Never Ending Leaves of Absence

One complicated issue that comes up for many employers is when an employee has exhausted all protected leave, but then requests an extension of leave as a reasonable accommodation for a disability or medical condition. Particularly in situations when employees request multiple extensions, employers often wonder:

• Whether they have to continue “holding the position.”
• Whether they must continue health care coverage.
• At what point is it reasonable to terminate?

Holding the Position

PDL/CFRA/FMLA

First, if the employee is on a protected leave such as Pregnancy Disability Leave (PDL), California Family Rights Act Leave (CFRA), and/or Family and Medical Leave (FMLA), they have a formal “right to reinstatement” to an equivalent position upon return. This means the employer is obligated to “hold the position” under almost all circumstances.

If the employee is not eligible for these leaves or has exhausted these leave entitlements, it becomes a bit more complicated. Remember, even if your employee does not qualify for these protected leaves, you must still consider providing them an unpaid leave of absence as a reasonable accommodation under the federal Americans with Disabilities Act (ADA—applies if you have 15 or more employees) and/or California’s Fair Employment and Housing Act (FEHA—applies if you have 5 or more employees).

ADA/FEHA Leave Only

When an employee is on an ADA/FEHA-related leave only, you must generally hold the position, but there may be circumstances when the employer is not required to do so.

For example, if the employer can show that holding the position creates an undue hardship and they need to fill it, the employer may do so, but then must offer the employee any vacant position for which they are qualified, as follows:

• The employer must first offer any available positions equivalent in pay and seniority.
• The employer may only offer positions that result in less pay or status if that is all that is available.
• The employer is not obligated to create a new position for the employee that does not exist.

Continuing Health Care Coverage

If the employee is on PDL, CFRA, and/or FMLA, their health care benefits must continue as if they were currently working for you, for the entire duration of those leaves. You may require the employee to still pay their share of the premiums. Be sure to arrange in advance how the employee will cover their premiums when you aren’t able to make payroll deductions (e.g., cut you a separate check each month, pay upon return, etc.)

If the employee is on an ADA/FEHA-related leave only, then whether you must continue health care benefits depends on your specific policies—be sure to check with your benefits carrier. Also, if you continue health care benefits for employees in a similar leave status (for example, during unpaid personal leaves of absence), then you may be required to continue health care coverage during ADA/FEHA leaves as well.

Ending the Relationship

Employers should not take it lightly when they are considering ending the employment relationship instead of granting an extended leave request, as this often carries legal risk. While courts have held that employers are not required to accommodate an “indefinite” leave, there is no bright-line rule on how long an employer must hold a position after protected leave entitlements are exhausted. In many cases where courts have found the employer satisfied their accommodation requirements, the employer often held the position for up to a year or more.

For this reason, employers should not implement “maximum leave policies” resulting in automatic termination after a set period of time. Instead, employers should evaluate on a case-by-case basis whether they can reasonably accommodate the employee or whether the extended leave request would cause an “undue hardship.”

Because the “undue hardship” standard is often difficult for employers to satisfy, it is recommended to get guidance before making the decision to terminate. The Job Accommodation Network has helpful resources for employers on reasonable accommodation obligations.