March 29, 2013
Q&A on workers' comp, employee discipline, and termination

Workers’ compensation laws may seem to preclude the ability to discipline or terminate an injured employee, but it doesn’t have to be that way. In fact, employers can definitely stay within the boundaries of workers’ compensation while effectively implementing employee discipline and even terminating employees for good cause. David Schmit told us how in a recent BLR webinar. He lent his expertise at the conclusion of the webinar to answer participant questions. Here’s a sample:

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Q. What do you recommend employers do when an employee is out on workers’ compensation leave for an extended amount of time, such as 2 years or more? Can the employee be terminated?

A. It depends on the type of business that you have. It’s difficult to accommodate someone that doesn’t come into work. However, naturally, you need to run your business. I would suggest you establish a policy that you can only tolerate a person being out for x months. Keep in mind that you need to tie that policy to real business necessities. It cannot seem arbitrary. Then you need to put everyone on notice that anyone out for an extended amount of time (such as 6 months) may have to be replaced. You could choose to include a priority right of rehire.

Also, depending on how critical various employee roles are, you may have to have differing lengths of time for different roles. Either way, a policy needs to be established to protect yourself. It needs to have integrity and good faith. Keep in mind, you also have a tremendous resource in your workers’ compensation insurance carrier. You are not in this alone. You should be relying on your workers’ compensation carrier to assist you with these kinds of issues.

Q. If an injured worker out on workers’ compensation leave has had no contact with the employer for 6 months and then comes back and wants her job, is the employer required to bring her back to work? The injured worker has not been terminated officially, but that was the next step because the claim had previously closed.

A. This scenario requires analysis of the specifics of the situation. For example: is there a clear outline of employee responsibilities while on leave in your personnel policy? If not, updating the policy is important. It should be clear that not reporting to work and not showing up for x days is grounds for termination and that there are still employee responsibilities to keep the employer informed while on leave.

In this particular case, you may be required to take the person back (in the absence of a clear policy). However, it should be assessed why you were moving toward termination at this point: Was it because of the length of time away? Were there other reasons to terminate?

Q. Does the employer have to create a position (or find a position) for an employee who returns back to work after their position was replaced due to lack of staffing? The employee was out on workers’ compensation leave for almost a year; the position was replaced 3 months prior to him getting cleared to return to work.

A. This situation also requires a detailed "business necessities" analysis. It must be shown that there was a true business necessity to replace them before they were able to recover enough to return to work. It is important to note that if they were replaced while on temporary disability, the employer is in a precarious position. You need to work hard to justify the business necessity since it cannot be shown that the employee would never be able to return.

If we can assume there was indeed a business necessity and that the injured worker was only temporarily disabled (i.e. they could now perform the role), then they should at least have a priority right of rehire.

Q. We employ seasonal workers. There seems to be an increased number of injuries right before the end of the season. We suspect fraud—what can we do?

A. This is something you need to work on with your workers’ compensation carrier. There’s no simple answer to this. There are a lot of hard working people who work with pain. At a certain point in time they may choose to declare it. Then there are other flat-out frauds. That’s not a discernment that most individuals can make just by looking at the situation. It’s a tough thing to call and you can’t do it alone.

Get your workers’ compensation carrier involved in this right away in anticipation of your seasonal layoff. One expensive way of doing it would be (and for seasonal workers, this is out of the question, but we will discuss anyway) pre-employment physical evaluations. While it may not be practical – and may not even be allowed under state law except for specific jobs – it is one option.

For more information on workers’ compensation laws and how they affect discipline and termination decisions, order the webinar recording of "Workers’ Comp: How to Discipline or Terminate Claimants While Minimizing Your Legal Risks." To register for a future webinar, visit

Attorney David Schmit is the founder of Schmit Law in Oakland, California. Schmit represents employers’ interests in state and federal courts and administrative forums in workers’ compensation matters, including workers’ compensation, civil personal injury law, and wrongful termination cases.

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