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Americans with Disabilities Act vs. Workers' Compensation


Balancing Act: Making Return-to-Work Decisions



Irvine, California

The employer faced with making the decision to offer modified or alternate  work for an injured worker must balance many competing factors. Among the financial and organizational issues, the employer must also consider the incompatible legal requirements of workers' compensation and the Americans with Disabilities Act (ADA).

The purpose of this article is to provide a simple analysis of the similarities and conflicts between these two legal systems.


What Date Determines Benefits Available to Injured Workers?

Whereas in workers' compensation the key issue in determining an injured worker's entitlement to benefits is the date of injury, the most important factor in the Americans with Disabilities Act is the date of the discriminatory act. Therefore, an employee injured in 1989 may still be eligible for protection under the Americans with Disabilities Act if the employer's adverse action occurred in 1995. This is important because an action for discrimination may lie if the employer refuses to accept an application or interview an ex-employee who had once received worker's compensation benefits and has a record of impairment.

Leonard J. Silberman, is a partner with Silberman and Cohn. He has written numerous articles and lectured state wide on the relationship between workers' compensation and employment law. In addition, Mr. Silberman has been an author of Rehabilitation: the California System since 1978.

Susan Wulz Silberman, Ph.D. is the owner of The Rehabilitation Professionals, consisting of Professional Rehab, a full-service vocational rehabilitation company dealing with workers' compensation and ADA evaluations, and Rehab 90, which specializes in job analyses for workers' compensation and ADA.


Is the Employee Disabled?

Workers' compensation applies when the injury exceeds first aid. Benefits are given whether the injury is temporary or permanent and the level of benefits varies depending upon the severity of the injury.

The Americans with Disabilities Act applies only if the injury causes an impairment that substantially limits a major life activity. Although an impairment need not be permanent for ADA, its severity is judged on the impact it has on the life of the individual. Therefore, ADA also provides protection when the injured worker currently has no actual impairment but has a history of such an impairment or the employer responds to the individual as though there were such an impairment. The level of protection does not vary depending upon the severity of the disability.


Can the Employer Terminate an Employee who is QIW?

When an injured worker is determined to be medically eligible for services because he or she is unable to perform the job held at the time of injury, the workers' compensation system allows the employer to decide whether vocational rehabilitation is appropriate or whether to offer modified or alternate work. Under existing workers' compensation law, the employer can terminate an injured worker who is permanent and stationary and unable to perform the duties at the time of injury.

Under the ADA, an employer cannot make any adverse action due to a disability unless the danger of further injury to the employee or other employees rises to the level of direct threat. Direct threat requires that the potential harm be substantial and that it is imminent, rather than speculative. Even where its established that there is an imminent danger of substantial harm, an employer must consider reasonable accommodations to eliminate the harm.

Furthermore, an employee who is medically eligible for vocational rehabilitation services under workers' compensation may be unable to perform tasks that are not essential to the job. An employer must not consider non-essential (marginal) tasks in determining an employee's compensation or employability. If an injured worker is qualified for rehabilitation because of marginal tasks, the employer cannot make any changes, including offering reasonable accommodations.


Does the Employer Rave to Offer Modified or Alternate Work?

Workers’ compensation requires that the employer send a notice to the injured worker about the availability of modified or alternate work. It provides incentives for the employer to return the individual to employment. However, the decision is entirely at the option of the employer; there is no affirmative duty to offer modified or alternate work.

In contrast, the crux of the ADA is the requirement that the employer consider reasonable accommodations (modified or alternate work) when an employee with a known disability is unable to perform the job. While an employer need not offer modified work if it would be successful in allowing the injured worker to perform the essential functions of the job or in the rare cases in which the employer can show undue hardship, the employer absolutely must evaluate the employee's ability to benefit from reasonable accommodations. This duty is not discretionary.

The responsibility to evaluate the availability of a reasonable accommodation to allow the injured worker to return to the same job also places a duty on the employer to evaluate the injured worker's qualifications for vacant positions. An employer must consider vacant positions for a current employee who, because of an impairment, is unable to perform the essential functions of the position currently held.

In ADA, the employer has the burden of proof to show that there are no reasonable accommodations that would allow the injured worker to perform the essential functions of the job. In workers' compensation, the employer's decision to offer modified or alternate work cannot be challenged directly by the employee. While there is a process for challenging the appropriateness of the offer within the vocational rehabilitation system, the employee can only assert Labor Code 132a to order reinstatement. Under Labor Code 132a, the employee has the burden to show that there was discrimination.

Under workers' compensation, the employer has no duty to consider modified or alternate work. Under ADA, such an evaluation is mandatory.


Does the Employee Have to Perform the Essential Functions of the New position?

In Labor Code 4644(a)(5), the workers' compensation system refers to essential functions for the first time. It is not defined. The statute indicates that an employer’s liability for further vocational rehabilitation services will not be terminated if the employee is unable to perform the essential functions of the job. Such an individual may be eligible for vocational rehabilitation services.

In contrast, the ADA provides no protection for an injured worker who is unable to perform the essential functions of the job.

Offering the injured worker a position where some essential functions have been removed does not violate ADA if the employee had the same advancement potential as in the past. It is one method of modifying a job. However, if the employer refuses to offer a position in which the injured worker can perform the essential functions, there may be a violation of ADA.


Does the Position Have to be a "Regular Position?"

Labor Code 4644(a)(6) indicates that the injured worker must be placed in a "regular position," which is defined as "A position arising from the ongoing business needs of the employer which consists of defined activities that can be reasonable viewed as required or prudent in view of the company's business objectives and is expected to last at least 12 months" [C.C.R. 1O122(k)]. This is quite different from the requirement for suitable gainful employment which must be available outside the labor market. It allows an employer to create a position for the employee which may be unique to the company. It also emphasizes, as does Labor Code 4644 repeatedly, that the employer's obligation is for 12 months.

The ADA prohibits an employer from segregating or classifying disabled employees into situations in which they do not have the advancement opportunities available to nondisabled employees. To the extent that an employer creates a "holding position" to retain an injured worker to meet the requirements of the workers' compensation system, this could cause liability under ADA. The ADA stresses the need for the disabled individual to be competent at the job: to perform the essential functions of the job, to be tracked for success equally with nondisabled employees; to be allowed to participate in all activities. The alternate work described in the Labor Code focuses only on the duration of the employment and current work status.


How Long Is the Employee Protected?

The ADA continues to protect the individual throughout employment. The fact that an employer has offered one reasonable accommodation does not foreclose the employee's right to another reasonable accommodation.

Labor Code 4644, while stating that the job must last "at least" 12 months also allows a presumption of reopening only if the job lasts less than" 12 months. It allows for termination of an employer's liability for further services at 12 months and states that Labor Code 132a may protect the injured worker beyond that period. An employer's liability for further services is terminated at 12 months and the burden shifts to the employee to prove that the termination was not for cause beyond that period.

An employer terminating an injured worker after 12 months may be at high risk of liability under ADA and Labor Code 132a. If the reason for terminating the employee is because the job is not financially feasible for the company, then it is not a "regular position" and the intent must always have been to release the employee upon meeting the statutory threshold of Labor Code 4644. If the reason for terminating the employee is because of production problems, the employer must analyze the employee's ability to benefit from a reasonable accommodation.


Can the Employer Change the Employee's Wages or Level of Compensation?

In workers’ compensation, when an employer offers an employee an alternate position under Labor Code 4644(a)(6), it must be within 85% of the prior level of compensation.

The ADA prohibits any discrimination against a disabled employee with respect to compensation. If the employer creates a position for the injured worker, the pay for that position must be equivalent to the pay that would be received by a nondisabled employee.

Labor Code 4644(a)(5), providing for modified jobs, has no requirements regarding wages. If the employer elects to modify a job, the pay must not change. An injured worker cannot be penalized for the need to provide a reasonable accommodation.

On the other hand, if an employee is moved to a lower paying position and other nondisabled employees are receiving lower wages for performing that job, the employer is not violating ADA by lowering the employee's compensation level.


Does the Job Have to Be Within a Reasonable Commuting Distance?

The Labor Code indicates that the alternate position must be within a reasonable commuting distance from the employee's residence at the time of injury. If an employee has changed residences and a position is open that is closer to that location, the employer must consider the employee for available positions in the second site. Similarly, if the employee is able to commute further, the ADA would not impose any restrictions on the employer's actions with respect to location.


Is Compliance with Workers’ Compensation a Defense to an ADA Claim?

The Americans with Disabilities Act provides the "floor level" protection for disabled individuals in the United states. State laws can provide more for the individual, but not less. Compliance with state laws does not protect an employer from an action that violates a federal law.


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