Can You Terminate an Employee on Workers’ Comp in California?

Yes, a California employer can terminate an employee on workers’ comp, but the injury or the claim itself can never be the reason. California is an at-will state, so firings for genuinely unrelated reasons remain lawful even while a claim is open. The moment the claim becomes part of the employer’s reasoning — openly or by inference from timing — the termination violates Labor Code Section 132a and likely the Fair Employment and Housing Act as well.¹

Reasons an Employer Can Still Fire You

An injured worker is not immune from termination. Three categories of reasons generally hold up:

Company-wide layoffs or restructuring, as long as the decision wasn’t aimed at the injured worker specifically.
Performance problems or misconduct that were documented before the injury. A first write-up that appears right after the claim is filed looks retaliatory, and employers struggle to defend that pattern.
Inability to perform the essential functions of the job even with reasonable accommodation, and only after the employer has completed the interactive process required by FEHA.²

In every case the employer carries the practical burden of showing the firing would have happened whether or not the worker was injured. Timing is heavily weighted. A termination two weeks after a claim is filed invites a retaliation finding even when the stated reason sounds legitimate on paper.

What Makes the Termination Illegal

Labor Code Section 132a prohibits employers from firing, threatening to fire, or discriminating against employees for filing a workers’ comp claim, announcing an intent to file, receiving a settlement or award, or testifying in another worker’s case.¹ Retaliation isn’t limited to termination. Demotion, cuts to hours or pay, reassignment to undesirable duties, and a hostile environment designed to force a resignation all qualify.

FEHA adds a second layer. Most work-related injuries meet California’s definition of disability, so firing a worker because of the physical limitations the injury caused is disability discrimination regardless of what the termination paperwork says.² An employer who never explored whether modified duties or assistive equipment could keep the worker on the job is likely in violation.

One narrower federal protection applies if the injury itself stemmed from a safety hazard the worker reported. OSHA’s whistleblower program covers retaliation for that reporting, but the filing deadline is only 30 days from the retaliatory act.³

The Interactive Process the Employer Has to Complete First

Before terminating an injured worker, California employers must engage in a timely, good-faith interactive process to explore whether a reasonable accommodation would let the employee keep working.² Skipping that step is itself a FEHA violation, even if no accommodation would actually have worked.

Reasonable accommodations can include modified duties, ergonomic equipment, schedule adjustments, remote work arrangements, reassignment to an open position the worker can perform, or additional unpaid medical leave. The employer doesn’t have to invent a new job, but it does have to consider whether any existing open role fits.⁴ An accommodation can be refused only if the employer can show genuine undue hardship — significant difficulty or expense, not mere inconvenience.

Blanket policies requiring workers to be “100% healed” or fully released with no restrictions before returning are a well-known trap. California law requires individualized assessments of each worker’s ability to do the job with or without accommodation. A one-size-fits-all rule invites a discrimination claim.

When Protected Leave Runs Out

Workers injured on the job often qualify for protected leave under overlapping laws. The federal Family and Medical Leave Act provides up to 12 weeks of unpaid, job-protected leave for employees who worked at least 12 months and 1,250 hours for an employer with 50 or more employees within 75 miles.⁵ California’s Family Rights Act provides 12 weeks as well, kicks in at employers with as few as five employees, and has no geographic radius requirement.⁶

Exhausting FMLA and CFRA leave does not automatically authorize a termination. FEHA may require additional unpaid leave as a reasonable accommodation if the worker is expected to recover and return within a reasonable timeframe. An employer who fires a worker on the last day of CFRA leave without asking whether a short extension or alternative arrangement could work is walking into a lawsuit. The interactive process applies with full force at the end of protected leave, because by then the employer plainly knows the worker has a disability.

Penalties for a Retaliatory Firing

An employer found to have violated Section 132a faces both financial and criminal consequences. The worker’s compensation benefits are increased by 50%, up to a maximum of $10,000, plus costs and expenses up to $250. The employer can also be ordered to reinstate the worker and reimburse all lost wages and benefits caused by the termination.¹ The violation is also classified as a misdemeanor, giving prosecutors a criminal option in egregious cases, although civil penalties are far more common in practice.

A separate FEHA claim for disability discrimination can produce damages well beyond the Section 132a cap, including compensation for emotional distress and attorney fees. Many terminated workers file both.

How to File a Section 132a Petition

A worker who believes they were fired or punished for filing a workers’ comp claim can file a petition for discrimination with the Workers’ Compensation Appeals Board. The deadline is one year from the discriminatory act or the date of termination, and missing it forfeits the Section 132a claim entirely.⁷

A Section 132a petition can only be filed if the worker already has a pending case at the WCAB. If no claim is open yet, the worker needs to file an application for adjudication of claim first. The petition itself goes to the local WCAB district office, with copies served on the employer and any other parties. The filing package includes a document cover sheet, the petition form, a verification, and proof of service.⁷

A FEHA disability discrimination claim is filed separately, with the California Civil Rights Department. The two claims cover overlapping but distinct violations.

Your Workers’ Comp Benefits After You’re Fired

Losing the job does not end workers’ compensation benefits for the underlying injury. Medical treatment continues as long as it’s medically necessary. Temporary disability payments continue as long as the worker remains unable to work because of the injury. Permanent disability benefits, if awarded, are based on the injury and are unaffected by employment status.

One benefit becomes especially relevant after termination. If a workplace injury causes permanent partial disability and the employer doesn’t offer regular, modified, or alternative work within 60 days of learning the disability is permanent, the worker is entitled to a $6,000 Supplemental Job Displacement Benefit voucher for education and retraining at accredited schools or training programs.⁸

Health Insurance After the Termination

Workers’ comp pays for treatment of the work injury, not for unrelated medical care, so losing employer-sponsored health insurance creates a gap many workers don’t see coming. Federal COBRA applies to employers with 20 or more employees. When a covered worker is terminated for any reason other than gross misconduct, the employer must offer the option to continue the group health plan at the worker’s own expense, typically for 18 months and in some circumstances up to 36.⁹

For employers with 2 to 19 employees, California’s Cal-COBRA provides similar continuation rights for up to 36 months. Workers who exhaust 18 months of federal COBRA can bridge into Cal-COBRA for an additional 18 months.¹⁰ Premiums under either program are considerably higher than what the worker paid as an employee, since the employer no longer subsidizes the cost, but keeping coverage avoids leaving a recovering worker exposed on non-injury health needs.

1
California Legislative Information. California Code Labor Code LAB 132a
2
California Legislative Information. California Government Code 12940
3
Occupational Safety and Health Administration. Whistleblower Protection Program
4
California Civil Rights Department. Employment Discrimination Based on Disability
5
U.S. Department of Labor. Fact Sheet 28H – 12-Month Period Under the Family and Medical Leave Act
6
California Civil Rights Department. Family Care and Medical Leave and Pregnancy Leave
7
California Department of Industrial Relations. How to File a Petition for Discrimination (Labor Code Section 132a)
8
California Legislative Information. California Labor Code 4658.7
9
U.S. Department of Labor. FAQs on COBRA Continuation Health Coverage for Workers
10
California Department of Managed Health Care. Keep Your Health Coverage (COBRA)