When FMLA Leave Expires: Making Sure Your Next Decisions Comply with the Law FMLA SCENARIO #1: WORKPLACE INJURY

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1 When FMLA Leave Expires: Making Sure Your Next Decisions Comply with the Law Amy D. Hartwig, Esq Charles P. Stevens, Esq FMLA SCENARIO #1: WORKPLACE INJURY You are the Vice President of Human Resources. Bob is age 45 and has been an employee for 20 years. Shortly after the start of his shift on February 18, 2011, Bob reports to Human Resources that he slipped on some coolant which he spilled while he was filling a piece of equipment, but caught himself before he hit the ground. Nevertheless, he claims to have back pain and leaves the facility via ambulance. Bob files the necessary paperwork to request Family and Medical Leave and completes the First Report of Injury form. His FMLA paperwork indicates a severe muscle sprain and anticipates that Bob will be able to return to work in four weeks (March 17, 2011). Human Resources diligently processes the paperwork and approves Bob's request for leave. In addition, you submit a claim to your worker's compensation carrier. Over the course of the next 4 weeks, Bob advises you that he is recovering and slowly making progress. On March 16, 2011, Bob calls you to advise that he cannot return to work and that he needs another 4 weeks off (April 14, 2011). DISCUSSION #1 Family and Medical Leave Act 1. Is it necessary to obtain additional paperwork from Bob on the need for extended leave? Under the FMLA, if an employee determines that a period of leave must be extended beyond the date originally identified, the employer may require notice of the new circumstances (a) (as it relates to notice of foreseeable leave). Moreover, the employer may request status reports when circumstances change (c)(2). However, an employer may also waive the requirement of notice and certification (a) and (g). Best Practice: Employers should request notice of the extension in writing or a new certification on the need for leave to the extent legally permissible (i.e., 30 day or duration of the original certification restriction may apply). 1

2 Americans with Disabilities Act 1. Does Bob suffer from a disability? Assuming Bob is currently unable to use his back to perform a major life activity in the same manner as the majority of the population (e.g., lifting), Bob may be considered disabled. Under the terms of the ADA (as amended), an individual need only be limited in one major life activity to be considered "disabled." The fact that his condition may be temporally limited is no longer a factor that can be considered when analyzing whether a disability exists. 2. What is your next step in addressing the possibility that Bob is disabled? Depending upon the level of specificity in the health care provider's FMLA certification, the Employer may need to collect additional information regarding Bob's condition to determine that it is in fact a disability. Specifically, you will want information on how the condition affects Bob and his major life activities. Best Practice: Timing should be a consideration. Bob is entitled to FMLA leave for a period of 12 weeks and he has not exhausted it yet. Recall that Bob has a worker's compensation injury and reports about his condition may become available through an independent medical examination under the worker's compensation law. To the extent you can put off the disability determination at this time, it is appropriate to do so. Bob has been periodically checking in throughout his leave and advising you of his recovery. On April 14, 2011, he called in to let you know that he needs additional leave, but that he should be able to return to work on May 12, 2011 the day that his 12 weeks of FMLA is exhausted. On the morning of May 12, 2011 (today), as you were grabbing a bagel at the continental breakfast and thinking about the insightful comments awaiting you during the FMLA presentation at the MBF seminar, you felt your phone vibrating in your pocket. It was Bob. He wanted to let you know that he is still not able to return to work in any capacity but that his doctor thinks it may be possible on May 19th in a diminished capacity. 2

3 DISCUSSION #2 1. Should Bob be terminated? What laws should we be thinking about? a. Family and Medical Leave i. Is the Employer required to take any further action with respect to the Family and Medical Leave? No. The Employer has provided Bob with 12 weeks of FMLA leave in a 12- month period. Bob has exhausted this leave and is entitled to no further leave under the FMLA. [Caveat: Make sure any adverse action you take at this time is not taken in retaliation for FMLA use.] ii. Since Bob has failed to return to work at the expiration of his FMLA leave, do you require Bob to pay back any insurance premiums the Employer paid on his behalf while he was on FMLA leave? No. There are only certain situations where an employer can recover unpaid insurance premiums from an individual taking FMLA leave (a)(3). This is not one of the permitted situations because the employee's own serious health condition is preventing him from returning to his position. iii. Do you fill Bob's job position? Great question. See below. iv. Do you terminate Bob? Another great question. See below. b. Worker's Compensation Under worker's compensation, it is too early to terminate Bob. An employer which prematurely terminates an employee's employment will likely find itself the target of a claim under Wis. Stat (3) (a wrongful refusal to rehire). Under that statute, an employer who, without reasonable cause, refuses to rehire an employee who is injured in the course of employment, where suitable employment is available within the employee's qualifications and restrictions, has liability to pay up to one year's wages. Best Practice: In general, an analysis of available work following the point the employee has reached his or her healing plateau is the point to evaluate termination of employment. 3

4 With respect to filling the employee's position, the facts of the situation will drive your analysis. Under the worker's compensation law, there is no obligation to hold open the employee's position, but permanently replacing an employee may be a violation of Wis. Stat (3) if the employee only needs a minimal amount of time off and there is no demonstrable immediate need to put a permanent replacement in that role. c. Americans with Disabilities Act i. Is the Employer required to take any further action with respect to the Americans with Disabilities Act? The Employer must evaluate whether it has an obligation to reasonably accommodate Bob's disability, if any. One accommodation that can be provided under the ADA is a leave of absence. Nevertheless, an indefinite leave of absence is not a reasonable accommodation and may represent an undue hardship. At this point, Bob has requested one additional week of leave. If this additional time meant that Bob would return to work in full capacity, this is very likely a reasonable request and you permit the extended leave under the ADA. But Bob has not stated he would be able to return to work in a full capacity, rather he has suggested that he could return to work in a diminished capacity. What are your options? If you concede that Bob is disabled, which, under the new ADA, is probably correct, then you have to examine whether a reasonable accommodation for his injury is available. Reasonable accommodations require that the parties engage in the interactive process i.e., "exploring with the worker the possibility of a reasonable accommodation." See, e.g., Hansen v. Henderson, 233 F.3d 521, 523 (7 th Cir. 2000). It may be a good time to start reviewing your leave policies and past practices with regard to the amount of leave you have granted other similarly-situated, nondisabled employees. If you have provided at least 13 weeks of leave, wait out the week and see whether Bob my return to work and, if so, with what restrictions. On May 19, 2011, Bob once again contacts you and says that his doctor has diagnosed him with a bulging disc in his lumbar spine and still will not permit him to come back to work. In fact the doctor is not sure when he can return. On May 21, 2011, you are walking through the cafeteria and overhear two employees, Lenny and Carl, discussing Bob. Specifically, you hear Carl state that on February 17, 2011 (the day of the big blizzard) Bob came into work on the second shift talking about how he pulled a muscle shoveling off his sidewalk. 4

5 DISCUSSION # 3: Family and Medical Leave 1. Does the discovery of this information affect the provision of FMLA leave? No. A serious health condition does not need to be incurred within the course and scope of work. Americans with Disabilities Act 1. Does the discovery of this information affect whether Bob has a disability? No. An impairment that affects a major life activity does not need to be incurred within the course and scope of work. Worker's Compensation 1. Does the discovery of this information affect Bob's eligibility for worker's compensation? Potentially. Bob's injury may not have been caused by the workplace slip. Consequently, Bob may not be eligible for worker's compensation protection. Based upon this new information, it may be appropriate to work with your worker's compensation carrier to determine whether it should obtain an independent medical examination focusing on causation, if you have not already done so. 2. Is it appropriate to fire Bob now? As discussed above, it is generally inadvisable to terminate an individual on worker's compensation until he or she reaches a healing plateau. Even with your suspicion that the injury was not "caused" by work, you remain exposed to a Wis. Stat (3) claim. If you sit tight and ride out the injury until a healing plateau is reached, you reduce your worker's compensation exposure because you can now definitively say that the employee is not capable of working for the Employer in any position you have. The independent medical examination is highly recommended at this point because it could result in the insurance carrier cutting off payments to Bob if the IME finds no causation. If benefits are cut off, the employee may be motivated to return to work. The Employer offers light duty to its employees on worker's compensation leave. Specifically, an employee will be placed into a light duty assignment in order to try to get the employee to begin work hardening and for cost savings on the Employer's worker's compensation experience rating. The program is offered to all employees, but with a caveat that it is first available to 5

6 employees who are on worker's compensation. Further, an employee is only eligible to be on for so long as he or she shows continued improvement in recovery. On May 25, 2011, Bob submits to an independent medical examination at the Employer's insistence. The Employer-appointed physician recommends that Bob begin light duty. The Employer offers Bob an opportunity to do filing work in the office on a reduced schedule. Bob refuses the assignment stating that it is beneath him. DISCUSSION #4 Family and Medical Leave Act 1. Is Bob's refusal to accept light duty a problem under the FMLA? First, recall that Bob is no longer covered by the FMLA. Therefore, FMLA does not apply. However, for the sake of argument let us assume that the work hardening program was offered in week 10. In that event, there is still no issue with the FMLA. Under the FMLA, an employee is not required to accept a light duty assignment. See, (d), (d)(2). If an employee refuses to accept such an assignment, the employee may no longer qualify for payments from worker's compensation (d)(2). If the employee does accept a light duty assignment, the employee's time spent in such light duty assignment cannot be counted against his/her FMLA leave entitlement. See, DOL Comments to Worker's Compensation 1. Does Bob's refusal to accept the offered light duty assignment affect his worker's compensation benefits and protections? Yes. He may no longer qualify for temporary total disability benefits. Make sure to inform your carrier of Bob's refusal. 2. So, can we fire Bob now? The issue of causation and the extent of the injury are still outstanding; therefore, a termination decision has some inherent risk. In addition, exposure still exists until his doctor declares him to have reached a healing plateau, at which time you would review available positions within his restrictions and qualifications. Best Practice: Wait for his doctor say the healing plateau has been reached and then make a decision. 6

7 Americans with Disabilities Act 1. Does providing the work hardening program just to employees on worker's compensation or to employees on worker's compensation first present a problem under the ADA? A work hardening program which is only available to employees who are on worker's compensation or which is preferential to such employees is not per se discriminatory under the ADA. However, if an individual with a non-workplace injury requests an accommodation under the program and the employer refuses it, the employer will need to find a different method to accommodate the employee. Note that the existence of such a work hardening program may be problematic if the duties that the employee performs in such role are related to the duties of the employee's normal job because it will undercut the employer's ability to argue that a reasonable accommodation is an undue hardship. 2. What if the work hardening program did not require that the employee show improvement? The fact pattern discusses that an employee is eligible to be in the program until he or she ceases to show improvement. This could be problematic because it fails to detail how progress is measured and how often such measurements occur. Employers have to be careful not to create a permanent position for the employee. To the extent the employer sponsors light duty assignments or work hardening assignments, the employer should specify how long employees may remain on such assignment and how often the employee's status will be revisited. Bob's physician certifies that he has reached a healing plateau and issues permanent restrictions. Specifically, Bob is no longer capable of lifting items above his head that weigh 20 pounds. He also has been advised to take time to stretch for 10 minutes every 2 hours. The essential functions of Bob's position require him to repetitively lift 40 pounds above his head. He must also be able to twist, lift 40 pounds from a shelf to a table in the center of the room and reach above his head to release valves on the machine he operates. Aside from the temporary light duty work you offered Bob, there are no other open positions available within his restrictions and qualifications at this time. DISCUSSION #5 Americans with Disabilities Act 1. Is it permissible to terminate Bob now? Provided that the parties have engaged in the interactive process and have determined that there are no open positions available within his restrictions (with or without a reasonable 7

8 accommodation) and qualifications, it is permissible to terminate Bob's employment. Nevertheless, the letter to Bob should be carefully tailored to inform him that he should apply for open positions in the future when his condition so permits and, provided he is otherwise qualified for the position, he will be considered for such open position. Best Practice: When discussing these issues, engage in a dialogue about the open and available positions with the Employer within his qualifications and restrictions (with or without a reasonable accommodation). Worker's Compensation 1. Is it permissible to terminate Bob now? Because Bob has finally reached a healing plateau, it is now less risky to terminate Bob. As stated in the example, there is work available that Bob is otherwise capable of performing within his qualifications and restrictions (with or without a reasonable accommodation). A dispute may still be present regarding "causation" or the extent of Bob's injuries. These are issues for the worker's compensation carrier to defend against. However, for purposes of a Wis. Stat (3) defense, the employer met its obligations and can now argue that: (1) if it wanted to refuse to hire based upon the alleged work-related injury, it would have terminated sooner; and (2) there is no available work within the qualifications and permanent restrictions the latter being the reason for termination. Best Practice: When discussing these issues, engage in a dialogue about the open and available positions with the Employer within Bob's qualifications and restrictions (with or without a reasonable accommodation). Other Considerations 1. COBRA a. Do you provide a COBRA notice when the employee is required to start paying for the full cost of his or her health care? You need to provide a COBRA notice whenever you start requiring the employee to pay the full cost of his coverage, not just the employee share. You can require this full payment when the employee's FMLA rights expire or at a later time, depending on the policy you adopt. Most employers do not require employees to pay for coverage while they are out on a worker's compensation absence. b. Does the COBRA information you provide at the time of the qualifying event communicate the appropriate information concerning extensions beyond the initial 18 months for disability? 8

9 FMLA SCENARIO #2: NON-WORKPLACE INJURY Sally Jones has been an employee for 25 years. On February 18, 2011, Sally injures her back in a car accident on Main Street in front of the local grocery store. Sally files the necessary paperwork to request Family and Medical Leave. Her paperwork anticipates that Sally will be able to return to work on May 12, Human Resources diligently processes the paperwork and approves Sally's request for leave. Under the terms of the Employer's FMLA policy, employees are required to periodically report back to the Employer with the progress of their healing. However, it rarely happens and the Employer does not enforce it. Sally has not communicated details about her condition during her period of FMLA leave. This morning (May 12, 2011), you received a call from the office. Sally has called into work and stated that she is not able to come in today and that she is not entirely sure when she will be able to return. DISCUSSION #1 Family and Medical Leave Act 1. Is it necessary to obtain additional paperwork from Sally on the need for extended leave? Sally has exhausted all leave to which she is entitled under the FMLA. It is unnecessary to seek further information from her at this point for FMLA purposes. 2. Does the FMLA policy force substitution of other paid leave? Americans with Disabilities Act 1. Does Sally suffer from a disability? Like Bob, assuming Sally is currently unable to use her back to perform a major life activity in the same manner as the majority of the population (e.g., lifting), Sally may be considered disabled. Under the terms of the ADA (as amended), an individual need only be limited in one major life activity to be considered "disabled." The fact that her condition may be temporally limited is no longer a factor that can be considered when analyzing whether a disability exists. 2. What is your next step in addressing the possibility that Sally is disabled? Also like Bob, depending upon the level of specificity in the health care provider's FMLA certification, the Employer may need to collect additional information regarding Sally's condition to determine that it is in fact a disability. Specifically, you will want information on how the condition affects Sally and her major life activities. 9

10 Best Practice: Timing should be a consideration. At the initial request for leave, Sally was entitled to FMLA leave for a period of 12 weeks. FMLA would constitute a reasonable accommodation for a disability. As a general practice, it is a good idea to send a letter to the employee about two weeks prior to the end of FMLA leave reminding the employee that FMLA is about to expire and if the employee will be unable to return by that day, he or she should return an updated medical certification. If the medical certification is not received within the stated timeframe, the Employer will assume that the employee is planning to return to work. Unlike Bob, Sally is not entitled to worker's compensation. However, she does have other avenues which may produce similar records. For example, if the Employer's short-term disability program is self-funded, such information may be considered in the context of determining disability. Further, the Employer may wish to send Sally for a medical examination at the Employer's expense to determine whether she is disabled. Such examinations may occur where they are job related and consistent with business necessity. Again, to the extent you can put off the disability determination at this time, it may be appropriate to do so. 3. Do you have a process in place where the Employer does not automatically terminate an employee at the conclusion of his or her 12 weeks of FMLA leave? 4. Do you have a process in place for ensuring that you have properly engaged in an interactive dialogue about reasonable accommodations with an employee who may be protected by state or federal disability law? Short-Term Disability Policy (Some Considerations) 1. Is your STD policy structured to be paid out of regular payroll as opposed to being an insured benefit? 2. Is your STD policy coordinated with sick days/vacation days such that it requires all available leave to be taken first and only then would the employee go on STD? 3. Does your STD policy provide for a waiting period if the absence is due to sickness as opposed to accident or hospitalization? 4. Does your STD policy provide for less than 100% wage continuation? It is within the employer's discretion to set the percentage of wage continuation. 5. If employees are required to pay a share of the cost of health coverage, does your STD policy allow for continuing deduction of the employee's share while the employee is out? Do other deductions come out of STD benefits, such as 401(k), supplemental life insurance, and other payments? If not, what happens to these benefits? 10

11 Non-FMLA Medical Leave of Absence Policy 1. Do you have a policy for addressing an employee s need for medical leave in situations where he or she is not covered by the FMLA or has run out of FMLA leave? 2. Does your non-fmla medical leave policy have procedures for collecting and weighing information and uniformly administering extensions of leave? 3. Does your non-fmla medical leave policy provide for continuation of health care for a period of time? The May 12, 2011 phone call continues. Sally describes her back injury and states how she is barely able to move. She then requests further information from you about the Employer s short term disability program and how long it will last. She also states that it is her understanding that the Employer will continue to pay its portion of the health plan coverage through the duration of short term disability benefits. When you respond that medical coverage is not employer-paid for the duration of the benefit, Sally seems a little shaken. She abruptly ends the call. The next day, Sally reports for work with a full release to return to duty. You have doubts about the quality of the release. DISCUSSION #2 Americans with Disabilities Act Under the ADA, it is permissible to refuse to return the employee to a job where the employee poses a danger to herself or others. Under these circumstances, you may want to consider placing Sally on a leave of absence pending your receipt of a medical certification from a doctor of the Employer s choosing which details Sally s ability to perform the essential functions on her position. Recall that the key to this analysis is that the medical examination must be job-related and consistent with business necessity. You send Sally to a doctor selected by the Employer. The Employer s doctor s certification also specifies that Sally can return to work, but only on a restricted basis. Sally cannot lift items above her head that weigh 20 pounds. She also has been instructed to stretch for 10 minutes every 2 hours. Further, she is incapable of working a full-time shift and is restricted to 4 hours per day, for 1 to 3 days per week over the next 5 months. There is no indication whether this is a 11

12 temporary or permanent restriction. You make a mental note to make sure this gets clarified on future employee examinations. Like Bob, the essential functions of Sally's position require her to repetitively lift 40 pounds above her head. She must also be able to twist, lift 40 pounds from a shelf a table in the center of the room and reach above her head to release valves on the machine she operates. There is light duty work available. While thinking about this, Sally tells you that her sister, who also works at the facility and works right next to Sally, has volunteered to lift the items that must be moved over Sally s head. DISCUSSION #3 Americans with Disabilities Act There is no affirmative duty to place Sally into a light duty position. Further, unlike Bob s workplace injury claim, unless there is a latent discrimination claim looming there is no financial advantage to making such a move. Consequently, you may wish to just examine the reasonable accommodation request set forth by Sally i.e., limited duty. Should you choose to do this, be cautious of whether such action may be viewed as discrimination against the individual without the workplace injury. With regard to the offer made by Sally s sister, there are two pieces to Sally s accommodation lifting and attendance in a full-time position. The Employer must engage in the interactive process with Sally and determine whether her proposed accommodation constitutes a reasonable accommodation. In the Seventh Circuit, an individual who is not able to meet the Employer s attendance requirements, with or without accommodation, is not a qualified individual and, therefore, not covered by the ADA. See, e.g., Byrne v. Avon Products, Inc., 328 F.3d 379 (7 th Cir. 2003). Any accommodation that is offered to Sally should be evaluated to determine whether the accommodation constitutes an undue hardship. Care should be taken in this inquiry because the actions taken for one employee will be fair game for a request from another employee. COBRA 1. Does Sally remain eligible to participate in the health plan? You decide to place Sally into the light duty role. Two months into the assignment, Sally s doctor changes her limitations. Specifically, he says that Sally is now capable of working 30 hours per week, but may need breaks on occasion and may need to be out 1 to 2 days per week on an intermittent basis but those days are on an as needed basis as determined by Sally. 12

13 DISCUSSION #4 Americans with Disabilities Act 1. Is providing the random, unscheduled leave a reasonable accommodation? It depends upon the Employer s operations whether this constitutes a reasonable accommodation. If scheduling at the facility is fluid, where multiple employees are on site to provide breaks and it is possible to take one of these rotating employees and place him or her on the machine, this may be a reasonable accommodation. If there is no one available to perform Sally s job on short notice, this may not be a reasonable accommodation \