Foremost is the question of whether AIDS constitutes a handicap and is entitled to "reasonable accommodation," under applicable Federal, State, and local laws. Along with the courts, over two-thirds of the States have accepted AIDS as a handicap under their fair employment statutes. AIDS testing by employers, particularly in the public sector, raises additional legal issues and, increasingly, the legal rights of co-workers. However, more than two-thirds of American businesses do not have a formal policy for dealing with AIDS. Education about AIDS, at all levels of personnel, is the key. The best means for minimizing fear and irrational behavior is a well thought out corporate plan of action on all terminal and contagious illnesses that conveys to employees a comprehensive approach, with real concern for their workplace safety, while also protecting persons with AIDS against unlawful discrimination. Addressing the doctrine of "reasonable accommodation," management should thoroughly review the employee's medical condition and ability to perform the job and should have exhausted any possibility of restructured job duties or job transfer. Using a flexible, case-by-case approach, an employer can methodically assess the risk involved to all persons, as well as the affected employee's ability to continue to perform the job satisfactorily.