Does long or short-term disability insurance offer job protection? No.

Can my boss terminate my employment during my time out on disability? What laws might apply to my situation and safeguard my employment while I recover? Can I collect unemployment benefits after losing my job?

You came to the right place if you need answers to these vexing questions.

You will need to consider at least three separate factors and then combine them together as if you were solving a jigsaw puzzle.

  1. Were you fired, laid off, or did you quit?
  2. Will your disability outlast legal time limits?
  3. Do you meet the qualifications for the legal rights?

Termination of Employment While on Disability

Can your employer terminate your job while you are out on long or short-term disability? Disability insurance does not provide job protections. The coverage works another way. It replaces a portion of income for a predefined period during the time you are unable to work.

Therefore, you have to look at how federal and state laws apply if your boss fires you, versus a layoff, versus quitting. In addition, you must compare the length of your disability to how long your legal protections last – if you even qualify.


Your manager might be able to fire you while out on disability. All of the legal job protections outlined below have qualifying criteria (employer size, hours worked, etc.), which you may meet or not.

In addition, these laws work differently based on the length of time you are out of work.

However, the ADA may enable you to request extended leave as a reasonable accommodation.

Lay Offs

Your employer can lay you off during any period of disability (short or long-term). A layoff is the reduction of a company’s workforce in response to a business strategy or economic condition. It applies to all workers regardless of status.

Many of the possible legal job protections outlined below do not apply during a reduction of force. For example, you are not exempt from a layoff that is unrelated to FMLA.

Not Returning

Not returning to work after short-term disability should not affect your claim payments should you decide to quit. Since job loss is a common side effect, most policies simply require that you remain under the care of a doctor until you recover physically.

However, resigning from your job without returning first might affect two related programs.

  1. You could have to repay all health insurance premiums funded by your company per FMLA requirements
  2. You could lose access to future unemployment benefits if work in a state with strict good cause reason rules

Women not returning to work after maternity leave should be extra careful about the possible impact on health benefits. You may need the coverage for your newborn baby in addition to yourself.


You may be able to collect unemployment benefits if terminated while out on disability – after you recover. You will not be able to collect while you remain unable to perform your job duties. Unemployment compensation laws have three universal rules that apply in all 50 states.

  1. Physically able to work
  2. Available for duty
  3. Actively interviewing

People out on short-term disability often recover sooner and might be eligible for unemployment benefits at that point. A handful of states have laws that classify an employee’s own serious health condition as a good cause reason to end employment.

People out on long-term disability often have permanent medical conditions and may never recover. In this case, collecting unemployment is not an option because you remain unable to work.

Disability Return to Work Laws

Federal and state-based return-to-work laws determine whether your employer can terminate your job during or after your short-term disability. However, unlike insurance policies, they do not replace income – except for workers compensation. They protect your job during a leave of absence.


The Family Medical Leave Act (FMLA) is a federal temporary disability return-to-work law that provides up to 12 weeks of unpaid job-protected leave for eligible employees working for covered employers. You must meet both criteria in order to qualify.

  • Covered Employers
    • Employ 50 or more employees for at least 20 workweeks
    • One or more worksites within 75 miles
  • Eligible Employees
    • Worked for that entity for at least 12 months
    • Worked for at least 1,250 hours over the 12 months
    • Works at a location with 50 or more employees within 75 miles

Therefore, your employer can terminate your job during disability if any of these three reasons apply to your situation.

  1. Not a covered employer
    1. Small businesses
    2. Dental and doctor offices
    3. Private schools
  2. Not an eligible employee
  3. Exceed the 12 weeks of leave

Employer Contact

The FMLA does not contain specific language regarding whether your employer can contact you while on disability or caretaker leave. However, other components can expose bosses who step over communication boundaries.[1]

  • Wage and hour lawsuits
  • Interference claims
  • Retaliation claims

Returning to Work

The FMLA also contains secondary return-to-work language addressing whether your employer can fire you after short-term disability or caretaker leave. Companies cannot retaliate against workers exercising their legal rights.

Your primary legal protections expire after your short-term disability or you exhaust your twelve weeks of leave. Therefore, you may need to hire an attorney to fight a secondary retaliation claim. It is less clear-cut.

State Regulations

Several states have separate short-term disability return-to-work laws. These additional regulations either extend legal job protections to cover either more people and/or prolong the length of unpaid time off.

These state-specific regulations may make it more difficult to terminate an employee while out on disability or medical leave of absence. These states have FMLA-extending regulations on the books as of early 2019.

  • California
  • Connecticut
  • Maine
  • Minnesota
  • Oregon
  • Tennessee
  • Vermont
  • Washington


The Americans with Disabilities Act (ADA) is a federal law with a return to work provisions. The regulation prohibits discrimination based on disability in employment. The ADA requires that covered employers (15 or more employees) provide reasonable accommodations to applicants and employees with disabilities.

A reasonable accommodation can include making modifications to existing leave policies. An employer must consider providing unpaid leave as a reasonable accommodation so long as it does not create an undue hardship for the company.[2]

Keep in mind that these rules apply only if you meet the ADA disability definition.

  1. Physical or mental impairment that substantially limits one or more major life activities
  2. Record of such an impairment
  3. Being regarded as having such an impairment

Workers Compensation

Workers compensation laws vary by state and sometimes include a return to work provision. If your state regulation includes this benefit, in exchange, you may also lose the right to sue your employer. Research your local board for the rules in your state.[3]

The primary objective of workers compensation is wage replacement, medical care, and rehabilitation – not job protection. Therefore, it is possible for a boss to terminate your employment while out on medical leave caused by an occupational accident or sickness.


The Uniformed Services Employment and Reemployment Rights Act (USERRA) protects civilian job rights and benefits for veterans and members of reserve components. USERRA requires employers to make reasonable efforts to accommodate disabled veterans.

Service member recovering from injuries received during service or training may have up to two years to return to their jobs or apply for reemployment – counting from their last day of military service.[4]

Footnoted Sources:

[1] FMLA Contact

[2] ADA

[3] Workers Compensation