What Happens if Your Employer Terminates You While on Arizona Workers' Compensation?

Being injured on the job is stressful enough, but the added worry of losing your job while on workers' compensation can feel overwhelming. In Arizona, the legal landscape for workers' compensation is designed to protect injured employees, but understanding your rights and how termination might affect your benefits is crucial.

Let's break down what happens if you find yourself in this situation.

Arizona's "At-Will" Employment & Workers' Compensation Protections

Arizona is generally an "at-will" employment state, meaning an employer can terminate an employee for any reason, or no reason, as long as it's not an illegal one. However, the Arizona Workers' Compensation Act provides specific protections for injured workers.

Employers are prohibited from discriminating against or subjecting any person to retaliation for:

• Asserting any claim or right under the Act.

• Assisting any person in doing so.

• Informing any person of their rights under the Act.

If you believe your employer has terminated you in retaliation for filing a workers' compensation claim, you have the right to file a complaint with the Industrial Commission of Arizona's (ICA) Labor Department. It's important to be aware of any time limits that may apply to filing such a complaint.

How Termination Impacts Your Workers' Compensation Benefits

Arizona's workers' compensation system is a "no-fault" system, meaning an injured employee is entitled to benefits regardless of who caused the job-related accident. The primary goal of this system is to compensate an injured worker for lost earning capacity, not for pain and suffering.

Here's how different types of benefits are generally affected:

• Medical Benefits: Your entitlement to reasonable and necessary medical, surgical, and hospital benefits for your industrial injury generally continues regardless of your employment status. Termination of employment does not, by itself, stop your right to medical care related to your accepted industrial injury.

• Temporary Disability Benefits: If you are still temporarily totally or temporarily partially disabled and unable to work at your full capacity, your wage loss benefits would typically continue. These benefits are usually 66⅔% of the difference between your average monthly wage before the injury and what you are able to earn thereafter.

• Permanent Disability and Earning Capacity: This is where the reason for termination becomes especially significant.

  • For unscheduled permanent impairments (which includes injuries to the hip, back, or shoulder, among others, unlike scheduled injuries that affect specific body parts like a hand or foot), compensation is based on your loss of earning capacity.

  • Historically, if an employee was terminated for misconduct, that specific job might not be used to determine future earning capacity, and the focus would shift to the open labor market.

  • However, a significant amendment to A.R.S. § 23-1044(D) specifically addressed this issue and overruled prior case law. This amendment clarifies that if you are terminated from employment for reasons unrelated to your industrial injury, the Industrial Commission may still consider the wages you could have earned from that employment as representative of your earning capacity.

  • The Administrative Law Judge (ALJ) will consider all relevant evidence in determining your loss of earning capacity. This means that even if there were other reasons for your termination (e.g., economic conditions or non-injury-related factors), you can still present evidence showing that difficulties in finding other employment are due, in whole or in part, to your industrial injury or its resulting limitations. Compensation benefits are payable if limitations from your industrial injury contribute to your inability to secure employment at pre-injury wage levels.

    
    

• Vocational Rehabilitation: If your industrial injury's medically verified physical limitations prevent you from returning to your regular work, you may be eligible for vocational rehabilitation assistance through the ICA's Special Fund Division. While you are not required to participate, if your carrier declines to offer financial support, the Special Fund may still be able to assist.

  
  

Seeking Help and Understanding Your Rights

The Arizona workers' compensation system can be complex, especially when employment issues like termination are involved.

• Consult an Attorney: The defendants (employer and insurance company) will have a lawyer. Only a lawyer licensed in Arizona can give legal advice. It is highly recommended to consult with an attorney who specializes in Workers' Compensation to understand your specific liabilities and obligations under the Act. Workers' compensation attorneys often work on a contingency basis, typically receiving a percentage (e.g., 25%) of your monthly benefits if successful.

• Contact the ICA Ombudsman: The Industrial Commission Ombudsman can provide general information about the workers' compensation system and the hearing process. However, the Ombudsman does not give legal advice.

• Document Everything: Keep thorough records of all communications, medical reports, employment records, and any evidence related to your termination and your injury.

Understanding your rights and the nuances of Arizona's workers' compensation law is essential if your employment status changes while you're recovering from a work injury. Don't hesitate to seek professional guidance to protect your interests.