A Leave of Absence (LOA) is an approved, temporary separation from an employee’s primary job, typically granted for medical conditions, family needs, or personal matters. Whether an individual can work during this time depends entirely on the specific type of leave, the employment contract, and relevant laws. Because an LOA is an authorized pause, any outside employment must be carefully scrutinized to ensure it does not contradict the reason for the absence or violate established policies.
Understanding Your Employer’s Policies
Before seeking outside work, employees must review the primary employer’s internal guidelines on supplemental employment. Company policies often restrict holding a second job or engaging in freelance work, even during an approved leave. This information is usually detailed in the employee handbook or the specific paperwork provided when the LOA was approved.
Employers have the right to enforce policies that prohibit all outside employment, provided these rules are applied uniformly to every employee, regardless of the reason for their leave. Applying a non-discriminatory policy ensures the company is not singling out employees on a specific type of leave. Violating an established policy on outside employment can be grounds for immediate termination of the leave and subsequent dismissal from the company.
Working While on FMLA or General Medical Leave
When an employee is on medical leave, such as leave protected by the Family and Medical Leave Act (FMLA), the ability to work elsewhere depends on the medical necessity of the time off. While FMLA does not explicitly prohibit a second job, the employer can enforce a uniformly applied policy against secondary employment.
If outside work contradicts the medical need for the leave, the employer may challenge the legitimacy of the FMLA request. For example, taking leave for a back injury that prevents sitting, yet accepting a job requiring long periods of standing, undermines the authorized absence. The employee’s physician must certify that any activity, including part-time work, is consistent with the medical condition and treatment plan.
Strict Rules for Disability and Insurance Benefits
Working while receiving disability payments—such as Short-Term Disability (STD), Long-Term Disability (LTD), or Social Security Disability Insurance (SSDI)—is governed by strict rules. These benefits require that the recipient be medically unable to perform substantial work. Any earning activity can be interpreted as evidence that the individual is not disabled, jeopardizing the claim.
Private LTD policies often contain “own-occupation” or “any-occupation” clauses defining prohibited work. Exceeding specific income thresholds or working more than a defined number of hours can lead to a reduction or termination of private benefits.
For federal SSDI, the Social Security Administration (SSA) uses the metric of Substantial Gainful Activity (SGA) to assess a person’s ability to work. In 2024, if a non-blind individual earns more than $\$1,550$ gross per month, the SSA considers this SGA and will likely terminate benefits.
Working any job, even part-time or freelance, while claiming disability is risky because it conflicts with the claim of inability to work. Insurance carriers and the SSA actively monitor earnings for evidence of misrepresentation. If outside work is discovered, benefits are typically halted, and the recipient may be required to repay all funds received since the work began.
Defining What Counts as Work
Restrictions on working while on leave extend beyond traditional employment to include a wide range of compensated activities. Any exchange of time or labor for monetary compensation, regardless of the amount or formality, is likely to be scrutinized as work. This includes freelance writing, consulting, or performing services as an independent contractor.
Payment does not need to be a regular salary; one-time payments or retainer fees can qualify as earnings. Even starting a new business venture that requires active management and labor can be considered work, even if it generates little initial profit. Passive income sources, such as investment returns or rental income from pre-existing properties, are generally not classified as work activity because they do not require active time or effort.
The Risks and Consequences of Unauthorized Work
Engaging in unauthorized work while on an LOA carries serious consequences across all types of leave. The most common result is the termination of the LOA and the employee’s primary employment, especially if the outside work violates the conditions of the leave or a uniformly applied company policy.
If the work violates the terms of a disability claim, the financial repercussions are substantial. The employee faces the loss of income replacement benefits and the requirement to repay benefits already received, creating a debt burden. Unauthorized work may also cause the loss of job protection, the lapse of employer-provided benefits like health insurance continuation, and potential legal action from the insurance provider for fraud.
Navigating the Decision and Communicating with HR
The best approach when considering outside work during an LOA is to maintain transparency with the primary employer. Before undertaking any external activity, an employee should seek clarification and formal approval from the Human Resources (HR) department. All communication regarding working while on leave must be documented and submitted in writing to create a verifiable paper trail.
If the need for income is the primary motivator, employees should first explore alternatives, such as utilizing accrued paid time off or sick leave benefits. Communicating openly about the need for supplemental income or a change in medical status demonstrates good faith and helps mitigate the risk of a later finding of deceit. Concealing work activity will almost always be interpreted negatively and can lead to severe penalties.