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STD/LTD and Termination

A new employee doesn’t meet FMLA guidelines, but we offer short term for 1 year and long term 1 year until death or medically cured. Can we terminate this person?

Short term disability (STD) and long term disability (LTD) are insurance programs that provide wage replacement benefits for employees who cannot work due to illness, injury, or disability. Neither program necessarily guarantees an employee’s job reinstatement.

When an employer provides STD/LTD there is an implied promise that the employee will be reinstated to his job when his benefits expire, assuming he is able to return to work at such time and there is no employer policy stating otherwise. In this case the policy indicates an employee will continue to be eligible for benefits and, subsequently, implied job reinstatement when he is able to return to work, whenever that may be; albeit, it’s just implied.

It’s not illegal to terminate an employee on STD or LTD. However, it is illegal to terminate an employee with protections under the Americans with Disabilities Act (ADA).

The ADA requires employers to provide reasonable accommodations to employees with covered disabilities unless doing so would cause an undue hardship, meaning a significant difficulty or expense.

There is no all-inclusive list of disabilities covered under the ADA; thus, an individual assessment must be performed. The burden is placed on the employer to initiate an exchange of information needed to determine whether the ADA is applicable.

Under the ADA, an individual is considered to have a disability if he has a physical or mental impairment that substantially limits one or more major life activities or functions, has a record of such an impairment, or is regarded as having such an impairment.

Generally, if the employee’s covered disability prohibits him from currently performing essential job functions with or without reasonable accommodations but he may be able to do so in the future, it’s often recommended to provide a leave of absence to the employee until such date. Of course, this is only required if it doesn’t impose significant hardship on the employer. However, if the employee’s medical information states he will not be able to return to work in the future and the employee is unable to provide further information stating otherwise, there is no requirement to provide an accommodation.

The determination of applicability and reasonable accommodation is ultimately up to the employer based on the individual assessment. But, remember the term disability is meant to be interpreted broadly. Thus, it’s better to focus on your compliance with the ADA than the exclusions of its applicability.

Unfortunately, there is no clear yes or no answer. Once the employee has exhausted any guaranteed leave policy and no leave laws apply, it’s not illegal to terminate the employment relationship. Consider adopting a maximum amount of LTD coverage. Doing so doesn’t automatically allow you to terminate the employee since the ADA must still be considered; however, it will place a timeline on the implied job protection while on LTD.

This entry was posted on Saturday, September 26th, 2015 at 8:48 pm and is filed under
Benefits, Termination.
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