Is this employee unfairly working the system to accrue PTO?

Q: “Our company policy states that employees have to work a minimum of 32 hours a week to qualify for paid leave benefits. This includes accruing vacation. We have an employee who had surgeries done in a year. Since the employee has worked for us for five years, we were allowing him to accrue vacation even though not working full time. We were led to believe that he would start back full time soon. After a few months we informed him we could only allow him to accrue at half the current rate until he returned to full time, a minimum of 32 hours physically worked. He rarely works 32 hours a week, and has been putting down vacation time on his time sheet (anywhere from eight hours to an hour or two) to fill out the 32 hours. Every two-week time sheet has several hours of absences. I feel he should not be given the PTO benefit until he consistently works at least 32 hours per week, and/or the chronic absenteeism is addressed. The head of our company is concerned about a lawsuit if we let him go. Please advise.”