An employer is not required to hire or retain a candidate or employee posing a "direct threat" to the health and safety of co-workers or themselves. The job must pose an imminent and substantial degree of risk. Still, the employer must first engage in the interactive process to determine if there is any reasonable accommodation that would allow the candidate or employee to perform the job without endangering his or her health or safety, or the health or safety of others or without causing undue hardship. There is a heavy burden of proof on the employer that rejects an employee because of an alleged direct threat to his or her own health or safety.
Employers cannot refuse to hire someone because of a slightly increased risk or fears there might be a risk in the future or based on stereotypes or perceptions about the disability.
The concept of "undue hardship" includes any accommodation that is unduly costly, extensive, or substantial to a particular employer, or which would fundamentally alter the nature of the operation of the business. In general, a larger employer would be expected to undertake greater efforts and expense to make an accommodation than a smaller employer. Even if a particular accommodation would result in undue hardship, the employer would be required to provide an alternative accommodation if that accommodation was available and did not cause an undue hardship.
Employers should consult with legal counsel when faced with these difficult compliance decisions.
You can find more information in the Laws Protecting Employees with Disabilities section of the HR Library.