Many companies today are experiencing a decrease in business as a result of the slowing economy. Companies are struggling to reduce costs, including headcount. Although it may seem logical to eliminate a non-performing or absent employee – after all, they do not maximize the company’s value – that decision may be fraught with unforeseen hazards.  

Although a company may be able to lawfully terminate a non-performing or absent employee, if the employee is not performing or is absent due to a physical or mental condition – or a perceived Focusphysical or mental condition - the company may be subject to significant liability. With the recent changes in the federal Family and Medical Leave Act and upcoming changes in the federal disability and likely in the state sick leave laws, employers should consider the following before letting any employee go:  

1. Determine that the employee’s non-performance or absence is not due to a serious medical condition. Additionally, make sure that the employee’s non-performance or absence is not due to a perceived medical condition. If the company thinks that the employee suffers from a medical condition, even if the employee does not actually have such a condition, the employee may be entitled to certain job protections. State and federal disability laws prohibit employers from discriminating against any employee with a qualified disability.

An employee with such a disability cannot be terminated, disciplined or otherwise suffer an adverse employ-ment action because of that disability. The Federal Americans with Disability Act Amendment, effective on January 1, 2009 will broaden the scope of protected disabilities.  

2. If the employee’s non-performance or absence is due to the employee’s serious medical condition or that of the employee’s immediate family member, make sure that the decision to terminate employment is not in retaliation for taking a lawful leave of absence. Similarly, make sure that the decision to terminate is not in retaliation for complaining about or participating in any investigation of the company’s failure to comply with applicable discrimination laws.  

3. Determine that there has been no confusion between the employee’s entitlement to and length of leave under common law and the reasonable accommodation requirement under disability discrimination laws. For example, an employee is entitled to a leave of absence for a medical condition or birth of a child under the Family and Medical Leave Act or the Massachusetts Maternity Leave Act. Once these leave periods are exhausted, companies may be tempted to terminate employment if the employee does not immediately return to work. In some instances, however, an extended leave may be considered a reasonable accomm-odation for a qualified disability.  

4. Determine that there has been no confusion in the employee’s entitlement to, and length of, a leave versus how that leave is compensated. Laws, including the Family and Medical Leave Act and Massachusetts Maternity Leave Act, require that an eligible employee be given a leave of absence and promise to resume the same or similar employment position. Insurance – such as short-term disability and workers’ compensation – and company policies – such as paid vacation, paid parental leave and/or paid-time-off - provide compensation during the time of leave. Not uncommonly, companies decide to terminate an employee because the employee has been denied or has exhausted short-term disability insurance coverage or has used up paid vacation time or paid maternity leave. Even if the method of compensation during a leave has expired or is not applicable, the employee still may be entitled to be absent for a longer period of time, although perhaps without pay.  

5. If the reason for nonperformance or absence is due to the employee’s medical condition or that of the employee’s immediate family member, the empl-oyer should obtain verification of the condition, expected time until return to work and limitations on job duties from the employee by his/her health care provider. For those companies subject to the Family and Medical Leave Act, failure by the employee to provide appropriate medical verification may be sufficient grounds to designate the absence as an unexcused absence and, thus, grounds for termination of employment. However, if the company has not tentatively designated the leave as Family and Medical Leave and requested the medical verification for such leave, the company may be required to provide a longer period of time for leave than originally calculated by the company.  

The area of absences, both intermittent and full-time, for medical conditions and reasonable accommodations for eligible employees with qualified disabilities is already quite complicated. Pending state and federal legislation and amendments to existing laws will likely increase the burden on employers to be vigilant about employee absences and returns to work to avoid inadvertent liability, particularly in these difficult economic times. Be sure to contact your counsel to stay on top of the latest nuances in this ever-changing area.