What to Do When Injured Employees Can’t Come Back

Even the best-managed return-to-work (RTW) programs can’t bring back every injured employee. Sometimes, due to medical complications, psychological barriers, or the nature of the injury itself, an employee simply cannot return to their original job—or to work at all.

This is one of the most challenging scenarios in workers’ comp management. It’s filled with legal, ethical, and operational landmines. Employers must balance compassion with compliance, protect themselves from liability, and support their workforce.

Here’s how to handle these complex situations while staying compliant, minimizing costs, and maintaining employee dignity.

Step 1: Know When It’s Time to Reassess

The first red flag is when an employee remains out of work well beyond the evidence-based duration for their injury. Medical guidelines from MDGuidelines or ODG can help you understand whether recovery is taking longer than expected.

If there’s a clear disconnect between expected and actual recovery time, it’s time to dig deeper:

• Has the employee reached maximum medical improvement (MMI)?

• Are there comorbid factors (obesity, diabetes, depression) affecting recovery?

• Has the treating physician indicated a permanent restriction?

At this point, the focus should shift from temporary accommodations to long-term planning.

Step 2: Engage in the ADA Interactive Process

If the treating physician confirms that the employee will never regain full ability to return to their prior role, the employer must begin the ADA interactive process.

This is a legal obligation under the Americans with Disabilities Act (ADA). It requires employers to:

• Assess whether the employee has a qualified disability

• Determine if they can perform the essential functions of their job with or without reasonable accommodation

• Explore possible alternate positions within the organization

Failing to engage in this process—or doing so too late—opens the door to costly litigation.

Step 3: Document Everything

Throughout this process, documentation is critical. Keep clear records of:

• All communications with the employee

• Medical updates from providers

• Job descriptions and essential function evaluations

• Accommodations explored and offered

• The employee’s response or level of engagement

If litigation ever arises, this documentation will serve as your best defense that you acted in good faith and followed all legal requirements.

Step 4: Consider Alternative Employment

When the original job is no longer an option, and no accommodations can make it viable, look at alternate roles. Can the employee:

• Transfer to a less physically demanding department?

• Perform sedentary or administrative work?

• Work reduced hours or modified shifts?

If no positions are available within the organization, some employers partner with third-party vendors or nonprofits to find off-site transitional duty options.

While these may not lead to long-term employment, they allow the employee to stay connected to the workforce during extended recovery.

Step 5: Know When Termination Is Legally Permissible

There are cases where, after exhausting all options, the only path forward is separation. Termination should only be considered when:

• The employee has reached MMI

• There are no accommodations or alternate positions available

• The employee cannot perform essential job functions

• All legal leave entitlements (FMLA, ADA extensions) have been exhausted

Before moving forward, employers should:

• Review all actions with legal counsel

• Ensure that termination is based on inability to work, not retaliation or disability discrimination

• Offer COBRA continuation or other required notices

This isn’t just about protecting the business—it’s about treating the injured worker fairly while respecting employment laws.

Step 6: Watch for Red Flags and Risk Factors

Some employees never return to work not because they can’t—but because they’ve disengaged. Psychosocial factors like fear of reinjury, depression, or perceived injustice can prevent otherwise capable workers from reentering the workforce.

Be proactive about:

• Offering mental health support

• Addressing concerns early through open communication

• Involving case managers or behavioral health professionals when needed

In complex cases, physician peer reviews can challenge prolonged work absences that aren’t medically justified.

Step 7: Coordinate Leave Policies Strategically

Extended absences often intersect with multiple regulations:

• Workers’ compensation leave

• ADA accommodation leave extensions

• FMLA (up to 12 weeks of protected unpaid leave)

Employers must avoid violating one law while complying with another. Work closely with HR, legal advisors, and insurance providers to ensure:

• Employees are using paid time off appropriately

• Leave extensions are documented and justified

• Indefinite leave requests are addressed legally

Final Thoughts

It’s never easy to navigate the end of a return-to-work road, especially when an employee has been with the company for years or suffers a life-changing injury. But compassion and compliance are not mutually exclusive.

By following a structured process—guided by medical insight, legal standards, and thoughtful communication—you can manage these challenging cases with integrity.

Some employees may never return to the job they had. But with the right process, they can return to work in a way that honors their recovery and protects your organization.

Michael Stack, CEO of Amaxx LLC, is an expert in workers’ compensation cost containment systems and provides education, training, and consulting to help employers reduce their workers’ compensation costs by 20% to 50%. He is co-author of the #1 selling comprehensive training guide “Your Ultimate Guide to Mastering Workers’ Comp Costs: Reduce Costs 20% to 50%.” Stack is the creator of Injury Management Results (IMR) software and founder of Amaxx Workers’ Comp Training Center. WC Mastery Training teaching injury management best practices such as return to work, communication, claims best practices, medical management, and working with vendors. IMR software simplifies the implementation of these best practices for employers and ties results to a Critical Metrics Dashboard.

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://blog.reduceyourworkerscomp.com/

Injury Management Results (IMR) Software: https://imrsoftware.com/

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.