EEOC Data and Court Rulings Update Employer ADA Leave Obligations

The intersection of Paid Time Off (PTO) and the Americans with Disabilities Act (ADA) remains one of the most complex areas of compliance for HR professionals. Recent enforcement data and court rulings have highlighted the financial risks of failing to navigate these requirements correctly; the U.S. Equal Employment Opportunity Commission (EEOC) reported recovering more than $165 million in monetary benefits from ADA-related charges in fiscal year 2024 alone.

As employers manage recovery periods and accommodation requests, three key questions help define the boundaries between standard leave policies and federal mandates.

1. Does the ADA require paid leave beyond a standard PTO policy?

While the ADA requires employers to provide “reasonable accommodations,” it does not generally require that leave be paid if the employer does not provide paid leave to similarly situated employees. According to U.S. Equal Employment Opportunity Commission guidance, an employer must provide the same access to paid leave for a disabled worker as it does for those without disabilities. However, once an employee’s accrued PTO is exhausted, the ADA mandate typically shifts toward providing additional unpaid leave as a reasonable accommodation, unless doing so creates an undue hardship.

A frequent point of friction occurs when an employee wishes to take unpaid leave for a medical condition while “saving” their accrued PTO for a later vacation.

Employers must perform individualized assessments before applying automatic attendance penalties.

2. Can “no-fault” attendance policies lead to ADA violations?

Many organizations utilize “no-fault” attendance policies, which apply automatic consequences or termination after a specific number of absences, regardless of the reason. The EEOC has consistently maintained that these policies can violate the ADA if they are applied mechanically to individuals with disabilities.

To remain compliant, employers must perform an individualized assessment before terminating an employee who has reached the limit of a no-fault policy. If the absences were related to a disability, the employer may be required to grant an exception to the policy—such as additional leave days—as a reasonable accommodation. Automatic termination without engaging in the “interactive process” to explore these exceptions is a primary trigger for federal investigations.

3. What happens if an employee cannot return to their original role?

When an employee’s leave period ends but they remain unable to perform the essential functions of their original position, the employer’s obligations do not necessarily end. The 4th U.S. Circuit Court of Appeals recently addressed this in Dieng v. Orkin LLC, emphasizing that employers must engage in the interactive process regarding reassignment.

If a return to the original role is impossible, even with accommodations, the employer must look for a vacant, equivalent position for which the employee is qualified. Only if no such position exists is termination typically considered legally sound. Furthermore, while the ADA requires providing leave as an accommodation, it does not require employers to grant “indefinite” leave. If a medical provider cannot provide an estimated return date or a timeframe for recovery, the leave may eventually be deemed an undue hardship.

To mitigate risk, HR departments should review their fiscal year performance and compliance strategies. The EEOC’s annual performance reports suggest that clear documentation of the interactive process remains the strongest defense against litigation in these scenarios.

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