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Can An Employee Be Fired While On Workers Compensation?

An employer can fire an employee with an open workers’ compensation claim. However, an employer cannot fire a worker because of a workers’ compensation claim.

The New York State Workers’ Compensation Law (WCL) does allow employers to fire employees who have filed workers’ compensation claims and are receiving benefits. The reason for termination MUST be for a valid business reason, which may include misconduct, insubordination, the need for layoffs due to financial problems, lengthy absence from work, inability to perform the job, or poor work performance. It is important to consider that these reasons would generally be valid termination reasons for any employee under a similar set of circumstances.

The termination is illegal if it is retaliatory. Employers are prohibited from terminating an employee because the employee has reported a workplace injury, filed a workers’ compensation claim, or received compensation pursuant to Workers’ Compensation Law § 120 or testifies in a workers’ compensation hearing. Additionally, employers cannot demote, harass, or otherwise harm an employee because he or she is exercising their rights under the workers’ comp system. An employee who has been the victim of unlawful retaliation can sue over this and win.

Rarely, however, will an employer make the mistake of telling an employee that he or she is being fired due to a workers’ compensation claim. But, if a person believes that his or her employment was terminated because they suspect it was due to their workers’ compensation claim, they should try to gather evidence to prove the suspicion.

Contracted employees also have rights. An employer cannot terminate a contracted worker in retaliation for a workers’ compensation claim. However, a contracted employee needs to look at his or her employment contract. The contract should list the specific reasons an employer may terminate the contract. A frequent clause in employment contracts is a provision that allows an employer to terminate employment if an employee is unable to work for a given period of time. Employers often will terminate employees on long-term workers’ compensation claims using such a provision. Termination for this reason is usually legal.

With all workers, employers should be firm and clear about what is expected of their employees in their absenteeism and time-off policies. A handbook from Cornell University’s Division of Human Resources, for example, clearly says that the job of a benefit-eligible staff member’s position on Short Term Disability is held for a combined total of 26 weeks of any medical leave during any 12-month period. After the 26 week period has elapsed, “the department is no longer required to hold [the] position, and it may be filled at the department’s discretion.”

All employees should print emails and save documents related to their injury and their employment in case they ever need to initiate an employment discrimination lawsuit.

There is two-year statute of limitations that applies to workers’ compensation cases in New York.


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