Q. "Can we discipline an employee for working another job during FMLA?"
Answer:
Yes, in two circumstances: (1) You can discipline the employee if their other job violates your outside employment (aka moonlighting) policy or (2) if they obtained FMLA leave fraudulently.
If the employee's second job indicates that the employee lied to you about their serious health condition. For example, if the employee’s FMLA certification states that they need to be on bed rest to recover from surgery, and the employee is performing physical labor at another job, you’ve got a case of FMLA fraud.
In grayer situations, proceed with caution: require a recertification in light of new information. Disciplining an employee on FMLA leave without knowing all the facts can give rise to an FMLA interference claim.
If you do not have a policy that prohibits employees from working for other employers and the employee’s work for the other employer is compatible with their health condition (i.e., the employee works a physically demanding job at Organization A, but works a desk job for Organization B during leave), then there is no cause for discipline.