‘Ad hoc’ leave benefits are a discrimination trap

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in Discrimination and Harassment,Human Resources

Sometimes, employers may want to maintain some flexibility to handle unique leave situations. For example, what would your organization do if a valued, loyal and long-term employee developed a terminal disease? Would you allow him a “leave of absence” with continued insurance coverage until his death to save his family from financial ruin?

You can, if you are careful about exactly how you go about it. The arrangement must be truly discretionary—a “gift” from the organization to the employee—or you risk a finding that the coverage is actually a benefit.

Another problem to watch out for: If you make ad hoc arrangements for some employees but don’t extend the same arrangement to others who want the same benefit, you may have a lawsuit on your hands.

Recent case: Teacher Sharon Gill stopped working due to adrenal insufficiency and chronic fatigue syndrome. Her doctor said she would be unable to return for the rest of the school year. Her employer then placed her on unpaid leave and dropped her from the school district health insurance plan. It told Gill she would have to pay the premiums if she wanted continued coverage.

Then Gill discovered that another teacher on unpaid leave was provided with district-paid health insurance. Gill sued, alleging age, sex and disability discrimination. Her attorneys then discovered that there were even more teachers on unpaid leave who also had district-paid insurance coverage.

District officials explained that they decided on an individual basis whether to continue health insurance coverage and had no set rules.

The problem with that explanation was that Gill was the only teacher who didn’t get continued insurance coverage. The court said a jury should decide whether the district discriminated against her based on age, sex or disability. (Gill v. North Greene Unit School District No. 3, et al., No. 06-3157, CD IL, 2007)

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