Terminating a Workers’ Comp Claimant in Texas

Melanie Baird
Sr. Claims Advocate

The outcome of a Workers’ Compensation claim can be affected by the termination of an employee who was injured on the job. An employer can discipline the employee for not following policies and procedures, but should carefully consider the pros and cons of termination. Developing a solid safety program and managing risk in the workplace is vital to preventing on-the-job injuries and avoiding these issues.

When an employer subscribes to Workers' Compensation in Texas, the Workers' Compensation law limits the type and amount of compensation an injured worker can receive. Since Workers’ Compensation is voluntary, it is no fault insurance. Regardless if the employee had any contribution to their injury, it is covered under Workers' Compensation as long as it was in the course and scope of their employment, unless:

  • Employee was involved in horseplay
  • Willful criminal acts or self-injury
  • Intoxication from drugs or alcohol
  • Voluntary participation in an off-duty recreational activity
  • A third party’s criminal act if directed against the employee for a personal reason unrelated to the work
  • Acts of God

If you terminate an employee because a post-accident drugs test was positive for drug and/or alcohol use, the test results need to be submitted to the workers’ compensation adjuster immediately. Drug and alcohol use is not covered under Texas Workers’ Compensation and the claim can be denied.

If your company policies include immediate termination for an employee, who for example had an accident while driving a company-owned vehicle because they were talking on their cell phone, the injury remains a compensable injury and income benefits will be paid to the employee even though you have terminated their employment. The law places a heavy emphasis on return-to-work programs, since all studies show that recovery is faster and more efficient if an employee has some kind of useful work to do. If you terminate their employment, you can no longer bring them back to work and compensation benefits will continue to be paid to that employee and could potentially be paid for the statutory period of 104 weeks. This will increase your company's loss ratio, and most likely cause an increase in your experience modifier and your insurance premium at renewal. Best practice in this situation would be to not terminate the employee, bring them back to work as soon as medically appropriate, counsel the employee on company policy, use disciplinary action for not following company procedure, and restrict the employee from driving a company-owned vehicle until training, or a probationary period, has been completed.

Also remember, Chapter 451 of the Workers' Compensation law prohibits discrimination or retaliatory action against employees who have filed workers' compensation claims or are in the process of doing so. Stray remarks can be harmful to a company's legal position in a Chapter 451 lawsuit, therefore, it's best to never talk about a claim in terms of it being a problem, since negative remarks can be perceived as intended retaliation against the claimant.

For a review of your claims management processes and return-to-work program, or help establishing policies and procedures to limit the risk of expensive workers' compensation claims against your company, contact one of our Advisors at 888.687.6078 or by email at:

Justin Crain, jcrain@gibraltarrisk.com
Jeff Anderson, janderson@gibraltarrisk.com