State Laws

• As required by the federal government, states manage their own workers' compensation systems, and laws vary slightly from state to state. States that operate under at-will employment agreements allow employees and employers to terminate a working relationship at any time without cause. Illegally fired employees in at-will states include employees fired for reasons such as race, religion or gender. If you've complained about illegal activity under what is known as the "whistle-blower" clause, experienced discrimination of any sort or complained about the health and safety violations in the workplace, you have protection under federal law.
  
  

Retaliation Laws

• Many states have laws that make it illegal to fire an employee who suffered an injury while on the job. While these laws protect the injured worker from firing because of an injury, other reasons may legitimately exist to fire the employee. A company that cannot afford to keep the position open or train someone else to do the work may be able to fire the employee because of a serious business disadvantage.
  
  

Reasons for Firing

• Firing an injured worker is always a risky endeavor because of the protection an injured worker receives under retaliation laws. Certain circumstances warrant firing an employee after a workers' compensation settlement. Circumstances include illegal activity by the employee, violation of critical company policies or substandard work performed by the employee. Other reasons include the lack of the employee to communicate the status of his medical condition and an expected return to work date. In all of these cases, it's a good idea to have substantiated records to back up the firing of the employee.
  
  

Can't Do the Work

• Small employers face difficult challenges when an employee receives an on-the-job injury. If the employee can no longer do the job because of the injury, and no other work is available for the employee, the employer can terminate the employee, but this has to be clearly stated. In these circumstances, the employee would be entitled to whatever continued treatment was afforded him in the settlement regardless of whether he works for the employer.