We have an employee that has been out on short term disability for 5 months, her return has been postponed due to her doctor's advice. During her absence the work load has lessened considerably and her position is no longer necessary. Would we, the employer, be within our legal rights to in effect lay her off?

The issue for which she is on disibility is not work related. We have also been paying her health insurance premiums during this time, and she has not paid her percentage. If a layoff is acceptable, would we be able to hold any premium due from her last check, or would we have to bill her separately?

The longest you are required to hold her job, outside of a binding contract or state law that says otherwise (and the only state law in New Jersey that might override this is specific to pregnancy) is 12 weeks. Since you have held her job far longer than that, yes, you can legally terminate her employment.

I would bill her separately for the health insurance.

Thank you so much! :D