Posted on 09/14/2011, by Jeremy Edsall
Sticky Situation: Can You Terminate an Employee on Workers’ Compensation?
Terminating an employee while they are on workers’ comp leave, or shortly after they return, is a tricky topic. The situation needs to be handled delicately and thoroughly, making sure that all of your bases are covered. Otherwise, you could face litigation stemming from accusations of retaliatory discharge.
First of all, is it legal to fire a worker while they are on worker’s compensation? The answer is yes, as long as the reason for termination is unrelated to the employee’s workers’ comp claim. It is illegal to fire a worker because they invoked their right to workers’ compensation. That is known as retaliatory discharge.
As an employer you need to determine if firing this employee, whether it be while they are still on leave or shortly after they return to work, is a priority. Even if you have a valid and documented reason for firing the employee, most often believe that the reason for their firing is their worker’s comp claim.
The employee can file a complaint against your company for retaliatory discharge if they suspect that is the reason for their firing. To fight a claim of retaliatory discharge the burden is on you to prove that firing the employee was not motivated by the claim and/or a “business necessity,” something that isn’t always easy to do if there hasn’t been thorough documentation of other reasons for firing, such as continued poor job performance.
Additionally, closing a workers’ comp claim for an employee that is no longer with the company may be more difficult. A terminated employee continues to be eligible for all benefits until the doctor certifies that they would be able to return to work. If they are terminated, an employee may try to drag out their claim by causing their rehabilitation to go slower.
Take steps to prevent finding yourself in the position of needing to fire an employee on workers’ compensation and not having the evidence to support the termination. Make sure that your company has a policy in place for documenting poor performance and notifying employees with warnings.