First: do not base your dangerous business decisions on free tidbits of hints and tips from here or anywhere. Consult with experienced labor and employment counsel to review all the facts and get an legitimate and informed opinion. No matter what you do, there are risks to the company, so make sure you understand your options. If serious about getting counsel for this, feel free to contact me.

Now, in general, you are in a conflict situation between the 'at will' rules, the disability laws, and the LC 1025 [and other] rules. If your company is not big enough to be bound by the rules, then you are 'safer' in terminating her. The more absences she has, making more problems for the company, the 'safer' you are. Etc.

Terminating an employee, under any circumstances, much less someone who is in rehab, is a very delicate matter and must be done carefully. Otherwise, you may be inviting a lawsuit. Each situation is fact specific and an employment law attorney will have many questions to ask before he or she can advise you on how to proceed. Getting permission to terminate an employee in an open forum such as this, is not wise and I doubt any lawyer will advise you to do so. If you get sued, is your defense going to be a lawyer on the internet told me it was okay?

Take the time to sit down with experienced counsel and review all of the facts of your business and this employee with him or her, so you can get proper advise on what you can or cannot do as an employer. A little investment now will minimize the chances of a much greater expense later on.