Chapter 16 Convergence of Employment Laws and the Workers' Compensation Act

• Library: The Law of Workers’ Compensation Insurance in South Carolina (SCBar) (2019 Ed.)

Chapter 16¹ Convergence of Employment Laws and the Workers' Compensation Act

I. Overview

Seasoned workers' compensation attorneys understand that the Act cannot be implemented in a void. Lawyers have a duty to advise their clients of their rights and responsibilities pursuant to related employment laws. Whether representing the claimant or the employer, a workplace injury triggers for the attorney the task to evaluate whether other employment issues may impact the administration of the workers' compensation claim. For instance, is the injured worker misclassified according to the federal Fair Labor Standards Act,² thus affecting her pay and her workers' compensation benefit? As another example, an employer ordinarily is not required to continue to employ an injured worker receiving workers' compensation benefits if that employee is unable to work and has exhausted all accrued or allowed leave. But, depending upon the size of the employer,³ is the claimant entitled to job protection during a 12-week leave of absence pursuant to the Family and Medical Leave Act,⁴ or to an extension of leave as a reasonable accommodation under the Americans with Disabilities Act?⁵ The facts of each case call for individual scrutiny to accurately determine the rights of both workers and employers within the requirements of overlapping statutes.

Clients have a right to expect their attorneys to identify related employment issues and advise them accordingly. Employers' attorneys can be proactive in mitigating potential damages, and claimants' attorneys cannot only protect their clients' jobs, but sometimes uncover other substantial claims.

There are numerous state and federal statutes and regulations affecting injured workers. Some are applicable only to private employers and some only to public employers. Certain laws apply based upon the number of employees, whether a government contract is involved, whether the employer receives federal funds, or whether the employer has placed specific language in its employee handbook or in written policies. While a single book chapter cannot effectively examine the entire body of employment law, this chapter will focus on several laws that often intersect with the administration of workers' compensation claims.

II. At-Will Employment Doctrine

South Carolina's employment law, like most states, is based on the common law at-will employment doctrine. The at-will concept means that an employer may discharge an employee, and an employee may leave employment, for a good reason, bad reason, or for no reason at all.⁶ Limited exceptions have chipped away at the doctrine over time, providing employees protection from discrimination based upon specific protected characteristics,⁷ retaliatory discharge, military service,⁸ and discharge in violation of public policy.⁹ South Carolina goes so far as to protect employees from discharge based upon, for example, tobacco use,¹⁰ political opinions,¹¹ and service on a jury.¹² Most of the exceptions relevant to workers' compensation are found in state and federal statutes granting employees protected absences from work due to medical or family situations.

III. Selected Statutes Affecting Leave

A. Family and Medical Leave Act

The Family and Medical Leave Act¹³ (FMLA), created to help employees care for their family members — including those in the military — without endangering their livelihoods, is one of the most complex employment benefit statutes for employers to implement. The FMLA allows eligible employees to take up to 12 weeks of leave to care for themselves or a relative, then be reinstated to the same or equivalent job.¹⁴ The statute imposes strict notice obligations.

The FMLA applies to private employers with 50 or more employees for a 20-week period during the current or preceding calendar year, and to all government employers, local educational agencies and schools, both public and private, without regard to the number of employees.¹⁵ To be eligible for FMLA leave, an employee must have been employed: (1) a total of at least 12 months over the prior seven years; (2) for at least 1250 hours during the previous 12-month period; and (3) at a worksite where 50 or more employees are employed within a 75-mile radius.¹⁶

The following six circumstances may trigger an employee's entitlement to FMLA leave¹⁷:

(1) Childbirth and care of the newborn;¹⁸
(2) Placement of a child with the employee for adoption or foster care;¹⁹
(3) Care for the employee's spouse, child, or parent with a "serious health condition";
(4) The employee's own "serious health condition" that makes it impossible for the employee to perform the functions of the job;²⁰
(5) A "qualifying exigency" caused by a spouse, child, or parent's call to covered active military duty; ²¹ or
(6) Care for a covered servicemember²² with a serious injury or illness who is the employee's spouse, child, parent or next of kin.²³

A "serious health condition" is an illness, injury, impairment, or mental or physical condition that requires either (1) inpatient care in a hospital, hospice or other medical facility or (2) continuing treatment by a health care provider.²⁴

The 12 workweeks of leave may be taken continuously or as "intermittent" leave, as necessitated by the medical condition.²⁵ The leave generally is unpaid, but may be paid leave when taken concurrently with any type of earned leave or benefit, such as accrued vacation or sick leave, short-term disability payments, or workers' compensation benefits.²⁶ Health insurance must be continued during the FMLA leave on the same terms and conditions as while not on leave.²⁷

When an employer receives notice from an employee of need for FMLA leave, or the employer learns that an employee has need for leave for an FMLA-qualifying reason, the employer is obligated to notify the employee within five business days of his or her general eligibility for the leave.²⁸ The eligibility notice refers to whether the employee meets the criteria for hours worked, length of employment and number of employees at the worksite.²⁹ Concurrently, the employer must provide a "Rights and Responsibilities'' notice.³⁰ The Rights and Responsibilities notice informs the employee, inter alia, that the employee may have the right to substitute paid leave for unpaid leave and the conditions under which it is provided.³¹

While not every on-the-job injury results in a "serious health condition" as defined by the FMLA, covered employers must determine, once they become aware of an injury, whether that event triggers a duty to give the employee the Notice of Eligibility and Rights and Responsibilities notice. Violations of these and other FMLA-notice provisions can be considered unlawful interference with the employee's use of FMLA leave.³² Employers are prohibited from discriminating against employees or interfering with, restraining, denying the exercise of, or attempting to deny the exercise of, any right under the FMLA, and may not retaliate against any individual for opposing practices made illegal by the Act.³³

If an employer wishes to obtain a fitness-for-duty certification when an employee returns from FMLA leave, the fitness-for-duty requirement must be included in the Designation Notice given to the employee when sufficient information is received to determine the leave qualifies for FMLA protection.³⁴ The fitness-for-duty certification should address the employee's ability to perform the essential functions of the job, which must be listed with the Designation Notice.³⁵

FMLA obligations of the employer end with the employment relationship. For example, if the employee states an intention not to return to work, the position is eliminated in a non-discriminatory reduction-in-force, or the employee fraudulently obtains the FMLA leave by exaggerating an illness or injury, then the employee has no further rights under FMLA.³⁶

If the employee is unable to perform an essential function of the position, the employee retains no right under the FMLA to job restoration upon the expiration of the 12 weeks' leave.³⁷ However, an employer still may have responsibilities under the Americans with Disabilities Act to extend reasonable accommodations to the employee to assist in performance of essential job duties. Employers also must comply with COBRA upon termination of FMLA health maintenance benefits.

Civil actions for enforcement of the FMLA can be brought in state or federal court, or through enforcement by the U.S. Department of Labor.³⁸

B. Americans with Disabilities Act

Some employers mistakenly require employees to be cleared for "full duty" before allowing them to return to work following FMLA leave. In some situations, including workers' compensation cases, employers may have an obligation under the Americans with Disabilities Act (ADA) to grant additional unpaid leave as a reasonable accommodation.

Title I of the ADA, as amended by the ADA Amendments Act of2008 (ADAAA),³⁹ prohibits employers from discriminating against qualified individuals with disabilities in all aspects of employment, including hiring, firing, advancement, compensation, training and other terms and conditions of employment.⁴⁰ The Act applies to employers with 15 or more employees for at least 20 workweeks in the current or preceding calendar year, including state and local governments.⁴¹ A "qualified individual," for purposes of the Act, means an individual who possesses the requisite skill, experience, education, and other job-related requirements for the position and who can perform the essential functions of the position, with or without reasonable accommodation.⁴²

Under the ADA, an employer has an affirmative obligation to provide a reasonable accommodation to the known disability of an otherwise qualified individual (employee or applicant), unless doing so would impose an undue hardship on the operation of the employer's business.⁴³ A reasonable accommodation is any change in the application process, work environment...