Employer Liability When Planning Medical Leave During Workers' Compensation

Employer Liability Overview

Employers can face civil or administrative penalties if they schedule an employee's medical leave while the employee is still receiving workers' compensation benefits. The key issue is whether the employer's action violates the employee's rights or the state workers' compensation statute.

Legal Foundations

Workers' compensation laws provide a no‑fault insurance system that covers medical care and lost wages. Employees are generally prohibited from receiving both workers' compensation and unemployment or disability benefits simultaneously. If an employer forces an employee to take additional leave that effectively reduces the employee's workers' compensation benefits, the employer may be viewed as attempting to circumvent the statutory benefit limits.

Potential Employer Consequences

1. Workers' Compensation Board Sanctions – Boards can impose fines, require restitution, or mandate corrective actions if the employer's scheduling is deemed improper.

2. Civil Liability – An employee may sue for damages or punitive damages if the employer's conduct is found to be willful or reckless.

3. Insurance Impact – The employer's workers' comp insurance carrier may increase premiums or refuse coverage for future claims if the employer's conduct is deemed negligent.

Defenses an Employer Can Use

Employers may argue that the scheduling was based on legitimate operational needs, that the employee consented to the arrangement, or that the employee was already receiving adequate benefits. Documentation of the employee's consent and a clear business rationale can mitigate liability.

Practical Steps for Employers

• Review state workers' compensation statutes and consult legal counsel before scheduling leave during an ongoing claim.
• Maintain detailed records of all communications and agreements with the employee.
• Coordinate with the workers' compensation insurer to ensure compliance with benefit limits.

Key Takeaway

Employers should exercise caution and seek legal advice when planning medical leave for an employee who is still receiving workers' compensation benefits, as improper scheduling can lead to penalties, lawsuits, and insurance repercussions.