Job Accommodation Network

IV. REASONABLE ACCOMMODATION FOR EMPLOYEES ON LEAVE AND FORMER EMPLOYEES

A. Health and Disability Insurance
B. Bonuses and Promotions
C. Reductions in Force and Layoffs

IV. REASONABLE ACCOMMODATION FOR EMPLOYEES ON LEAVE AND FORMER EMPLOYEES

The ADA requires employers to provide accommodations to ensure that employees with disabilities receive equal benefits of employment. For employees on leave and former employees, benefits of employment may include health and disability insurance, job protection, and bonuses and promotions.

A. Health and Disability Insurance

1. Does the ADA apply to employer-sponsored benefits such as health insurance and short and long term disability?

According to the EEOC, the interplay between the nondiscrimination principles of the
ADA and employer-sponsored benefits such as health insurance and short and long term disability can be very complex. The EEOC has two publications that may help employers understand how the ADA applies to employer-sponsored benefits:

Interim Enforcement Guidance On the Application of the Americans With Disabilities Act of 1990 to Disability-Based Distinctions In Employer Provided Health Insurance at http://www.eeoc.gov/policy/docs/health.html.

Employee Benefits at http://www.eeoc.gov/policy/docs/benefits.html.

2. When employers offer long term disability insurance, can they condition the receipt of payments on termination of employment? Does this potentially violate the ADA's requirement that employers consider holding jobs for people who take leave as an accommodation (assuming the employee has a disability and plans to return to work at some point)?

Generally this practice does not violate the ADA. Long term disability is a benefit of employment that employers are free to offer or not. As such, employers set the parameters of the benefit. An employer might violate the ADA if the employer's purpose was to evade its obligations under the ADA, but that would be difficult to prove since the employer did not have to offer the benefit in the first place.

3. Can an employer terminate or reduce an individual's health insurance benefits because he or she is working fewer hours due to a disability?

Yes, according to the EEOC. The ADA does not prohibit the adoption of health insurance eligibility requirements that do not discriminate on the basis of disability, as long as such requirements are applied in the same manner to all employees. A requirement that employees work a certain number of hours to remain eligible for health insurance benefits does not discriminate on the basis of disability. It limits both individuals with and without disabilities. Thus, for example, an employee who works reduces hours for some other reason, such as attending school, would also be subject to a reduction or loss of health insurance benefits.

From an EEOC informal guidance letter dated January 4, 1995.

B. Bonuses and Promotions

If an employer bases bonuses or promotions on employee performance records and attendance, can the employer penalize an employee for work missed during leave taken as a reasonable accommodation?

No, according to the EEOC, to do so would be retaliation for the employee's use of a reasonable accommodation to which he/she is entitled under the law. Moreover, such punishment would make the leave an ineffective accommodation, thus making an employer liable for failing to provide a reasonable accommodation.

From Reasonable Accommodation and Undue Hardship under the ADA, question 19, at http://www.eeoc.gov/policy/docs/accommodation.html.

C. Reductions in Force and Layoffs

1. Does the ADA protect employees with disabilities from termination during a reduction in force or from being laid off when business is slow?

Although the ADA protects individuals with disabilities against discrimination on the basis of disability, employees with disabilities are not protected against non-discriminatory layoffs. When deciding to terminate or layoff employees, employers need to make sure that their decisions are based on business needs, rather than on a desire to get rid of employees with disabilities. For example, employers can base their layoff decisions on such non-discriminatory criteria as productivity, seniority, or job category. However, if an employer bases its layoff decisions on productivity of employees, it cannot penalize employees for accommodations that were provided under the ADA. The EEOC gives the following example:

Company X is having a reduction-in-force. The company decides that any employee who has missed more than four weeks in the past year will be terminated. An employee took five weeks of leave for treatment of his disability. The company cannot count those five weeks in determining whether to terminate this employee.

From Reasonable Accommodation and Undue Hardship under the ADA, question 19, at http://www.eeoc.gov/policy/docs/accommodation.html.

2. Are former employees covered by the ADA?

Former employees are protected by the ADA when they are subjected to discrimination arising from the former employment relationship. For example, an employer cannot release confidential medical information about a former employee.

From Threshold Issues (EEOC Guidance) at http://www.eeoc.gov/policy/docs/threshold.html.