Employers Beware: An Employer’s Obligation to Engage in the Interactive Process Applies to Workers’

08.15.2016

An employer is not excused from its obligations to engage in the interactive process when a workplace injury qualifies as a disability under the Fair Employment and Housing Act ("FEHA") and/or the Americans with Disabilities Act ("ADA"). When the employer receives notice that an employee experienced a workplace injury, the employer should determine if the employee is disabled within the meaning of the ADA and/or the FEHA. If the employee is disabled within the meaning of the ADA and/or FEHA, then the employer should engage in the interactive process to determine whether there are any reasonable accommodations that will assist the employee with performing the essential functions of the position.

Workers’ compensation laws are different in purpose and scope from the ADA and the FEHA. Workers’ compensation laws may utilize different standards for evaluating whether an individual has a "disability" or is capable of working. Further, under workers’ compensation laws, the process for determining whether an employee may continue to work or return to work differs from the employer’s obligations under the ADA and the FEHA to engage in the interactive process.

Under the FEHA and ADA, an employer must initiate the interactive process once the employer knows that an employee has a physical disability, mental disability, or medical condition and either the employee requests a reasonable accommodation or the employer becomes aware of the need for an accommodation. (2 Cal. Code Regs. §11069(b).) The employer must engage in a timely, good faith, interactive process with the employee to determine an effective reasonable accommodation. (Gov. Code §12940(n).) An employer has an obligation to reasonably accommodate an employee’s known physical or mental disability unless undue hardship will result. (Gov. Code §12940(m); 42 U.S.C. §12112(b)(5)(A).) When engaging in the interactive process, direct communications between the employer and employee are preferred, rather than communicating through a third party. (2 Cal. Code Regs. §11069(d).)

When the employer receives notice from the workers’ compensation insurance carrier that an employee has permanent or temporary work restrictions, it is the employer’s obligation to engage in the interactive process directly with the employee. Although the employee’s permanent or temporary work restrictions may provide relevant evidence regarding an employee’s ability to perform the essential functions of the position, it is the employer’s obligation to make this determination after engaging in the interactive process. To satisfy the employer’s obligations to engage in the interactive process under the ADA and/or FEHA, the employer should not rely on communications with the workers’ compensation carrier, but instead should contact the employee directly to determine whether the employee needs a reasonable accommodation. Failing to communicate directly with an employee regarding his or her work restrictions arising from a workplace injury that qualifies as a disability under the ADA and/or FEHA may give rise to a claim for failure to engage in the interactive process.

Often times, an employer’s workers’ compensation insurance carrier or its third party claims administrator will receive notice from the employee’s physician that the employee can perform regular, modified, or alternative work. The insurance carrier will contact the employer to discuss any work restrictions outlined by the physician in an effort to determine if the employer can accommodate the employee. Under the laws governing workers’ compensation, the employer is required to provide the employee with a written offer of regular, modified, or alternative work on the approved Division of Workers’ Compensation form within 60 days if the employer intends to offer regular, modified, or alternative work. (Lab. Code §§4658(d), 4658.7(b).)

The benefit of offering regular, modified, or alternative work is that the exposure for workers’ compensation benefits can be reduced in some situations; therefore, the workers’ compensation insurance carrier or third party claims administrator will want the employer to offer the regular, modified, or alternative work. While an employer may benefit by offering regular, modified, or alternative work to limit workers’ compensation benefits that are paid to the employee, under the FEHA and ADA, creating modified or alternative positions may not be reasonable accommodations because under the FEHA or the ADA there is no obligation to create an alternative position or to eliminate the essential functions of a position. Further, creating an alternative position or eliminating essential functions may open the door for an employee to later claim that the employer can provide the modified or alternative work on a permanent basis. It is therefore important for employers to consider the FEHA and ADA in conjunction with workers’ compensation laws when evaluating possible modifications to the employee’s job duties.

If regular, modified, or alternative work is available, the carrier or claims administrator will usually prepare the written offer and provide it to the employee. If regular, modified, or alternative work is not available, the employer may advise his or her workers’ compensation insurance carrier of this, and the employee may receive the increased permanent disability benefits.

Again, this discussion between the employer and the insurance company does not relieve the employer from its obligations under the FEHA and the ADA to initiate the interactive process directly with the employee. Thus, employers cannot rely on their communications with the workers’ compensation carrier regarding an employee’s need for accommodation to fulfill the employer’s obligations under the ADA and the FEHA.

For more information concerning these requirements, please contact one of the authors or attorneys in the Private Labor and Employment Group or visit our website at www.aalrr.com.