Workers’ Compensation and Getting a New Job: What Happens to Your Benefits?

Posted in Workers' Compensation on June 6, 2022

Key Takeaways

Arizona workers’ compensation covers medical bills and about two-thirds lost wages.
Medical benefits continue after changing jobs until the claim is closed.
Equal or higher pay usually stops wage replacement benefits.
Lower pay may allow benefits covering two-thirds wage difference.
Workers must report new employment or risk insurance fraud.

When you sustain an on-the-job injury in Arizona, you are typically entitled to workers’ compensation benefits. This system is designed to provide a safety net, covering 100% of your related medical bills and roughly two-thirds of your lost wages.

However, life doesn’t stop because of an injury. Whether due to a career move or a need for a fresh start, many workers wonder: What happens to my workers’ compensation when getting a new job? In Arizona, the answer depends heavily on the type of benefit you are receiving and your new rate of pay.

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Understanding Your Arizona Workers’ Comp Benefits

Before assessing how a new job affects your claim, it is important to categorize the two primary types of benefits provided by the Industrial Commission of Arizona (ICA):

Medical Benefits: These cover everything from emergency room visits and surgeries to ongoing physical therapy and prescriptions.
Indemnity (Wage Replacement) Benefits: If you cannot work, or can only work limited hours, you receive a portion of your average weekly wage (usually 66.6%).

Will I Lose Medical Benefits if I Change Employers?

A common fear is that leaving your current employer will terminate your medical coverage. In Arizona, this is not the case.

The insurance carrier that was “on the risk” at the exact moment of your injury remains responsible for your medical care until the claim is legally closed. This means you can start a new job and still have your original workers’ comp carrier pay for your specialist appointments and rehabilitation. Changing your place of employment does not break the “chain of causation” for your medical needs.

How a New Job Impacts Your Weekly Wage Checks

The rules change significantly when it comes to your indemnity checks. Workers’ compensation and getting a new job intersect most directly at your paycheck:

New Job at Equal or Higher Pay: If your new position pays the same or more than your pre-injury wage, your “Temporary Total Disability” (TTD) or “Temporary Partial Disability” (TPD) benefits will likely stop. Since you no longer have a “loss of earning capacity,” the carrier is no longer required to supplement your income.
New Job at Lower Pay: If your injury forces you to take a “light-duty” or lower-paying role at a new company, you may still be eligible for TPD benefits. In Arizona, this typically covers two-thirds of the difference between your old wage and your new, lower wage.
The Duty to Report: You are legally required to report any new employment and earnings to the insurance carrier. Failing to disclose that you have started a new job while still cashing workers’ comp checks can be flagged as insurance fraud.

The Risks: Medical Restrictions and “Voluntary Withdrawal”

While you are allowed to seek new employment, you must ensure the new role fits within the medical restrictions set by your treating physician.

If you accept a job that requires physical labor exceeding your doctor’s orders, the insurance carrier may argue that your injury is no longer their responsibility or that you have aggravated the condition through your own actions. Furthermore, if you quit your job voluntarily while the original employer could have accommodated your light-duty restrictions, the carrier may attempt to cut off your wage benefits entirely.

Why You Need a Phoenix Workers’ Compensation Attorney

Navigating the transition between workers’ compensation and getting a new job is a procedural minefield. Insurance carriers often use a change in employment as an excuse to prematurely close a claim or deny further benefits.

An experienced attorney will:

Help you accurately report new income to the ICA to avoid fraud allegations.
Ensure your medical benefits remain open while you transition to a new career.
Calculate the exact “loss of earning capacity” to ensure you receive the maximum supplemental pay if your new job pays less.

Need help with a claim? Contact us at 602-782-5033 to speak with a Phoenix workers’ compensation lawyer. Our firm provides dedicated legal representation in Chandler, Mesa, Flagstaff, and Tucson, ensuring you receive the benefits you are rightfully owed.

Avery N Crossman

Ms. Crossman is a State Bar Board Certified Workers’ Compensation Specialist and is past Co-Chair of the State Bar Workers’ Compensation Section. She has served as a faculty member at the State Bar Seminar on Professionalism and is a former Judge Pro Tempore in the Arizona County, Justice, and Superior Courts. In the past, she has spoken at seminars on Workers’ Compensation sponsored by the Industrial Commission of Arizona and the Arizona Association of Lawyers for Injured Workers. Ms.Crossman is a long-time member of the Arizona Association of Lawyers for Injured Workers. She is also a member of American Mensa.