The U.S. Equal Employment Opportunity Commission (EEOC) recently issued a guidance to employers regarding an employer’s obligation under the Americans with Disabilities Act (ADA) to provide unpaid leave or extend a paid leave on an unpaid basis beyond its original term as a reasonable accommodation under the ADA, provided no undue hardship would result for the employer.

The EEOC clearly views providing unpaid leave as an accommodation to be a significant issue that may require employers to change their usual practices when needed.  Specifically, the EEOC advises that if an employee’s condition constitutes a disability under the ADA, an employer’s usual policy of not providing leave, the employee’s ineligibility for leave on the basis of his or her employment status, length or employment or otherwise, or the exhaustion of all available leave, cannot justify a denial of providing unpaid leave, if the leave does not result in undue hardship for the employer.

The EEOC guidance provides that, in the event that all applicable leaves provided by the employer are inapplicable to an employee’s situation, the employer should engage in an interactive process with the employee so that the employer can determine whether it can provide additional leave as a reasonable accommodation without causing undue hardship.  This process should center on the reasons the employee needs the leave, if the leave will be a block of time or on an intermittent basis, and when the need for the leave is expected to conclude.

The EEOC warns that maximum leave policies and policies requiring that employees be 100% healed or able to work without restriction before returning to work may conflict with the ADA’s reasonable accommodation requirements to provide leave or accommodations on return to work such as reassignment for an employee with a condition constituting a disability, unless the employer can show undue hardship.

The guidance suggests employers communicate with employees toward the end of a scheduled leave regarding the possibility of extending the leave if necessary.  Instead of using a form letter informing the employee of the expected return date and possible termination for failure to return, employers should consider informing employees that if they need additional unpaid leave, they should request it as soon as possible so the employer can determine if they can grant an extension without experiencing undue hardship.

The author would like to gratefully acknowledge the assistance of Joanne Warriner.

This alert is intended to note current legal trends in commercial lending and risk management issues. No alert should be construed as representing advice on specific, individual legal matters, but rather as an overview of the subject discussed. Your questions and comments are always welcome. Please do not hesitate to contact me at kscott@ecjlaw.com  to further discuss this alert or to answer any questions.