Compensatory time off is allowed only in very specific circumstances

Q We have a long-term employee who has begun acting irrationally and erratically—demanding to be placed on projects he isn't qualified for, having emotional outbursts in front of other employees—which has had a negative effect on his work performance. He also has vision issues that have resulted in the loss of his driver's license. Can we legally suspend his employment until he is evaluated by a doctor and receives medical clearance to return to work?

Your question raises two different issues, both of which involve the Americans with Disabilities Act (ADA) and possibly state antidiscrimination law, depending on where the employee is located.

It's unclear whether you want to suspend the employee and obtain a medical clearance as a result of his behavior or his vision issues. Keep in mind the ADA limits when you can obtain medical information about an employee. If the medical exam is related to his vision problems, that's acceptable, provided they are affecting his ability to perform his essential job functions and you need a physician to help determine whether he can perform his job with or without reasonable accommodations. If he cannot perform his job without his driver's license, then you have a separate issue. You may need to explore alternative positions for which he is qualified.