Consequences of Terminating an Employee While on Workers' Compensation

Posted by Veritas Administrators on Mar 8, 2018 10:19:31 AM
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Claim handlingThere is a fine line in the legality of firing an employee while on workers’ compensation. The law protects employees from being fired while on disability. However, there are valid and legal reasons for dismissing an employee while on workers’ compensation. 

Can you terminate an employee while on workers’ comp? The answer is maybe. There is a fine line in the legality of firing an employee while on workers’ compensation. Employees who are on disability are protected by the law — and for good reason. But there are valid and legal reasons to let someone go when they are on workers’ compensation. 

In order to determine whether you can fire someone while they are on disability, you should consult closely with your workers comp claims adjuster and your legal team. Keep reading to learn more about claim handling in workers’ compensation cases, the injured workers’ rights and benefits, and the legal considerations of terminating an employee who is on workers’ compensation. 

Claim Handling in Workers’ Compensation Cases

Workers’ compensation claims should protect the best interest of both the injured employee and the employer. There are multiple stakeholders in this process: the injured worker, the employer, and the workers’ comp claims adjuster. 

As the employer, your role is to follow the recommendations of the adjuster and keep clear lines of communication throughout the claims process. You should keep detailed records of your employee’s injury, medical treatment, and work restrictions and you should work closely with the workers’ comp claims adjuster to consider return-to-work options. 

Although laws can vary from state to state, the law protects employees from unfair treatment while they are on disability, including workers’ compensation. It's important to be well-versed in the relevant regulations to ensure that your business is in compliance. 

Successful claim handling should do two things: First, it should ensure that the injured worker receives the necessary benefits. Second, it should protect the employer from potential legal issues. 

Learn More: 5 Tips to Ensure Quality Results in Workers’ Compensation Investigations

 

 

The Rights and Benefits of the Injured Worker

An employee disabled by a work-related injury is entitled to continued temporary total disability (TTD) workers’ compensation benefits until they are released by a physician to return to work. Return-to-work may be at a light duty capacity initially until they are released for full duty.

If work restrictions are provided by the employee’s physician and you are unable to accommodate those restrictions, TDD benefits are owed. You should accommodate light duty restrictions to mitigate exposure and return the employee back into a routine to eventually return to work full duty. 

In some cases, when an employee returns to work in a light duty capacity they may have a negative attitude or show misconduct, perhaps because they returned to a lesser paying job or are dissatisfied with the job they were assigned.  

The employee may reach maximum medical improvement (MMI) meaning their treatment options have been exhausted and their condition will not improve to the extent that they are able to work full duty at the job that they had prior to their injury. 

In this case, you are required to make reasonable efforts to accommodate the new work restrictions so that the employee can perform their job. 

Learn more: Workers Compensation: Navigating Regulations as an Employer

 

Legal Considerations for Terminating an Employee on Workers’ Compensation

It is important to know that if you terminate an employee while receiving workers’ compensation benefits, they are still entitled to receive those benefits. The benefits do not terminate with their employment. In fact, an individual who has restrictions or is totally disabled is not employable — therefore, unemployment benefits are not available to them. Lost time benefits will continue until they are released to return to work full duty or are placed at MMI.

Workers’ compensation premiums are costly. In some cases, employers have attempted to limit an employee’s lost time benefits by seeking opportunities to terminate an employee for causes unrelated to the work-related injury. Not only could this strategy expose an employer to a retaliatory discharge suit, the workers’ compensation benefits (medical and lost time benefits) will continue for the employee. 

You should consider delaying termination of your employee until they are at their pre-injury status. Once an employee is injured, terminating them will not provide any cost savings in your premium. Additionally, it could cost more if you do not have a position available for the injured worker when they return because TDD benefits for lost time have no time limitations and can be continued indefinitely. 

In the Illinois case Interstate Scaffolding, Inc v Illinois Workers' Compensation Commission, No 107852, 2010 WL 199914 (Ill Sup Ct 1/22/10), Jeff Urban was a union carpenter who suffered from heat stroke while on a jobsite. As he was being transported to the ambulance, he fell and hit his head and sustained serious injuries to his head, neck and back. He underwent many treatments and tests for his injury. At times, he was able to return to work on light duty, and other times he was on TTD. In 2005 he got into an altercation with another employee while at work. Jeff’s company fired him and refused to pay him any more TTD benefits. The case was brought to an arbitrator and court, and it was ultimately determined that although he was fired, he was still due his TTD benefits.

Learn More: 6 Best Practices When Dealing with the "Repeat Offender" 

 

 

Tying It Together 

During the claim handling process, it’s important to keep the lines of communication open between the employee, employer and workers’ comp claims adjuster. This will encourage the employee to work with their doctor to regain their health to the point where they can return to work with no restrictions. 

Veritas Administrators specializes in nationwide workers’ compensation claims handling. Customizable to fit your needs, our team can serve as an extension of your organization in a full TPA capacity or specific task work. Schedule a call to learn more about all the ways in which Veritas can take workers’ compensation claims problems off of your desk.

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