Human Resource Blog

Best Practice for Termination of Employee on Short Term Disability

What is a best practice for terminating an employee on STD due to a business need for replacement?

That depends. First, lets make sure you really CAN terminate this employee.

If the employer has more than 50 employees, and the employee has been on FMLA leave for less than 12 weeks, there isnt one. Thats because the employee is legally entitled to up to 12 weeks of unpaid, job-protected leave under the federal FMLA, the Family and Medical Leave Act. Employees must have worked for the employer for a year and put in at least 1,250 hours in the past 12 months to qualify. But, FMLA does not include any exclusion for situations where the absence is an undue hardship for the employer. Employees are entitled to this leave, whether it is a hardship or not. An employer faced with this situation can hire a temporary employee or use a temp service, or temporarily reassign another worker. However, the employee must be given his or her job back when he/she returns from FMLA leave.

Not every employee on Short Term Disability or STD is on FMLA, either. In order for STD or medical leave to count as FMLA, the employer must inform the employee at the beginning of leave, that it is FMLA. The employer cannot do that retroactively. If the employer fails to inform the employee in advance, the employee could be entitled to 12 weeks of paid STD plus 12 weeks of unpaid FMLA.

Lets assume that all these regulations have been followed. You informed the employee at the beginning of STD that he or she was on FMLA, and the 12-week time limit for unpaid leave is approaching. The best practice is for the employer to send the employee a certified letter in week 10 or week 11 that states the employee is required to return to work by a specific date, in order to avoid termination. For example, an employee might receive a letter on July 17 that he or she needs to report back to work no later than July 29, or face termination. It is best to time the letter to arrive at least one week in advance of the return date.

It is wise for the employer to require that the employee be certified by his or her doctor as fit for duty, prior to returning to work. The letter should clearly state that such certification is required, and include the form for it. Note that the employer is not required in most cases to put the employee on light duty or make other arrangements or adjustments to the employees usual duties. The employee can either return to his or her previous job on the due date, or they cannot. If they cannot the employer is justified in terminating the employee.

In a few cases, the employer may be obligated to make reasonable accommodations for an employee who is disabled. However, the EEOC definition of disabled is pretty severe. In order to qualify, an employee must be unable to complete one or more normal life functions, like bathing, dressing himself, using public transportation or using a phone book. it is up to the employee to request such accommodations, and that situation is rare.