The Bermuda Triangle for employers: Navigating ADA, FMLA and Workers’ Comp leave laws

This year, shipping giant UPS agreed to pay a total of $2 million to nearly 90 current and former UPS employees to resolve a disability discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC). 

Part of the suit alleged that the company maintained an inflexible leave policy that unfairly terminated disabled employees when they reached 12 months of leave without engaging in what is known as the “interactive process” required by law under the Americans with Disabilities Act (ADA).  

This case and others serve as a reminder to employers of the complex nature of leave laws. A company may be aware that it would be a violation of federal law to mandate that a disabled employee return to work without providing reasonable accommodations, or to restrict their medical leave to the 12 weeks required by the Family and Medical Leave Act (FMLA). What most employers fail to recognize is that they have a duty beyond the FMLA to provide unpaid leave as a reasonable accommodation under the ADA, unless the accommodation would cause “undue hardship” to the employer.

Further complicating leave issues, state workers’ compensation laws can also require leave after an employee has been injured while working. There is no uniform federal law for workers’ compensation, so each state administers its own set of rules. For employers located in multiple states, that means multiple workers’ compensation laws to consider.  

Sometimes an employee’s leave request is straightforward and requires the application of only one leave law, but not often. There is a good reason why the interaction of the FMLA, ADA, and workers' compensation laws is known as the Bermuda Triangle of employment law.

From a liabilities standpoint, it can be dangerous territory. An employer must know what is required under each of the three laws and when they apply. Violations can result in significant damages for lost wages, back pay, reinstatement, retroactive benefits, compensatory damages and punitive damages.  

Here are the basic steps for an employer to follow to help avoid potential legal pitfalls:

1. Establish which leave laws apply to you as the employer  

  • If the employer has 15 or more employees, then the ADA will apply.  
  • If the employer has 50 or more employees within a 75-mile radius, then the employer is subject to FMLA.  
  • As a general rule, all employers are subject to workers’ compensation laws and each state enacts its own workers’ compensation laws.

2. Determine which laws cover the employee’s leave needs 

  • If the employee has a condition that meets the definition of a disability under the ADA, then the ADA will apply.  
  • If the employee has a serious health condition, then the FMLA will apply.  
  • If the injury is work-related, then workers’ compensation will apply.

 The answers to these questions will determine if any or all three of the leave laws apply.  

3. If more than one law applies, establish which law will apply first  

  • Look at the employee’s benefits and rights under the applicable law. Provide the leave under the law with the greatest rights and benefits for the employee.  
  • If both the FMLA and ADA apply, then the FMLA will cover the employee’s leave first. Any requests for leave after FMLA has ended will be subject to the ADA as an accommodation request. For example, if an employee meets the requirements for leave for both the FMLA and the ADA, the employee may take the 12 weeks of unpaid leave under the FMLA, and when this leave has expired, depending upon the circumstances, the employee may be entitled to additional leave as an accommodation under the ADA. 

In this scenario, to determine whether the employee is entitled to additional leave, the employer must engage in the ADA interactive process. This requires employers to review job functions to establish the essential and nonessential job tasks, identify the barriers to job performance by consulting with the employee to learn about the employee’s limitations, and explore the types of accommodations that would be most effective. 

4. Address reinstatement rights  

  • The employee will have rights upon return from FMLA leave. Under the FMLA, with certain exceptions for key employees, an employee returning to work must be given the same or an equivalent position.
  • The ADA is similar in this requirement as well.  
  • There are a few states that require reinstatement after workers’ compensation leave unless holding the job causes an “undue hardship” to the employer.

5. Assess whether the employee’s return to work will impose a direct threat to the health and safety of the employee or others in the workplace  

  • If the employee poses a significant risk to him/herself or others that cannot be eliminated by a reasonable accommodation, then leave should be continued until the employer and employee complete the interactive process to determine if and when it is safe for the employee to return.

As always, it’s best to consult with an employment law expert or an experienced HR consultant to provide clear guidance on this intricate area of law.