Q. How do we handle an employee who is on an indefinite leave of absence and does not know when he will be able to return to work?
A. In Texas, the best way to avoid this problem is to institute a neutral policy that limits all leaves of absences in excess of a given time frame (for instance, four to six months). The key is that an employer must apply this policy neutrally to every employee who takes any type of leave.
At the end of the designated leave period, an employee will automatically be considered discharged simply because of the policy.
Note: For purposes of COBRA continuation insurance notices, the discharge event would occur at the end of the leave period. Thus, any applicable COBRA notices must be sent at that time.
If you intend to implement this type of policy, make sure the leave limits are exclusive of any statutorily protected leaves. For instance, if an employer has a five-month limit on leaves of absence, it must allow employees entitled to to use their entire leave time before the five-month period begins. Otherwise, it could appear that those who take guaranteed FMLA leave are actually penalized by a shorter leave policy under the employer’s policy.
For workers currently on an extended leave, the employer may simply announce its new policy and provide every employee (including those on leave) with proper notice. The new leave limitation should begin to run at the point it is announced, even for those already on leave.
Most private-sector employers in Texas are free to create this type of policy as a means of bringing administrative closure to an extended leave of absence and providing fair notice to employees.
For employees covered by a collective-bargaining agreement or an employment contract, this approach may not be appropriate. It is particularly important for employers that have such agreements in place to consult counsel before enacting any such policies.
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