Do Your Iowa Workers’ Compensation Benefits Stop If You Are Fired From Your Job?

The short answer to this question is, “Probably not.” There is a longer answer, and I’ll talk about that below.

Part of the answer depends on whether you are receiving healing period benefits or permanent partial disability benefits at the time you are terminated. See here for a discussion and explanation about the differences between healing period benefits and permanent partial disability benefits.

If you have already reached maximum medical improvement, and are receiving permanent partial disability benefits, then the fact that you are terminated will definitely not stop your benefits. As a matter of fact, if you are terminated it might ultimately increase the amount of permanent partial disability benefits you are entitled to receive. See here for my May 29, 2012 blog post that talks about how industrial disability injuries are valued, and explains that if you are terminated from your job that can be interpreted as evidence that your usefulness to an employer has been lowered by your injury, and this in turn will entitle you to a higher industrial disability award.

If you have not yet reached maximum medical improvement, and are eligible for healing period benefits the analysis is a little more complicated. As an alternative to paying healing period benefits an employer can give you a light duty job that is consistent with your work restrictions. Sometimes while you are on light duty your employer might end up terminating you for violation of work rules based on anything from tardiness to safety violations. If you are terminated and are no longer being provided light duty work then the employer may take the position that your misconduct was in effect a rejection of the light duty work, and therefore the employer should be excused from having to pay you healing period benefits. Up until about 2003 an employer taking this position would have been successful in Iowa.

However, starting with the case of Woods v. Seimens-Furnas Controls, File Nos. 1303082 & 1273249 (App. Dec., July 2, 2003) the Iowa law began to change in recognition of the fact that sometimes employers terminate injured workers in bad faith. The current state of the Iowa law is set out in the case of Franco v. IBP, File No. 5004766 (App. Dec., Feb. 28, 2005). The analysis of Franco is as follows:

1. Iowa Code Section 85.33(3) provides that if an injured worker refuses to accept suitable light duty work, then the employer shall not be required to pay healing period benefits during the time of the employee’s refusal to do the light duty work.

2. However, a terminated employee will be entitled to receive healing period benefits unless the reason for the termination was such that it equaled an intentional refusal to perform the offered light duty work.

3. Additionally, the misconduct must be serious and must be the type of conduct that would cause any employer to terminate an employee.

4. The misconduct must also have a serious adverse impact on the employer.

5. An injured employee working with restrictions is not entitled to ignore the employer’s rules and interest.

6. However, not every act of misconduct justifies disqualifying an injured employee from workers’ compensation benefits even though the employer might be justified in taking disciplinary action.

As a practical matter the Iowa Workers’ Compensation Deputies and the Iowa Workers’ Compensation Commissioner have generally found that if a worker is terminated for something such as intentionally damaging equipment or contaminating food being sold to the public that will disqualify the employee from receiving workers’ compensation benefits.

However, if an employee is terminated for reasons such as time clock violations, miscommunications over medical appointments, accidental violation of safety rules, and similar issues, then the employee’s conduct probably will not be interpreted as an intentional refusal to perform the offered light duty work. As a general matter unless the work comp commission decides that the injured worker was trying to harm or take advantage of his employer, the worker will be entitled to receive healing period benefits if they are terminated.

Therefore, my advice for any injured workers on light duty work is to carefully follow any and all of your employer’s work rules. However, if you are terminated while you are on light duty work, and your employer and/or insurance carrier is not willing to then start paying you healing period benefits, you should talk to a lawyer who is knowledgeable about Iowa Workers’ Compensation law. There is a strong chance that you are entitled to receive weekly workers’ compensation payments in this situation.