FMLA, an employer must have at least 50 employees. If an employer has fewer than 50 employees, it does not need to concern itself with the requirements of the FMLA. However, if an employer operates in a state that has a family and medical leave law, it must check whether the state law has a lower employer coverage threshold. Compliance with the FMLA is overseen by the United States Department of Labor, Wage and Hour Division (WHD).
To be subject to the ADA, an employer must have at least 15 employees. A smaller employer should check whether a disability-related state law has a lower employer coverage threshold. Compliance with the ADA is overseen by the Equal Employment Opportunity Commission (EEOC).
Workers' compensation laws can apply to businesses with as few as one employee. Compliance with workers' compensation law is generally overseen by each state's workers' compensation commission or board. Workers' compensation laws vary from state to state so it is important for an employer to know what its state requires.
It is also important to note that these federal laws, the FMLA and the ADA, provide what can be considered a floor of protection and benefits for employees. States are generally free to mandate more protection and greater benefits for employees. Furthermore, an employer may implement policies providing additional leave and benefits beyond what is required by state or federal law.
Step 2: Know What Each Law Requires
While each of these laws can be complex in their application and exceptions, having a solid general understanding of what they do and what they require will go a long way.
FMLA. The FMLA is a federal law that provides for 12 weeks of unpaid leave for an employee's own or a family member's serious health condition, for the birth or adoption of a child and for military exigencies. The law also provides 26 weeks for military caregiver leave. An employer must return an employee to the same or an equivalent position (with some exceptions). Leave may be taken in one block, intermittently or on a reduced schedule. To be eligible for FMLA leave, an employee must work for 12 months for an employer, work at least 1,250 hours in the 12 months prior to the start of the leave and work at a worksite where 50 or more employees are employed by the employer within 75 miles.
ADA. The ADA is a federal law that prevents employers from discriminating against employees or job applicants because they are a qualified individual with a disability. The ADA does not explicitly provide payment or leave rights to the employee. The ADA requires an employer to reasonably accommodate an employee or prospective employee with a disability, and leave may be considered a reasonable accommodation in certain situations. A disability is an impairment that substantially interferes with a major life function or activity. The definition of substantially interfering has been significantly broadened by the ADA Amendments Act, which requires courts to construe the ADA broadly.
Workers' Compensation. Workers' compensation is generally a state-run program that allows workers who were injured on the job to receive compensation while they are out of work. It generally does not provide any job protected leave, but an employer may not retaliate against an employee for filing a workers' compensation claim. Workers' compensation laws also minimize liability for employers. In some instances, workers can be barred from receiving workers' compensation benefits if the injury involves willful disregard of safety rules or intoxication from alcohol or illegal drugs.
Step 3: Analyze Whether a Current Situation Implicates Any of These Laws
Once an employer determines that it is subject to any of these laws and understands what the purpose of each law is and what they provide, the employer can then apply that knowledge to the situation it may be facing. For instance, if an employee's injury occurred in the workplace and is serious enough that the employee will be out of work for more than three consecutive days under a doctor's care, there is a very good chance that the employer will be dealing with both a workers' compensation and an FMLA issue.
The following are common examples of where the FMLA, ADA and workers' compensation laws need to be analyzed in tandem.
Can an Employer Run FMLA Leave Concurrently With a Workers' Compensation Absence?
Not only can an employer run FMLA leave concurrently with a workers' compensation absence, it is critical that they do. If an employer fails to designate an absence as FMLA leave, it may provide the employee with more leave than they would otherwise be entitled to. For example, an employee is injured on the job and goes out and returns to work after three months, having received workers' compensation benefits during the entire absence. Four months later, the same employee goes out on unrelated FMLA leave to care for an ill parent. If the original leave was not designated as FMLA leave the employee may be allowed time in excess of the 12 weeks of FMLA.
Once an employee uses up his or her 12 weeks of FMLA leave, the employee's workers' compensation benefit status does not provide him or her with job protection, although it is possible that the employee may be entitled to more time under the ADA if the injury qualifies. In fact, the EEOC has stated that additional time to recover is a reasonable accommodation, but it hasn't said exactly how much time is required. What the EEOC has said is that an employer cannot have an auto-terminate policy. What that means is that an employer cannot give an employee a specified maximum period of leave, even if it is more than the required 12 weeks under FMLA, and if the employee does not return by that date they are automatically terminated. Rather, if an employee has exhausted his or her FMLA leave or was ineligible for FMLA leave, the employer needs to engage in the interactive process with the employee and find out if there are any accommodations the employee needs to return to work, including additional leave time.
Finally, under most state's laws, the employer is not required to continue the employee's benefits while receiving workers' compensation benefits, but if workers' compensation is running concurrently with FMLA, the employer is required to continue to provide benefits at the same level prior to leave.
Can an Employer Exhaust Paid Leave While an Employee Is Receiving Workers' Compensation Benefits and on FMLA Leave?
The FMLA does not allow an employer to exhaust/substitute paid leave while an employee is receiving workers' compensation payments. But, an employer and employee can agree to use paid leave to supplement workers' compensation payments since workers' compensation generally only provides a percentage of the employee's salary. The employer and employee can agree to supplement the PTO benefits payments to 100% of the employee's regular wages. Since many workers' compensation plans do not start payment until one to two weeks after an injury, assuming an employer's policies allow it, an employer may be able to require the employee to use accrued paid leave until workers' compensation benefits kick in.
The benefit to making an employee use accrued paid leave when out on FMLA or in a workers' compensation waiting period is that the worker cannot come back from leave and then take paid time off. For example, a worker goes out for 12 weeks and receives workers' compensation benefits and takes FMLA leave which run concurrently. An employer cannot require the employee to exhaust accrued paid leave during this period. The employee will come back after 12 weeks and the accrued paid leave is still intact. Three months later the employee is hurt in a hunting accident (not work related). The employee has no more FMLA leave, but the employer will most likely be required to accommodate the employee under the ADA for a certain period of time if the injury qualifies. At that point the employer can require the employee to exhaust accrued paid leave for the time he or she is out.
Can an Employer Contact a Health Care Provider Regarding Medical Documentation During a Workers' Compensation, FMLA or ADA Absence?
In many circumstances an employer may have direct contact with an employee's health care provider in the manner in which the workers' compensation statute provides, as opposed to the FMLA, which allows for more limited interaction. The ADA only allows job-related questions consistent with business necessity. The ADA & FMLA both allow for certification of fitness-for-duty, but workers' compensation generally allows for medical inquiries relating to all aspects of the employee's injury, such as history, treatment prognosis, etc.
The FMLA provides the least access to medical information, whereas workers' compensation statutes generally provide the most access to medical information (though employers should check their local workers' compensation law to ensure compliance). The only inquiry that can be made under the FMLA is whether the employee has a "serious health condition" that prevents performance of essential job functions. Under the FMLA you can require a doctor's certification of a serious health condition. You can also require reasonable documentation of family relationship for leave. Under the FMLA you cannot require an exam or ask questions about previous family leave taken or prior serious health conditions before the offering of a job. Under the FMLA you can also require a second certification at employer's expense. If you are running FMLA concurrently with workers' compensation benefits, you will not be limited by the FMLA.
Under the ADA you can require a medical examination and obtain medical information after a conditional offer of employment is made. The medical inquiries made under the ADA are allowed as long as they are "job related" and "consistent with business necessity." Once again, where and ADA absence is running concurrently with workers' compensation benefits, you will not be limited by the ADA.
What Happens to Workers' Compensation Benefits or ADA Protections If an Employee Turns Down Light Duty While on FMLA Leave?
An employee has an absolute right to decline a light duty job while on FMLA leave. The employee does not have the same right under workers' compensation or the ADA. If an employee's health care provider for the workers' compensation injury certifies that an employee is able to return to a light duty position, but the employee declines the employer's offer of light duty, the employee risks losing workers' compensation benefits. Similarly, a worker that turns down a reasonable accommodation, risks a loss of job protection under the ADA. When an employee declines light duty, the employee still remains on unpaid FMLA leave until the FMLA entitlement runs out. At the date the workers' compensation benefits ends, the employee may elect or the employer may require the use of accrued unpaid leave or PTO benefits.
With regard to the ADA, in most instances the employer needs to offer light duty if it is a reasonable accommodation and does not create an undue hardship on the employer. An employer should stay away from implementing blanket policies which indicate that no light duty is permitted or offered or that light duty is only offered for workplace injuries. Such policies may violate an employer's duty under the ADA to engage in the interactive dialogue with an employee about whether light duty would be a reasonable accommodation under the particular facts and circumstances. An employer can deny an employee's request for reasonable accommodation under the ADA and provide the employee with an alternative reasonable accommodation that requires the employee to remain on the job. An employer can only do this if it is dealing solely with ADA requests and not FMLA leave.
In addition, under the ADA, the employer may need to consider providing an employee with an additional leave of absence as a reasonable accommodation after the employee's FMLA leave entitlement ends because of a disability.
Does an Employer Need to Provide Health Benefits Continuation If an Employee Is on an Extended Leave of Absence Under the ADA?
Unlike the FMLA, the ADA has no separate benefits continuation requirement. Depending on the language of an employer's particular health plan, employees out of work that are not on FMLA leave may become ineligible for benefits and instead have to continue their coverage under COBRA. The employer must carefully review the relevant plan document language, as well as any applicable state law, before initiating COBRA for employees on non-FMLA leaves.
Step 4: Consider Other Laws
While the Bermuda Triangle frequently comes up in the workplace, there may be other and often concurrent employment-related obligations that an employer may have, such as under the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Fair Labor Standards Act (FLSA) and more.