If you’ve been injured on the job or became ill because of conditions at work, you may be out of work while you’re recovering. Maybe you’ve already recovered—or you can work with some restrictions—but your old job is no longer available. In any case, you may be wondering if you can collect benefits under both the workers’ comp system and unemployment insurance. The answer depends on your medical condition, your availability for work, and the law in your state. Read on for details.
Workers’ comp benefits for temporary total disability (TTD) or permanent total disability (PTD) are meant to replace most of your wages when you are unable to do any work because of your on-the-job injury or illness, either while you’re recovering or on a permanent basis. Unemployment insurance pays benefits if you've lost your job through no fault of your own, but only if you're available for work and actively looking for a new job.
Because of these conflicting requirements and purposes, you're generally ineligible to collect unemployment compensation while you’re receiving workers’ comp benefits for total disability.
In most states, you may receive temporary partial disability (TPD) benefits if you are temporarily unable to return to your regular job duties but can do some light-duty work—for instance, with restrictions on lifting or prolonged standing. If your employer doesn’t offer you any work that would accommodate these restrictions, you may be able to receive payments equal to TTD benefits.
State laws vary on the question of whether you may collect unemployment benefits while you’re receiving workers’ comp for temporary partial disability. Typically, you should be eligible for unemployment as long as you’re available and looking for a job that you can do with your limitations. However, state laws have methods for limiting the money you get from this “double-dipping.” Some states reduce the workers’ comp benefits by the amount of unemployment benefits you received. Other states put a limit on the combined total so that you aren’t receiving more than you earned before your injury.
Once you’ve recovered from your work injury as much as can be expected (a stage known as maximum medical improvement in workers’ comp lingo), your doctor will decide whether the injury has left you with any lasting physical or mental limitations. If that’s true, but you’re still able to do some work, you may get a workers’ comp settlement or award for permanent partial disability (PPD). If you’re unable to return to your old job, you could be eligible for unemployment benefits while you’re looking for a new one.
Even if you’ve fully recovered without any permanent disability, your old job may no longer be available. Although it’s illegal to fire you for filing a workers’ comp claim, most states don’t require employers to give special treatment to injured workers just because they’re out on temporary disability. If you’ve been laid off for a reason other than retaliation, you should be able to collect unemployment benefits once you’re ready to go back to work and begin job hunting.
If your employer’s insurance company has denied your workers’ comp claim, you might be able to receive unemployment compensation while you challenge that decision. However, most states have provisions for reimbursing the state by deducting the amount of those unemployment payments out of any workers’ comp benefits you eventually receive that cover the same period of time.
The rules for workers’ compensation and unemployment insurance can be complicated, especially when they overlap. If you’re considering applying for both, or you’ve already done so, it would be smart to consult with a lawyer. An experienced workers’ comp attorney can explain how the laws in your state apply to your situation, whether you have a good reason to challenge a decision to deny your benefits, and how any unemployment benefits you receive might affect what will be taken out of your workers’ comp settlement or award.
To learn how much a lawyer is likely to charge, see our survey results on whether workers' comp attorneys are worth the cost.
