Lay-Offs, Work Injuries & Your Workers’ Comp Benefits: Continuing Coverage After Your Job Ends

Lay-offs and downsizing are making headlines again in California. For many workers, job loss can come at the same time they are recovering from a work injury or waiting on workers’ compensation benefits. When your employment ends, you might wonder whether your benefits end too.

The good news is that, in most cases, workers’ compensation benefits continue even after employment ends. California law protects injured employees regardless of layoffs or company closures. At the Law Offices of Armen Yedalyan, APLC, we help injured workers understand their rights and ensure they continue receiving the benefits they earned.

Understanding Workers’ Compensation Coverage After Employment Ends

Workers’ compensation is not dependent on your current employment status once your injury is accepted and linked to your job. The benefits are provided by your employer’s insurance carrier, not by your ongoing wages.

That means if you were injured while working for an employer, your benefits can continue even if:

• You were laid off as part of a workforce reduction
• Your company closed or changed ownership
• You were terminated while still under medical treatment
  

Once a claim is accepted, the insurance company must continue providing medical care and disability benefits until you reach maximum medical improvement (MMI) or your case is settled.

Types of Benefits That Can Continue After a Lay-Off

Even after your employment ends, you may still qualify for:

• Medical Treatment
  
  Your right to receive medical care for a job-related injury continues. The insurance company must pay for necessary treatment that relates to the accepted injury.
  
• Temporary Disability Benefits
  
  If you cannot work while recovering, you can still receive temporary disability (TD) benefits. These payments replace part of your lost income while you heal, usually up to two years.
  
• Permanent Disability Benefits
  
  If your injury leaves lasting limitations, you may qualify for permanent disability (PD) payments. These continue regardless of your employment status.
  
• Supplemental Job Displacement Voucher (SJDB)
  
  If you cannot return to your old job and your employer cannot offer modified work, you may qualify for a voucher worth up to $6,000 to help pay for retraining or education.
  
• Death Benefits (for dependents)
  
  In fatal injury cases, eligible dependents can still receive benefits even if the worker was no longer employed when benefits are paid.

What Changes After a Lay-Off

While benefits continue, certain aspects of your claim can become more complicated after termination:

• Communication Delays
  
  It can be harder to coordinate medical care or wage documentation once you no longer have HR support.
  
• Return-to-Work Options
  
  Your employer is no longer required to hold your job. If you recover, you may need to look for new employment rather than returning to your previous position.
  
• Settlement Timing
  
  Some insurance carriers may try to close cases more quickly after employment ends. Having an attorney ensures settlement discussions are fair and fully consider future medical needs.
  
• Potential Retaliation or Wrongful Termination Issues
  
  If you believe your lay-off was connected to your workers’ compensation claim, you may have additional rights under Labor Code §132a, which prohibits retaliation against injured workers.

Common Questions About Workers’ Comp After Job Loss

Can my employer cancel my benefits when I am laid off?

No. Once your claim is accepted, the insurance carrier — not your employer — is responsible for paying benefits. Lay-offs do not stop approved medical or disability payments.

What if my claim was still pending when I was terminated?

You can still pursue the claim. If you reported the injury before termination or have medical evidence linking the injury to your work, you may still qualify.

What happens if my employer goes out of business?

Workers’ comp insurance coverage continues even if the company closes. If the employer was uninsured, the Uninsured Employers Benefits Trust Fund (UEBTF) may pay your benefits.

Can I settle my case after being laid off?

Yes. Many settlements occur after a job ends. Your attorney can negotiate directly with the insurance carrier for a lump-sum settlement or structured payments.

Do I need a lawyer if I have already been approved for benefits?

An attorney can help make sure benefits continue smoothly, confirm payments are correct, and address any delays or disputes. Legal guidance is especially helpful when employment status changes.

How the Law Offices of Armen Yedalyan, APLC Helps

At the Law Offices of Armen Yedalyan, APLC, we represent injured workers at every stage of the claim process — including after a lay-off or termination. We:

• Review whether your benefits are continuing correctly
• Communicate with the insurance carrier to resolve delays or disputes
• Handle medical authorization issues and doctor changes
• Ensure you receive all wage-replacement and permanent disability payment
• Evaluate whether retaliation or discrimination may have occurred
  

Our goal is to protect your right to medical care and fair compensation until your case is resolved.

Stay Protected After Job Loss

Losing a job is stressful. Losing it while recovering from an injury can feel overwhelming. The law is clear that your workers’ compensation benefits do not end just because your employment does.

If you were injured at work and have recently been laid off, or if your employer has stopped responding to your questions about benefits, reach out for help. Contact the Law Offices of Armen Yedalyan, APLC today for a free consultation. We will review your claim, explain what benefits should continue, and make sure your rights are protected.