Texas Labor Laws on Laying Off Someone Who's Out on Workers' Compensation

Workers' compensation insurance provides medical and income benefits to covered employees.
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No one likes to receive or be party to a work-related injury. Work-related injuries affect more than just the person injured. Your employer loses a valuable employee when you can't work and you can lose part or all of your salary, as not all private employers in Texas carry workers' compensation insurance. Texas is the only state in the U.S. that allows private employers to choose whether to carry it. If a Texas employer does not carry workers' comp insurance, she must post a notice indicating that fact in a place where all employees have access to it.

Employment Contract

    Unless you have a signed contract with your employer stating otherwise, Texas law recognizes an at-will agreement in the employer-employee relationship. Under an at-will agreement, either party to the relationship can cancel the agreement without cause. Under this law, an employer does not need a reason to lay off or fire an employee and can do so at any time. But if the employer lays off or fires an employee because she filed a workers' compensation claim, other laws come into play.


    The Texas Department of Insurance reports that only 21 percent of employees with a work-related injuries are fired or let go after their injuries. Texas labor laws make it illegal for employers to discriminate or retaliate against an employee who files a workers' compensation claim. It is also illegal when the employer discriminates against a worker who hires a lawyer to represent her in a workers' comp claim against her employer or testifies in a workers' comp case. Under Texas labor laws, if a court rules in her favor, an employee could have her job reinstated or receive compensation for reasonable damages -- but the burden of proof lies with the employee.

Return-to-Work Programs

    Many Texas employers offer return-to-work programs for employees with work-related injuries to help them get back to work sooner. These modified duty programs accommodate an injured worker's physical restrictions that may prevent her from doing her regular job, while still allowing her to work as she continues to heal. Though return-to-work programs are not required in Texas, employers who participate in them often realize that the longer an employee is away from work, the more it costs them in workers' compensation and business-related costs.

Workers' Compensation Benefits

    If your employer cannot accommodate your physical restrictions that came about because of your work-related injury -- and you can no longer do your former job -- he can lay you off. Texas workers' compensation law does not require an employer to hold a job open for an employee with a work-related injury. As long as you cannot do your regular job, your workers' compensation benefits will continue if your employer carried the insurance -- otherwise you will need to contact an attorney. In Texas, workers' comp benefits include partial income replacement and medical benefits. If you received a permanent injury, you may be entitled to lifetime income benefits.

Nonsubscriber Employers

    It makes more sense for an employer to carry workers' compensation insurance, because without it, he does not have the protection against work-related injury lawsuits. If your employer doesn't carry workers' comp insurance, you have to hire an attorney to bring a lawsuit against your employer for a work-related injury to receive compensation for your injury or lost time from work. Texas employers without workers' comp coverage usually pay more for work-related injuries because of higher damage awards and associated court costs.

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