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June 17, 2011
Can You Terminate An Employee On Workers' Compensation?

Can you terminate an employee on workers' compensation? In most states, workers' compensation claimants may legally be terminated while a workers' compensation claim is pending so long as employee is not otherwise protected by law. However, employers may not retaliate against an employee for filing a workers' compensation claim in almost every state.

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In a BLR webinar entitled "Workers’ Comp 101: What HR Must Know," Susan Fahley Desmond offered further information on what an employer should do and what should be considered before terminating an employee with a workers' compensation claim.

If state law permits termination of WC claimants, employer must determine the following:

  • Is claimant an at-will employee or must employer demonstrate cause?
  • Is the employee entitled to Family and Medical Leave Act (FMLA) protections?
  • Is the employee covered under the Americans with Disabilities Act (ADA)?
  • Is the employee being terminated for a discriminatory reason?
  • Is the employee being terminated for a reason contrary to public policy?

Additionally, Desmond offered some practical considerations for employers to consider.

Negative consequences:

  • Commissioners/judges are more likely to be sympathetic to an unemployed claimant
  • May result in higher disability awards as well as need for vocational rehabilitation

Positive consequences:

  • The employer may need to fill the position for production purposes
  • The employer may rid itself of a poor-performing employee

Desmond also outlined in the webinar what documentation an employer needs to terminate an employee on workers' compensation:

  • Employers must document reasons for termination
  • If for poor performance, employers must ensure that reasons are outlined in evaluations and/or that disciplinary process has been followed
  • If a need-based termination, employers must articulate business need behind termination (i.e., inadequate production required staffing change)

Susan Fahey Desmond is a shareholder with Watkins Ludlam Winter & Stennis (www.watkinsludlam.com) and has been representing management in labor and employment law since 1985. She is listed in Best Lawyers in America for labor and employment law and has been named by Chambers USA as one of America’s leading business lawyers. She is a frequent speaker and author for labor and employment law.

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