Where The Injured
Go To Protect Their Rights

Can you lose your job while receiving workers’ compensation?

On Behalf of | Aug 9, 2026 | Workers' Compensation |

Suffering a workplace injury is stressful enough without worrying about losing your livelihood. Many employees often assume that receiving compensation shields them from termination. However, the reality under California law is more nuanced.

The legal reality

California is an at-will employment state, so an employer can fire you at any time for a legal reason. Receiving workers’ compensation does not protect you from termination. You can still be laid off or fired for reasons unrelated to your injury, such as:

  • Layoffs or company downsizing
  • Poor performance or misconduct
  • Inability to perform the duties of the job

Employers can make business decisions, but they cannot punish you for filing a claim or having an injury. California Labor Code Section 132a prohibits employers from demoting, firing or discriminating against you for exercising your workers’ compensation rights.

What happens to your benefits?

Termination does not end your workers’ compensation benefits. Since claims are tied to the injury, your medical coverage and disability payments continue as long as a physician certifies your ongoing work-related medical needs.

When termination may be illegal

While you can be laid off for legitimate business reasons, firing you in retaliation for a workplace injury is illegal. Understanding your rights is the first step toward securing your future and gaining peace of mind. If you suspect wrongful termination, reaching out to an experienced workers’ compensation attorney can help you determine whether your termination was retaliatory and what remedies may be available.