One of the areas of law I am most asked about is unemployment compensation. The topic of unemployment is one of great mystery to employers large and small. This is likely due to the fact that decisions on these issues come from various sources, including Iowa Workforce Development, the Employment Appeal Board, and the District Court. When you have this many levels of decision making on these issues, some decisions may conflict leading to a gray area on many issues in this area. As a result employers are often left with numerous questions as to whether a particular employee qualifies for unemployment benefits.
Employers have a lot of options available to them when an employee files for unemployment benefits. Initially, Iowa Workforce will issue out a preliminary decision on whether the particular employee is entitled to benefits. These decisions are made without a lot of information and therefore the employer should consider appealing them if they lead to a contrary result. When these decisions are issued there are set appeal deadlines if the employer wishes to appeal. The employer has the option of appealing decisions multiple times, sending it to an Administrative Law Judge, Employment Appeal Board, and then ultimately the District Court. I always advise my clients to let me know as soon as the preliminary decisions are issued so that the strict appeal deadlines can be protected.
One of the questions I am frequently asked is whether an employee is entitled to unemployment benefits if they can longer work due to a non-work related injury and fail to return after their short-term disability expires.
Let me give you an example of when this fact pattern can come into play. An employee sustained a non-work related injury and notified the employer, requesting a leave of absence. The employee was placed on employer-paid short-term disability for the next 12 months due to this injury. Just as the 12 month period was getting ready to lapse, the employer sent a letter to the employee informing him that his leave was running out and that it needed a letter from his doctor releasing him back to work. The employee was unable to obtain a release to return to work and did not return to work. The employment ended and the employee filed for unemployment benefits.
But is this employee, who sustained a non-work related injury and failed to return after his leave expired actually entitled to unemployment benefits?
Iowa Code §96.5 provides that employees are disqualified from unemployment benefits if they:
(1) Voluntarily quit without good cause attributable to the employer;
(2) Are discharged for misconduct;
(3) Fail to accept work
Iowa Code §96.5 (2017)(emphasis added). This issue is not one of employee misconduct so employers often assume that these employees are entitled to unemployment compensation. However, under Iowa law this employment separation may be deemed to be a voluntary quit without good cause attributable to the employer.
Under the Iowa Code, if an employee leaves work voluntarily without good cause attributable to the employer they are disqualified for unemployment benefits. Iowa Code §96.5 (2017). There is an exception under this rule that an individual shall not be disqualified if:
d. The individual left employment because of illness, injury or pregnancy upon the advice of a licensed and practicing physician, and upon knowledge of the necessity for absence immediately notified the employer, or the employer consented to the absence, and after recovering from the illness, injury or pregnancy, when recovery was certified by a licensed and practicing physician, the individual returned to the employer and offered to perform services and the individual's regular work or comparable suitable work was not available, if so found by the department, provided the individual is otherwise eligible.
Iowa Code §96.5(1)(d)(2017). Therefore, this exception would allow employees to obtain unemployment benefits if they recovered from their injuries and had a doctor's note returning them to work, but the employer did not have suitable work available to them.
But what about a situation where the employee has not recovered when the short term disability runs out? The above exception does not apply, as that section states that it only applies if the employee has recovered from an illness or injury and this recovery has been certified by a physician. See Id.; see also Gilmore v. Employment Appeal Bd., 695 N.W.2d 44 (Iowa App. 2004). It is these situations that must be examined to see if they are voluntary quits without good cause.
871 Iowa Admin. Code 24.25(96) seems to define these situations in this fashion. This section defines voluntary quit without good cause attributable to the employer.
24.25(35) The claimant left because of illness or injury which was not caused or aggravated by the employment or pregnancy and failed to:
a. Obtain the advice of a licensed and practicing physician
b. Obtain certification of release for work from a licensed and practicing physician;
c. Return to the employer and offer services upon recovery and certification for work by a licensed and practicing physician; or
d. Fully recover so that the claimant could perform all the duties of the job.
871 Iowa Admin. Code 24.25 (96)(emphasis added). In our fact pattern above, the employee left work and failed to "obtain certification of release for work from a licensed and practicing physician", i.e. he failed to get a release back to work. He also failed to return to the employer and offer services upon recovery and certification for work by a licensed and practicing physician. Finally, the employee failed to fully recover so that he could perform all duties of the job. Therefore, under the plain language of this section, the employee voluntarily quit his employment without good cause attributable to his employment and therefore is not entitled to unemployment benefits.
We can also look at this another way: the employee's separation does not qualify as a voluntary quit with good cause attributable to the employer. Section 24.26(6) defines separations that are deemed to be voluntary quits with good cause. That section provides:
Separation because of illness, injury, or pregnancy:
a. Non-employment related separation: The claimant left because of illness, injury, or pregnancy upon the advice of a licensed and practicing physician. UPON RECOVERY, WHEN RECOVERY WAS CERTIFIED BY A LICENSED AND PRACTICING PHYSICIAN the Claimant returned and offered to perform services to the employer, but no suitable, comparable work was available. RECOVERY IS DEFINED BY THE ABILITY OF THE CLAIMANT TO PERFORM ALL OF THE DUTIES OF THE PREVIOUS EMPLOYMENT.
871 Iowa Admin. Code 24.26(6)(2017). Again, here we have no recovery, no ability to return to previous duties, and no certification by any doctor. Therefore, the employee does not meet the definition of voluntary quit with good cause and by elimination would be considered a voluntary quit without good cause.
The Iowa Appellate Courts reviewed a similar fact pattern in the case of Gilmore v. Employment Appeal Board, 695 N.W.2d 44 (Iowa App. 2004). In Gilmore, Matthew Gilmore was employed as an emergency medical technician for Fraser Transportation Services, a private ambulance service. Id. On December 14, 2002, Gilmore fractured his foot while off-duty. He notified Fraser of this injury. On December 16, 2002, he was given medical restrictions that he should have a non-driving job and may need to wear a splint or cast. Fraser informed Gilmore that it did not have any jobs available for his restrictions.
On December 22, 2002, Gilmore applied for unemployment benefits and the request was granted. Fraser appealed. At the hearing the Administrative Law Judge found that Gilmore was not able and available to work within the meaning of Iowa Code 96.4(3). "The ALJ determined Gilmore was on a medical leave of absence from the date of his injury until he was fully released to return to work". Id. This decision was affirmed by the Employment Appeal Board and taken up on judicial review.
The Court looked at the case and found that this situation was to be considered a voluntary quit without good cause attributable to the employer. The Court stated:
"Section 96.5(1) has been interpreted to provide that voluntary quitting is not attributable to an employer if it is caused by an illness of injury not connected to the employment". [citations omitted]. "Insofar as the Employment Security Law is not designed to provide health and disability insurance, only those employees who experience illness-induced separations that can be fairly attributed to the employer are properly eligible for unemployment benefits".
Id. The Court went on to hold:
"Section 96.5(1)(d) specifically requires that the employee has recovered from the illness or injury, and this recovery has been certified by a physician. The exception in section 96.5(1)(d) only applies when an employee is fully recovered and the employer has not held open the employee's position. [citations omitted].
In the present case, the evidence clearly shows Gilmore was not fully recovered from his injury until March 6, 2003. Gilmore is unable to show that he comes within the exception of section 96.5(1)(d). Therefore, because his injury was not connected to his employment, he is considered to have voluntarily quit without good cause attributable to the employer and is not entitled to unemployment benefits".
Therefore, if you have an employee that has failed to return to work after a non-work related injury and has provided you no documentation certifying that they can return to work, ask your company attorney whether they should be deemed to be a voluntary quit without good cause. There is good case law and statutory authority to argue these employees are not entitled to unemployment benefits.
Please remember that every fact pattern is different, and you should always obtain legal advice on your individual employee separations.