The question of whether an employer can terminate a worker who is currently on a medical absence is legally complex and sensitive. While employment is often considered “at-will,” meaning an employee can be terminated at any time for any non-discriminatory reason, a medical leave introduces significant federal and state protections. The law does not grant absolute job immunity during an absence, but any termination decision made during this period is subject to intense legal scrutiny. Employers must proceed with caution and be prepared to prove that the decision was based on factors entirely separate from the employee’s medical condition or their need for time off.
The General Rule of Termination Legality
An employee’s status as being on medical leave does not automatically shield them from termination. A worker on leave has no greater or lesser protection from adverse employment action than an employee actively working. If a business decision or a performance issue would have resulted in termination regardless of the leave, the action may still be lawful. The termination must be demonstrably independent of the protected status. The employer carries the burden of proving that the employment relationship would have ended even if the employee had never requested or taken a medical leave of absence.
Family and Medical Leave Act Protection
The Family and Medical Leave Act (FMLA) provides eligible employees with a right to job-protected leave for qualifying medical and family reasons. This federal law applies to private-sector employers with 50 or more employees within a 75-mile radius, as well as all public agencies. To be eligible, an individual must have worked for the employer for at least 12 months and completed a minimum of 1,250 hours of service in the preceding 12-month period.
The core protection of the FMLA is the guarantee of up to 12 workweeks of unpaid leave within a 12-month period. Upon the employee’s return, the employer must restore them to their original job or to an equivalent position. An equivalent position must be virtually identical in terms of pay, benefits, and conditions of employment.
When Termination Is Permitted While on FMLA Leave
The protection offered by the FMLA is not an absolute bar to termination, and specific exceptions allow an employer to end the employment relationship. If the employer can prove the employee would have been terminated even if they had not taken leave, the termination is generally permissible. This includes a documented reduction in force (RIF) or a company reorganization that eliminates the employee’s position, provided the decision was independent of the leave and applied consistently across all employees.
Termination may also occur if the employee commits fraud or violates a consistently applied company policy while on leave. For example, if an employee is found working a second job in violation of a documented policy against moonlighting, the employer may proceed with termination. Additionally, an employer may deny job restoration to a highly compensated “key employee” if replacing the employee is necessary to prevent substantial economic injury to the company. When the employee exhausts their full 12-week FMLA entitlement and is medically unable to return to work, the employer’s obligation under the FMLA ceases.
Americans with Disabilities Act and Reasonable Accommodation
For medical leaves not covered by the FMLA or for employees who require time off beyond the 12-week limit, the Americans with Disabilities Act (ADA) often applies. The ADA protects qualified individuals with a disability, defined as a physical or mental impairment that substantially limits one or more major life activities. Termination of an employee with a disability may constitute discrimination if the employee could have performed the essential functions of their job with a reasonable accommodation.
A reasonable accommodation can include a modification or adjustment to the job or work environment, and additional unpaid leave is often considered one such accommodation. The employer must engage in an “interactive process” with the employee to determine if an accommodation exists that would allow the employee to return to work. The employer is not required to provide an accommodation if it would cause an “undue hardship,” defined as significant difficulty or expense to the business. Determining undue hardship considers the nature and cost of the accommodation relative to the employer’s size and financial resources.
Legitimate, Non-Retaliatory Reasons for Termination
When an employer terminates an employee on medical leave, they must offer a legitimate, non-retaliatory reason and provide evidence that the reason is not a pretext for discrimination or retaliation. The employer must demonstrate that the termination decision was finalized and would have been executed regardless of the employee’s protected leave status. The timing of the termination is significant, as a decision made immediately after a leave request can raise suspicion of unlawful retaliation.
Common examples of legitimate reasons include the elimination of the employee’s specific role due to a company-wide restructuring or a complete cessation of operations within a particular department. Termination based on performance issues is also legitimate, but the poor performance must have been documented, actionable, and occurred prior to the employee taking leave. The employer must show a consistent history of terminating other, non-protected employees for similar poor performance to avoid the appearance of disparate treatment.
The Role of State and Local Laws
Federal laws like the FMLA and the ADA establish a minimum floor of protection, but state and local laws often provide broader or more generous benefits to employees. Many states have their own family and medical leave acts that may cover smaller employers not subject to FMLA or offer longer leave periods, sometimes up to 16 or 26 weeks. These state-level laws may also define an “eligible employee” or a “covered family member” more expansively than federal law.
A growing number of states and municipalities have enacted mandatory paid sick leave or paid family and medical leave programs. These local provisions can run concurrently with FMLA or provide additional protection when an employee is nearing the limit of their federal entitlement. Employers must comply with the statute that offers the employee the greatest protection, as state laws supplement federal requirements.
Essential Steps for Risk Mitigation
Due to the high risk of facing a retaliation claim, employers must follow a rigorous process to mitigate legal exposure when contemplating termination during medical leave. Thorough documentation is the most important step, establishing that the reason for termination is unrelated to the employee’s leave or health condition. This includes retaining all written performance warnings, disciplinary records, and objective criteria used in decisions like a Reduction in Force.
Before any action is taken, the employer should consult with human resources professionals and legal counsel to review the documentation and rationale. Consistency in policy application is paramount; the employer must ensure that other employees who engaged in similar conduct or whose positions were similarly situated during a RIF were treated in the same manner. This objective process helps demonstrate that the employment decision was based on a legitimate business reason.