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The ADA: how it affects businesses and their employees.

The Americans With Disabilities Act of 1990 (ADA) is perhaps the most significant recent piece of civil rights legislation passed by Congress. The act makes it illegal to discriminate against individuals with disabilities in a number of different areas.

The ADA's impact on employment will be among the most important concerns for CPAs. The ADA prohibits discrimination against disabled employees or applicants who otherwise are qualified to do the essential elements of a job with or without reasonable accommodation. And it provides for administrative and judicial enforcement of these rights. The protections provided by its terms and definitions are innovative and far-reaching. Employers are forbidden from retaliating against those who exercise their rights under the act.


The act defines a disability as a "physical or mental impairment that substantially limits one or more of a person's major life activities"; or being regarded as having such a disability, or even being associated with a person who has such a disability. Disabilities include sensory impairments (such as deafness or blindness), mobility limitations (such as those restricted to wheelchairs), and hidden impairments or conditions (such as epilepsy, diabetes, cancer, heart disease and learning disabilities. It also includes recovering alcoholics and drug abusers and those with AIDS-related conditions). The ADA does not protect current illegal drug users, but does cover drug-free people who have successfully completed or are in supervised drug rehabilitation programs.

The act doesn't prohibit discrimination against people with conditions that would be characterized as "sexual behavioral disorders." In addition, conditions such as compulsive gambling, kleptomania or pyromania are excluded. (Some states do have broader statutes, however.)


The ADA requires employers to make reasonable accommodations for disabled workers who otherwise are qualified, unless the accommodations would impose an undue hardship on the business. Undue hardship generally is interpreted as an action that requires significant difficulty or expense in relation to the size of the firm, its resources and the nature of its operation. However, the employer must consider whether there are alternative accommodations that would not impose such hardship.

To offer an illustration adapted from Equal Employment Opportunity Commission (EEOC) guidelines, a small CPA firm may assert that it would be an undue hardship to provide an interpreter so that a hearing-impaired accountant could attend weekly briefing sessions. On the other hand, in the case of a small office of a larger CPA firm, such an accommodation might not be judged an undue hardship. Because reasonable accommodation and undue hardship are ill defined, it may be quite some time before the limits are clear.

The ADA also prohibits discrimination against disabled individuals by facilities open to the public in providing goods, services and so forth. This applies to lodgings, restaurants, public gatherings, auditoriums, retail stores and CPA firms, just to name a few. (For more information on how this provision affects CPAs firms, see "The ADA: How It Affects Firms and Their Clients," by James G. Frierson, on page 79.)

Businesses with 25 or more employees must comply with the employment provisions beginning July 26, 1992. Those with 15 to 24 employees must do so by July 26, 1994. (The rules for businesses with fewer than 15 employees are complex, so it's best to consult an attorney about their implications.) An employer generally is defined as any public or private business with 15 or more employees, with some exceptions, such as private clubs.


The ADA broadly applies to employment activities such as job application procedures, hiring, advancement, termination, on-the-job training, salary practices and nearly all other conditions and privileges of employment.

For example, an employer cannot limit or segregate job applicants or employees in a way that would adversely affect their opportunities because of their disabilities. Nor can employers engage in arrangements (for example, with employment agencies) that might screen out disabled applicants.

Employers also must determine whether employment tests used to select job applicants adequately reflect the skills and aptitudes needed for the job or if results are adversely affected by the candidate's physical or mental impairment. A visually impaired applicant who has trouble reading, for example, may be unable to complete a written aptitude test. The law suggests employers make a reasonable accommodation, such as providing spoken instructions if the impairment is visual or written instructions should the applicant have a hearing disability.

In addition, medical examinations or even questions about a job applicant's disability on a preemployment basis are prohibited. An employer, however, may ask if a candidate is capable of performing the position's basic functions. Testing for illegal drug use is not considered a medical examination under ADA, so drug screening is allowed. Current use of illegal drugs is not a disability and an employer can prohibit illegal drug and alcohol use in the workplace. (State statutes may vary, however.)


Employers should concentrate on training those involved in the selection and interview process. Specifically, they should identify questions that may and may not be asked of disabled applicants. Inquiries about a candidate's health, past illnesses or psychological history no longer are permitted. And, as with race and sex, job interviewers should not make notations about an applicant's physical or mental disabilities on the application form or interview log.

It's important, too, to review job descriptions to identify essential and nonessential tasks for each position. A number of ADA provisions are conditioned on these definitions. To cite the act: "Consideration shall be given to the employer's judgment as to what functions of a job are essential, and if an employer has prepared a written description . . . this shall be considered evidence of the essential functions of the job."

In other words, according to Peter Panken, president of the Federation of the Handicapped and chairman of the labor and employment law department of Parker Chapin Flatteau & Klimpl in New York, employers are going to be bound by their written job descriptions. It therefore becomes very important to ensure all the essential tasks are properly listed. Employers not equipped to perform and maintain this kind of job requirement analysis may be better off without job descriptions.

Other ways to comply with the ADA include

* Segregate medical records from employee personnel files.

* Review all employment applications (or preemployment screening) and eliminate questions about physical or mental disabilities.

* Review work rules in light of ADA.

* Review plans for new construction and office alterations to ensure accessibility to the disabled. Consider not only those in wheelchairs but also those who might need visual and audible alarms.

* Post a notice on ADA compliance. Employers are required to do this. Notices similar to those on equal employment opportunity can be obtained from the EEOC.

To defend against a charge of unlawful discrimination under the ADA, an employer will have to be able to demonstrate that job standards, tests or selection criteria were job related and consistent with business need. It's also necessary to show reasonable accommodation was not possible without undue hardship.


Reasonable accommodation applies to three areas of employment: the application (or hiring) process; the essential functions of the work to be performed; and the benefits and privileges of employment. The ADA provides a list of actions employers should consider as reasonable accommodation. While specific facts determine what is appropriate in each situation, the act offers several examples:

Make facilities accessible. Under the ADA, an employer would be expected to install wheelchair ramps, widen office aisles or raise desks on blocks of wood for a person who is wheelchair-bound.

Restructure the job. This may be required if a person with a disability can perform a job's essential duties but not other nonessential functions. Nonessential duties could be assigned to another employee. An example is a department in which three employees spend 90% of their time adding figures and completing spreadsheets and 10% of their time answering the telephone. If a hearing-disabled person applies for one of the positions, he or she might take on more of the numbers work while the other two employees increase their telephone time.

Modify work schedules. Employers may be required to allow disabled employees to commute during off-peak hours because of the difficulties they might have using mass transportation.

Acquire equipment. Some situations may call for special equipment, such as Braille devices or telephone headset amplifiers, to allow a disabled employee to perform his or her job.

Accommodations need not be complicated or costly. According to the President's Committee on Employment of People with Disabilities, 69% of accommodations suggested by the Job Accommodation Network cost less than $500 and more than half of them cost less than $50. Newsweek reported that about 80% of modifications for disabled workers using computers cost less than $300.


Medical benefits must be offered to all employees without regard to their disabilities. An employee with a disability cannot be denied insurance or subjected to different insurance terms or conditions based on the disability alone (if the disability itself does not pose increased risks).

In other words, sound actuarial principles must be involved before an employer considers treating a disabled employee differently in terms of health benefits. Needless to say, this can be a complicated issue. Employers' decisions should be reviewed by professionals.


The EEOC or designated state human rights agencies are the act's primary enforcers. Remedies for violations can include hiring, back pay, court-ordered reinstatement or other forms of equitable relief. And, with enactment of the Civil Rights Act of 1991, victims of employment discrimination because of a disability can get a jury trial and up to $300,000 in compensatory damages (successful plaintiffs also can be awarded legal fees).

The ADA is a complex piece of legislation that has major implications for nearly 4 million businesses. It is impossible to cover all of its details in one article. CPAs should consult their attorneys about what implications the act holds for them.


The Internal Revenue Service provides some assistance to help employers make accommodations and comply with the ADA. For example, in 1990, Congress set up a special tax credit to help smaller businesses make accommodations required by the ADA (Internal Revenue Code section 44). IRC Section 190 provides a tax deduction for the removal of architectural and transportation barriers. And tax credits also are available under the Targeted Jobs Tax Credit Program for employers that hire individuals with disabilities who have been referred by state or local vocational agencies, etc.


In passing the ADA, Congress gave high profile to individuals with disabilities. It recognized society's tendency to isolate and segregate disabled individuals and chose to provide them with legal recourse. The United States spends millions of dollars each year in subsidies to people with disabilities, many of whom remain unemployed. Statistics suggest that over 80% of them would rather be adequately compensated as active members of the workforce.

Disabled Americans represent a vast source of talent that will become more significant and important in the labor market under the ADA. While the new legislation may require an adjustment period from the nation's employers and those who provide services to the general public, disabled Americans represent a viable and vital reservoir of productivity.


* THE AMERICANS WITH DISABILITIES Act of 1990 (ADA) is perhaps the most significant recent piece of civil rights legislation passed by Congress. It prohibits discrimination against individuals with disabilities in employment, public accommodation, public service, transportation and telecommunications.

* THE ADA PROHIBITS employment discrimination against those with disabilities who are qualified for a job with or without reasonable accommodation. Employers needn't make accommodations, however, if doing so imposes an undue hardship.

* TO PROVIDE accommodations to the disabled, employers may be required to make their facilities accessible, restructure positions, modify work schedules or acquire special equipment. These accommodations need not be complicated or costly to the employer. Employers also must offer medical benefits to all employees without regard to their disabilities.

* EMPLOYERS CANNOT SEGREGATE job applicants or employees in a way that would adversely affect their opportunities because of their disabilities. Both employment tests and policies on medical exams should be reviewed to ensure they don't serve to discriminate against otherwise qualified disabled people.

* BUSINESSES WITH 25 or more employees must comply with the employment provisions beginning July 26, 1992. Those with 15 to 24 employees must do so by July 26, 1994.
COPYRIGHT 1992 American Institute of CPA's
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Title Annotation:Americans with Disabilities Act of 1990
Author:Lewison, John
Publication:Journal of Accountancy
Date:May 1, 1992
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