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Can I Terminate an Employee that Filed a Workers’ Comp Claim?

By Nancy Owen, PHR, Senior HR Consultant, East Coast Risk Management 

If you are thinking about firing an employee who recently filed a workers’ compensation claim, who is collecting workers’ compensation benefits, or who just returned to work following a compensated work injury or illness, you may want to rethink your decision to terminate.

Terminating an employee who has filed a workers’ comp claim is not against the law. However, any termination that occurs close on the heels of a workplace injury or illness could be viewed as discriminatory or retaliatory and could be considered a wrongful termination.

Most states have workers’ compensation laws that impose stiff penalties when an employee is terminated as a result of filing or preparing to file a workers’ compensation claim. These penalties can be in the form of fines, jail time, or both. Such penalties can result when employers wrongfully terminate their employees, not necessarily intentionally, but in some cases without just cause.  Therefore, employers should take a careful look at the situation before taking any adverse action. They should consider if they can prove that the employee was not fired because of retaliation against a workers’ compensation claim.

A few good points to remember:

  • Consider federal law. Federal law prohibits employers from discriminating against an employee because the employee reports an injury or an illness. In addition, firing an employee on workers’ comp may prevent other employees from filing claims for fear they will lose their jobs. According to a survey from, nearly 1 in 10 U.S. workers who have been injured while at work said they didn’t report the incident because they didn’t want their employers to retaliate.
  • Consider your state’s law. Learn your state’s requirements regarding workers’ compensation. Most state laws cover employers with as little as one employee. Many state workers’ comp statutes contain retaliation provisions which allow employees to sue their company if they believe they were fired in retaliation for using workers’ comp benefits. The best practice before considering termination is to consult with your employment attorney first.
  • Consider your company’s policies. Do you know your company policies regarding terminations? This is very important when you are considering a termination. If you do not follow your company’s policies, you will have trouble defending your decision to take an adverse action. Do you have a progressive disciplinary action process? Did you follow it? Can you prove that you have treated this employee consistently with your Company’s policy and practice?
  • Consider the timing. Don’t use this as the time to terminate an employee who has not performed well if no previous action was taken to correct the conduct or performance. From the start of employment, you should be setting clear expectations, holding your employees accountable, and documenting all disciplinary actions. And you should be doing so in real time. You never know if or when your problem employee will become your next workers’ comp claim. If you neglect to discipline in a timely manner, or neglect to document such discipline, you put the company at great risk by finally taking action following a work-related injury. If you are considering terminating an employee for misconduct that occurred weeks ago, but who since suffered a work injury and filed a workers’ compensation claim, you will most likely lose a wrongful termination claim filed against you.

What does constitute retaliation for workers’ compensation?

All too often, employers get mad because of the cost of a workers’ compensation claim and they take their frustration out on employees who have filed claims. Termination is just one of the results. However, several other actions could be construed as retaliation or discriminatory. These may include:

  • Demoting the employee.
  • Changes in the employee’s position or responsibilities or job title.
  • Negative feedback on the employment evaluation with no just cause.
  • Reducing the employee’s salary or hourly rate.
  • Changes in work hours or giving the employee the worst schedule.
  • Disciplinary action when it is not warranted.
  • Taking any such action against an employee is testifying in a workers’ compensation case.

Remember, it is illegal for an employer to fire an employee, or retaliate against them in any other way, for filing a claim.

Does all this mean you cannot discipline a person with a workers’ compensation claim?  No, an employer can generally discipline if they can show good cause. Good cause is defined as a “fair and honest” cause or reason that has been considered in good faith on the part of the employer. Remember, any time you are disciplining an employee, whether they are a workers’ compensation claimant or not, be sure you have evidence that backs up the need for discipline. And make sure you are following your company policies.

If you are an employer with questions about any safety, workers’ compensation, or human resources issue, contact East Coast Risk Management by calling 724-864-8745 or emailing us at We will be happy to help!


Disclaimer: The information provided on this web site is for informational purposes only and not for the purpose of providing legal advice. Use of and access to this Website do not create an attorney-client relationship between East Coast Risk Management or our employment law attorney and the user or browser.