I am the warehouse manager for the company I work for. I am young ,22, and the rest of my family works there as well. I have had a lot of stress in my life for the past 18 months. My mother passed away unexpectedly and suddenly in January of 2011. That has caused me a great deal of stress in my life in general then you add on all the stress my job carries with it. Then just last week my father, who also works for the same company was diagnosed with lung cancer.My stress has NOT caused my work performance to suffer at all. It has not effected my ability to perform all tasks I am given. Today my boss called me in the back office to "try and figure out where my head is". He asked me if I was planning to quit. When I told him no he then asked what he could do to help me. I told him some time off would help a lot. He told me I have to keep being strong because he can't let me have time off till the end of the month.Then proceeds to inform me that he believes that I should go and talk with a psychologists. I could be wrong, but this strikes me as not legal. So my question is: Is it legal for my employer to tell me I need psychological help?

I know this is a law forum and this is not a law answer and that I will probably be chewed out for this later... but it sounds like he wants to help you not as though he is harassing you. Perhaps he see's that you're under a lot of stress and feels like you could use some help coping with everything that's happened. I don't think he wants to loose you as an employee, he just wants to make sure that you're okay.

Seeing a psychologist is nothing to be embarrassed about, and having your boss suggest that you see one simply means he cares enough about you to worry.

Ditto Gernald. What gave you the impression that your employer's suggestion was anything but kind? It sounds to me like he genuinely cares about you and your parents.
Seeing someone about grief and stress doesn't even have to be a psychologist, a word he probably meant generically. Other people can do grief counseling/therapy, and there are groups for this too, often even more helpful if you feel that you are a good communicator, which it sounds like you are. (Plus insurance covers them longer.)
No one is suggesting mental illness.

Why would you think it is illegal? All I see here is a boss advising an employee they need help. There is nothing illegal about it. Seeing a psychologist can help you deal with stress.

I think you should have thanked your boss for his concern and taken his advice.

P.S. to Gernald. No chewing out, sometimes things need to be said.

Most larger companies have an employee assistance program for employees who may have drinking or drug issues and mental health issues. In fact they are required to offer you the program.

The fact they did this, most likely yes your job performance must be sliipping, that is part of mental health issues, normally YOU don't see it happening. So my advice take it, see if the program helps pays for counseling and get into it. You should be thanking your boss for caring enough.